Sovereign funds to reach $10 tln by 2015 -IFSL

LONDON, March 31 (Reuters) - Sovereign wealth funds, which rose 18 percent to $3.3 trillion last year, will reach $10 trillion in 2015, thanks to rising oil prices and Asian countries' growing trade surpluses, a think-tank said on Monday.

Including other sovereign investments, such as pension reserve funds or funds owned by state-owned corporations, and other official foreign exchange reserves, sovereign funds in a broader sense hit $14.7 trillion in 2007, International Financial Services London (IFSL) said in a report.

The report comes as bankers, regulators and sovereign funds meet in London on Monday to discuss steps the funds should take to boost confidence and trust in recipient countries.

IFSL said London was an important clearing house and location for managing funds, and some wealth funds had already set up representative offices there.

As the rising class of state-controlled investment funds in the Middle East and Asia bails out western financial institutions, politicians and business leaders in the United States and Europe have proposed laws to make it harder for these funds to take over flagship companies.

Since the start of the credit crisis, sovereign funds, mostly from Asia, have invested more than $60 billion in U.S. and Swiss banks, IFSL said.

The United Kingdom, however, has welcomed sovereign funds to London and rejected calls to regulate them more closely.

"The UK's open and competitive market for international investment puts London in pole position to capture a growing share of this market over the coming years," said Marko Maslakovic, senior economist at IFSL.

GUIDELINES

The City of London think-tank said non-commodity sovereign funds doubled their total assets from three years ago to $1.2 trillion last year. They may see their share of global sovereign funds increase to 40 percent by 2010 and 50 percent by 2015, up from 36 percent in 2007, IFSL said.

Monday's conference is arranged by the city of London and the Organisation for Economic Co-operation and Development (OECD), the club of 30 mostly industrialised economies. The OECD had been asked by the G7 industrialised powers to suggest what policy should be adopted towards these funds.

The International Monetary Fund plans to develop best practice guidelines for sovereign wealth funds and will meet funds in April to being work on an initial draft.

Sovereign wealth funds now have assets between $1.9 trillion and $2.9 trillion and this could grow to $15 trillion in the next eight years, according to U.S. Treasury estimates. The IMF estimates that sovereign wealth funds could reach $6 trillion to $10 trillion by 2013. (Reporting by Daisy Ku; Editing by Quentin Webb)