Who do sovereign wealth funds say they are? Using structural topic modeling to delineate variegated capitalism in their official reports

Abstract

Sovereign Wealth Funds (SWFs) are an emerging community of investment organizations, subject to the conflicting demands of international and domestic institutions. From the lens of variegated capitalism, one can explain their diversity and apparent contradictions by underlining how they embody negotiations between global and local institutional pressures. Many SWFs now publish official reports, which represents a unique opportunity to analyze how they portray these institutional influences. We use an unsupervised machine learning method, structural topic modeling, to analyze the 2015 official reports of 40 SWFs and 17 public pension funds globally. With this novel method, we propose the first international, community-wide study that shows how capitalism is adapted across regions, political systems, and even organizational frontiers through SWFs. We show that region and political systems are factors supporting a polarization of missions between neoliberal and state capitalist view. However, this is nuanced by international clubs that support new investment strategies, and some high-profile SWFs that mix the neoliberal and state capitalist views.