Europe Wary of Russia’s Sovereign Wealth Funds
The lack of investment reciprocity between Europe and Russia, especially in energy assets, is beginning to raise some concerns among officials – especially considering that the president-to-be recently called upon the business sector to go on aggressive spending sprees abroad. Now all eyes are on Russia’s modest brand new sovereign wealth fund, fueled by $32 billion in oil and gas profits. This amount represents a split from the massive $150 billion stabilization fund, which was mostly a rainy day fund specialized in investing in foreign debt. Control over these funds has been a great source of internal tension within the Kremlin, culminating last year with the arrest of Deputy Finance Minister Sergei Storchak, who along with Alexei Kudrin formerly held the keys to the most powerful instrument of political leverage outside of Gazprom. No one seems to be certain whether the creation of this new sovereign wealth fund is a direct product of the spy wars, but there certainly are some outstanding questions to address.