World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data
How The Crown Estate Could Become Britain’s First Sovereign Wealth Fund
Brian Sturgess & Keith Boyfield
World Economics, December 2013

The United Kingdom is one of a few larger economies without a national wealth fund. This paper investigates the feasibility of a recent proposal to turn The Crown Estate, one of Britain’s largest property investment and management businesses, into such a Sovereign wealth fund as an alternative to its privatisation. The Crown Estate was created in 1760 by Parliament as a means of funding the British monarchy, but when the current Queen dies or abdicates there is likely to be a wide ranging debate about the type of monarchy Britain wants and how it is financed. However, with assets of just under US$12 billion The Crown Estate would be small in relation to other national funds. At present, with an estimated six trillion dollars, the global funds under Sovereign wealth management have been steadily increasing their significance in global investment. The largest single fund is the Norwegian Government Pension Fund with assets of circa US$803.9 billion, while greater China controls US$1.63 trillion through four separate funds. The authors argue that any British fund, even if formed out of The Crown Estate, should have access to the revenues from shale oil and gas which could be worth as much as £500 to £800 of GDP per head at 2012 prices.


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