Part of the astounding cash flood we can see in the market today is the staggering amount of sovereign wealth that is available, about $4.7 trillion in assets in the top ten nations for sovereign wealth. These countries include some you'd expect, like China (with over $1 trillion alone) and Saudi Arabia, but others that are surprising, like Norway. We estimate that 5% of these sovereign funds will go into tech investments, which means that $250 million is effectively up for grabs.
I'm based in Stockholm, so I've had personal experience with the power of the Nordic funds, and I can tell you that they are very active investments, with a fairly straightforward investment profile. Almost half of the investments made by the Norwegian sovereign fund, the second biggest in the world, have gone into tech companies.
The cash flood is something to watch as companies try to juggle their money back into US holdings or start to look at overseas companies to acquire. But let's not forget this other massive cash pool that is also looking to acquire, and that has tech as one of their primary buying targets.
Posted by MarkJohnson, Director on 21 November 2011