We document that announcement-period abnormal returns of sovereign wealth fund (SWF) equity investments in publicly traded firms are positive but lower than those of comparable private investments. Further, SWF investment targets suffer from declining return on assets and sales growth over the following three years. Our results are robust to controls for target and deal characteristics and are not driven by SWF target selection criteria. Larger discounts are associated with SWFs taking seats on boards of directors and with SWFs under strict government control acquiring greater stakes, supporting the hypothesis that political influence negatively affects firm value and performance. (JEL G32, G15, G38)We thank Geert Bekaert (the editor) and two anonymous referees for their valuable feedback. We thank Kate Holland, Laura Pellizzola, Valentina Milella, Armando Rungi, Giacomo Loss, and Timothée Waxin for research assistance with this project. We also benefitted from comments offered by

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We document that announcement-period abnormal returns of sovereign wealth fund (SWF) equity investments in publicly traded firms are positive but lower than those of comparable private investments. Further, SWF investment targets suffer from declining return on assets and sales growth over the following three years. Our results are robust to controls for target and deal characteristics and are not driven by SWF target selection criteria. Larger discounts are associated with SWFs taking seats on boards of directors and with SWFs under strict government control acquiring greater stakes, supporting the hypothesis that political influence negatively affects firm value and performance. (JEL G32, G15, G38) We thank Geert Bekaert (the editor) and two anonymous referees for their valuable feedback. We thank Kate Holland, Laura Pellizzola, Valentina Milella, Armando Rungi, Giacomo Loss, and Timothée Waxin for research assistance with this project. We also benefitted from comments offered by