Abstract: Because of high oil prices and global macroeconomic imbalances in trade, some nations have developed sovereign wealth funds (SWFs) to invest excess foreign currency reserves in global financial markets. The aggregate value of SWFs is estimated at $2.5trillion, which is more than twice the value of global private equity funds. The value of SWFs could grow to $12trillion by 2015 because of continued inflows of foreign currency reserves. Because of the lack of transparency among SWFs, regulators in major financial markets are increasingly concerned the funds will be managed to achieve political rather than financial objectives. The trend in SWF investing is towards towards the purchase of large majority stakes in major global firms, which may be a prelude to leveraged buyouts of the firms. By 2015, the value of SWFs would surpass the value of the 20 largest global firms, increasing the possibility that SWFs could be a disruptive force in financial markets.