What is a strategic investment fund?
The Strategic Investment Fund is a portfolio worth a specific amount used for a particular purpose. Assets in the Strategic Investment Fund could be increased on financial markets from securities, such as stocks and bonds, as well as real estate assets. Sometimes the fund partners can contribute to cash or even lend money to earn money to achieve a strategic goal. Individual states, countries or businesses can develop investment funds for one or more initiatives. While the portfolio can grow to a certain size of profits from the financial markets and otherwise, the fund sponsor can limit the size of individual allocations made by this fund. For example, if the purpose of the Strategic Investment Fund is to invest in energy development, the fund sponsor could place the ceiling on the amount of money that can be devoted to one individual project.
Individual countries can develop strategic investment funds to improve conditions or supportOry regional enterprises. For example, assets in the strategic fund could be increased to finance infrastructure development. The direction of money in such an investment portfolio depends on the main strategies listed in the documents on the origin of the fund.
Another way that the country could use the Strategic Investment Fund is a defensive way. If the economy slows down and the production fits in a certain industry, the country's leaders could worry about the threats of foreign investors who have entered the predatory intentions to gain large shares in companies. Sources in the Strategic Investment Fund can be used actively by investing in industry suffering, thereby avoiding the intervention of unwanted investors who might be interested in controlling foreign assets.
There are different reasons why corporations could form a strategic investment fund. This type of portfolio could be used to maintain business on top of new andnew technologies or systems used in the industry. For example, the company could allocate money that will eventually be used to invest in novice companies for some new systems that are likely to affect, shape or change the industry in the future. By creating an investment fund for strategic financing the activities of these businesses, the corporations will stand to stay from the competition and also share any profits of beginning companies.