Sovereign Stealth Funds

Sovereign wealth funds have operated quietly in the shadows for many years.  But all of a sudden, they have been thrust into the limelight – subjecting them to a force with which many have not yet had to contend: the media.

The website Breaking Views recently published a list of sovereign wealth funds ranked on the basis of “the potential risk they present to western interests”.  The criteria: transparency, control of strategic sectors, and “political threat”.

Apparently, many of these funds remain quite secretive.  In fact, some don’t even disclose their size.  So you’d be excused for wondering how these funds actually conduct investment research and make allocations. has learned from a reliable source that this secrecy extends well beyond fund statistics.  Representatives from one of the twenty funds listed by Breaking Views have apparently attended investment conferences using made-up company names.

Those of you who have visited DisneyWorld in Florida may recall that this strategy was famously deployed by Walt Disney himself.  As Disney bought up Florida swampland, it was felt the final few sellers were bound to hold the company hostage by jacking up their prices.  So Disney used a bunch of “dummy corporations” so no one would catch a whiff of what was transpiring.  One, for example, was called “RETLAW”, which was simply Walt’s name spelled backwards.  (Today, the names of those companies hang in the second floor windows on Main Street in the Magic Kingdom).

So next time you meet some shifty character from a no-name hedge fund at some conference, think twice before you walk away (or at the very least, try reversing the letters in the company name).

Be Sociable, Share!

One Comment

  1. Simon
    February 4, 2008 at 12:11 am

    This form of funds always exists in the west.
    Many sovereign wealth funds are not mentionned in this paper. We can sort a list of Western sovereign wealth funds that are ligated and tied with their own goverment. Such fund as lacaisse runs 240BN tied with political obligations.
    They even control London Heartrow airport.

    One Big sovereign fund to mention is the French state owned Caisse des Dépôts that have strategic investement in EADS.

Leave A Reply

← January 29, 2008: The day the tide turned for hedge funds? Hedge Fund Due Diligence: A Source of Alpha in a Hedge Fund Portfolio Strategy →