LegalLingo: What Is A Sovereign Wealth Fund?

Being an aspiring commercial lawyer often means being confronted by complex, often abstract, concepts. This can result in a wall of jargon, which students and trainees often find difficult to understand. We've therefore introduced LegalLingo to break down these concepts into bite-size explanations to make the industry more accessible for aspiring trainees.

Second up in the series is an explanation of what a sovereign wealth fund is:

A sovereign wealth fund is a state-owned investment vehicle run and managed by a government agency. A nation typically establishes a sovereign wealth fund when there are budget or trade surpluses on its balance of payments. The surplus capital can then be pooled into a state-owned fund which the government uses to make investments for the benefit of its citizens and their economy.