(1) What Is New
The UK is planning to launch its very own sovereign wealth fund as part of the new government’s investment plans. The UK’s chancellor of the exchequer, Ms. Rachel Reeves, announced on 8 July 2024 that such wealth fund will be launched to invest in “new and growing industries” and “catalyse private sector investment” in such industries.
Ms. Reeves explained that a task force led by Mr. Mark Carnet, the former governor of Bank of England, has created a report on the establishment of the fund. She also stated that she will announce the upcoming steps very soon.
(2) Changes in the Political Landscape
Earlier this month, the Labour Party had entered the government following its landslide victory at the general elections. The Labour is known to be supportive of such fund since they called the fund last year when asking for the asset management industry’s input into its election manifesto. The party’s manifesto which called for the creation of such fund had said its capital will be in the amount of £7.3b (€8.6bn).
(3) Global Overview
Currently there are over 90 sovereign wealth funds throughout the world. These funds collectively manage over $8 trillion (€7.4 trillion) in assets, according to the International Forum of Sovereign Wealth Funds. It is believed that the UK’s own sovereign wealth fund will “significantly contribute to the country’s much-needed financing capabilities for large-scale projects”.
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