The annual report released on Saturday showed that the world's sovereign wealth and public pension funds held record $31.9 trillion in 2021 due to rising US stock and oil prices, and investments rose to their highest for several years.
The report on state owned investment vehicles by industry specialist Global SWF found that the assets managed by sovereign wealth funds increased by 6% over the year to $10.5 trillion, while those of public pension funds increased by 9% to $21.4 trillion.
State-owned investors had spent more money in both the number of deals and volume than in any of the previous six years, according to the report. More than half of the money was spent by sovereign wealth funds, and about $215.6 billion was spent.
Singapore's GIC sovereign wealth fund topped the league, increasing it's dealmaking by 75% to $31.1 billion, spread across 109 deals. Over a third of that capital was invested in real estate, especially logistics.
In a report by Global SWF, Diego Lopez said that emerging markets fell behind, attracting only 23% of the capital this year, one of the lowest figures in the last six years.
Venture capital investments are only a small portion of the funds allocated by state-owned vehicles, but this year grew by more than 80% to $18.2 billion, with Singapore's Temasek accounting for more than a quarter.
The pandemic caused a shift towards sectors that are poised to soar amid the change in lifestyles, consumer behaviour and public needs, according to Lopez, pointing out healthcare, retail, consumer and technology sectors.
The report said investors would continue to watch China closely, especially the crackdown on Chinese technology firms.
Most state-owned investors are bullish on Chinese stocks, despite the geopolitical tensions and regulatory concerns.
The launch of four new sovereign wealth funds this year lifted assets, which was a positive for overall assets.
Azerbaijan Investment Holdings AIH was the most significant in terms of assets, having received stakes in leading businesses including the national oil company SOCAR.
The funds were launched by Bangladesh, Cape Verde and Rio de Janeiro and Israel, Namibia, Bahamas and Mozambique are scheduled to launch SWFs in 2022.
The annual report by Global SWF looked at data from 161 sovereign wealth funds and 275 public pension funds.