Although not in the news as much as before, sovereign wealth funds have “retained their collective significance in the world of institutional investors,” according to a new report from Preqin, a data provider.

State-controlled funds now boast US$3.59trn in assets under management, up 11% from the previous year. This is encouraging for hedge fund and private equity managers, as sovereign funds’ general lack of liabilities gives them more leeway to invest in “riskier, less liquid and alternative investments,” Preqin notes. As the risk appetite of other investors wanes, this presents a potentially vital source of funds to an alternative-investment industry that’s feeling the squeeze.