Major emerging markets around the world, are no longer content with the meager returns to be held on safe but low yielding investments. Many are increasingly more willing to invest in higher yielding alternative investments like equities, structured products and real estate. Enhanced returns from the sovereign assets have become a key avenue to address some of the structural and demographic needs of countries such as China that may face inverted population pyramids in the not too distant future.

Since the Asian financial crises where many governments were struggling to keep sufficient foreign exchange reserves, the situation is reversed now in many countries especially China and the oil producing nations of the Middle East. Reserves holdings are far in excess of the level needed for imports or for stabilising currencies.

Such secular changes in the ways reserve funds are managed from a passive benchmark portfolios to higher yielding assets have resulted in a paradigm shift in the way public funds are managed. Even for insurance funds, the investment desks are employing a more aggressive and active investment strategies with allocations into alternative assets. In Asia, Asian corporates have accumulated huge holdings of cash. FinanceAsia estimates in a research report that the asset pool of Asian institutions have grown to USD7.5 trillion in 2007.

This year, the Inaugural Sovereign Reserve Management, Pension & Institutional Funds Congress 2007 will be held in Doha, Qatar.