The sovereigns are coming

Sovereign wealth funds – threat or menace? Or neither? More than $2 trillion has been entrusted to government investment funds with global ambitions. Growth projections are high, as are fears in target countries that some of these heavy-hitters are up to no good.

It was a hot topic at the latest G7 conference. Even countries with a firm commitment to open capital markets are wondering just how open they should be to investments from possibly hostile foreign governments.

It's hard to draft a single set of rules for SWFs, since they vary enormously. Below, we have complied a list of the top players. We look at their size, independence, transparency, notable investments and how much fear they inspire in the West.

The estimated size and the ratio of the funds' assets to the home-country GDP are based on figures from Standard Chartered Bank. A low ratio is often a sign that the country could absorb the money relatively easily if it chose. A high ratio suggests the funds could be used more easily as a financial weapon.

Abu Dhabi Investment Authority (ADIA)
Estimated $650 billion-$1 trillion, 521 per cent of GDP

The largest of the SWFs is intimately tied with oil and with the emirate's power structure – 100 per cent government-owned and chaired by Sheikh Khalifa, the emirate's ruler.

Until recently, ADIA has stayed away from investing in the Middle East, and from the public eye – keeping its holdings below 4.5 per cent in order to avoid disclosure. It is now taking a more aggressive stance, including the purchase of a stake in US private equity group Apollo and a C$5 billion takeover of Canada's Prime West Energy Trust.

Fear factor: High. ADIA's size, proximity to an autocratic Arab government and secrecy - in its 30 year history it has never disclosed the value of the fund – make it a controversial investor.

Government Pension Fund Global (Norway)
Reported $322 billion, 93 per cent of GDP

Norway has approached its petro-wealth in the most Western way. It's squirreled away much of the revenues for future pension payments, and its government-owned fund offers the highest level of disclosure. Over a third of the assets are run by external fund managers.

The investments are uncontroversial – roughly 40 per cent in bonds and 60 per cent in equities, with the majority of its stakes below 1 per cent. In total, its holdings account for 0.7 per cent of Europe's equity markets.

Fear factor: Almost none. Norway is seen as the gold standard of SWFs, providing an annual list of all its holdings. It is a welcome investor almost anywhere.

Government of Singapore Investment Corporation (GIC)
Estimated $100-$330 billion, 169 per cent of GDP

The largest of Singapore's funds is also the largest SWF that doesn't get its money from oil and gas exports. Singapore's high savings rate has given the country money to spare.

GIC is largely focused on property. In the past six months, it has made over $4 billion of real estate investments around the world, including almost $1 billion for Chapterhouse Holdings, which owns the Merrill Lynch Financial Centre in London.

Fear factor: Low to Medium. GIC is open about its structure but does not publish detailed financial reports. It's also close to the government, but outside of Asia, Singapore is seen as a friendly trading partner, not a power-broker.

Kuwait Investment Authority (KIA)
Estimated $213 billion, 265 per cent of GDP

Kuwait's large oil-backed SWF has little independence from the state – its board includes the oil minister as well as representatives from the central bank and the finance ministry.

KIA's key holdings include a 7 per cent stake in German car-maker Daimler and 8 per cent stake in engineering group GEA.

Fear factor: High. Domestic law prevents it from revealing detailed information. Its close ties to the government make it look like a political arm of the Arab state.

China Investment Corporation (CIC)
Expected to have $200-400 billion, 8 per cent of GDP

Launched in September, this is a new funnel for China's vast foreign exchange reserves. Once up and running, it is expected to be partly run by foreign portfolio investors.

CIC is expected to double its size by merging with the investment group that controls three of China's big four state banks. It already owns 10 per cent of Blackstone's shares and a small stake in BG Group.

Fear factor: High. External management of part of this potentially huge and secretive fund won't reassure US authorities, who already distrust China's intentions.

Stabilization Fund Russia (SFR)
Reported $128 billion, 14 per cent of GDP

Russia's oil-backed fund is controlled by the Ministry of Finance and has a strict investment policy. In its current form, it focuses investments in debt securities from the US and selected European countries. A more aggressive policy is likely after a reorganisation next year.

Fear factor: High. Russia's fund in its current form is not overtly threatening. Yet its interest in foreign equities – notably EADS, a military contractor, and Centrica, a UK utility –has helped move the EU to contemplate how it could regulate SWFs.

Temasek Holdings (Singapore)
Reported $108 billion, 85 per cent of GDP

This is Singapore's second-largest SWF. The government-backed group is theoretically independent of the state, but its chief executive Ho Ching is the prime minister's wife.

Temasek has a higher and more active international profile than GIC, its larger compatriot. Notable purchases include a 2 per cent holding in Barclays and a 17 per cent stake in Standard Chartered Bank.

Fear factor: Medium. Temasek is assertive, but publishes its key financials in an annual review. Despite a questionable independence, its holdings in financial institutions around the world are not viewed as a threat.

Qatar Investment Authority (QIA)
Estimated $50-$70 billion, 185 per cent of GDP

The QIA is funded by the emirate's huge gas reserves. Its chairman is prime minister Sheik Al Thani.

The QIA may be secretive, but it isn't low profile. A controversial $20 billion bid for UK retailer Sainsbury through one of its subsidiaries is still playing out. It also recently bought 20 per cent of the London Stock Exchange, and 10 per cent of Nordic operator OMX.

Fear factor: High. QIA's secrecy, state ties and pursuit of high-profile assets at astronomical values make it impossible to view as a purely financial investment vehicle.

Permanent Reserve Fund (Alaska)
Reported $40 billion, 0.3 per cent of GDP

The Alaskan oil fund is largely run by external managers and issues annual public reports detailing its size and holdings.

It is run like any US pension fund, with investments in a diversified portfolio of blue-chip equities.

Fear factor: Low. Like its larger Norwegian peer, Alaska's fund is welcome wherever it goes.

Brunei Investment Agency
Reported $30 billion, 309 per cent of GDP

The BIA is part of Brunei's Ministry of Finance and manages the country's foreign exchange reserves. The group is thought to be worth a third what it once was after alleged mismanagement in the 1990s. The group is slowly trying to rebuild itself.

Fear factor: Medium. If the fund can get itself back on track it would have to battle its poor transparency record before being welcomed in Western markets.

Others SWFs worth noting

Isithmar (Dubai)
Estimated $8 billion, 7 per cent of GDP

Dubai's largest SWF is backed by ruler Sheikh Mohammed and is not shy of the world stage. Its stated financial aims include supporting Dubai's ambitions to become a global business hub.

Fear factor: High. Istithmar does list its investments, yet does not provide financial reports. Its secretive nature and openly stated aim to support the state cause concern.

Dubai International Capital (UAE)
Estimated $6 billion, 4 per cent of GDP

DIC is a private investment vehicle run by the Emirate's ruler on behalf of the ruling family. The fund invests predominantly in private equity investments, including the Tussauds Group and stakes in DaimlerChrysler, HSBC and Indian bank ICICI.

Fear factor: Medium-High. There is limited public information about this fund. As an arm of the Emir himself, the fund is likely to be seen as representing Dubai's ambitions.