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The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

What do an Italian bank and a poultry farm in Madagascar have in common? Very little in practice, of course. Both, however, share a common minority shareholder: Libya.

As the unrest in Libya intensifies and governments step up the pressure on Colonel Muammar Qadhafi, the toughest actions taken against Libya’s ruling regime so far have been financial. Amid signs that cash is running short in Tripoli, attention has turned to the government’s foreign holdings, and the extent to which it can repatriate these funds for much-needed liquidity.

Read more at Financial Services Briefing: “Trimming Tripoli’s tentacles” (March 11th)

Assets under management at the world’s sovereign wealth funds are now nearly US$4trn, according to new research. The latest tally, released by Preqin, is up by 11% over 2010, which itself grew 11% over the year before.

Recent growth has come thanks to rising commodity prices and despite some significant withdrawals by host governments. Russia, for example, bolstered its fiscal position by tapping its sovereign fund for around US$35bn over the past 12 months. Despite the promise of an influx of petrodollars, the outlook for a host of funds in the Middle East and North Africa is cloudy, as the stewardship of funds faces potential changes in states experiencing unrest like Libya, Bahrain and Algeria.

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

Reeling from the financial crisis and facing potential funding shortfalls, western banks turned to sovereign wealth funds (SWFs) for support during the credit crunch. In 2007 and 2008, these funds, mainly from Asia and the Middle East, pumped some US$70bn into the ailing institutions.

SEND HELP: Spain's prime minister meets China's vice premier on January 5th 2011

On state visits around Europe this month, Li Keqiang, China’s deputy prime minister, made headlines by suggesting that China stood ready to support the debt of the euro area’s troubled peripheral members. This, along with other sovereign investors’ recent history of dabbling in distressed assets, suggests that SWFs may play a role in alleviating the euro area’s current woes.

With more than US$4trn in assets, according to the SWF Institute, the funds’ collective might would be more than sufficient to cover the existing support facilities for Greece and the joint EU-IMF facility for other euro area economies in need (already tapped by Ireland). But how realistic is this?

Read more at Financial Services Briefing: “Sovereign crisis, sovereign solution” (January 12th)

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.

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