Sovereign funds pivot to private assets as dollar fears rise

Sovereign wealth funds and central banks managing $29 trillion are turning toward energy assets as official investors hedge more aggressively against dollar exposure and geopolitical shock. A new Invesco survey found 61% of central banks said U.S. debt levels were hurting the dollar’s long-term reserve-currency role, up from 20% in 2024, while 29% expected the dollar to be weaker in five years, more than double the 12% share in 2022.

The shift was not confined to one corner of the market. One-third of respondents planned to raise gold holdings, and many were reassessing reliance on U.S.-based custodians, counterparties and clearing infrastructure. One European central bank had already replaced its U.S. custodian, while a Latin American central bank was building non-U.S. custodial relationships as a contingency. One respondent warned that moving away from U.S. infrastructure could be interpreted as hostile in Washington, a reminder that custody, clearing and settlement have become part of the broader contest over financial power.

Energy security and energy-transition infrastructure emerged as the most credible resilience investments, named by 80% of respondents. Infrastructure reached 9% of sovereign wealth fund assets in 2026, underscoring how sovereign capital is being pushed toward hard assets that can better absorb inflation pressure, sanctions risk and supply disruption. That tilt is appearing alongside a wider move into private markets, as sovereign funds seek exposure to the artificial-intelligence buildout through less liquid assets rather than traditional public equities.

The scale of the reallocation matters because Invesco’s sovereign asset-management study has been running for 13 years and has become a steady read on official capital. Its 2025 edition surveyed 141 senior investment professionals from 83 sovereign wealth funds and 58 central banks managing about $27 trillion, showing how large the pool of state money already is before the latest $29 trillion estimate. The latest findings suggest that the recalibration is no longer a tactical trim around the edges. It is a broader shift toward energy, infrastructure, gold and private assets at a time when confidence in U.S. debt and the dollar’s central role is deteriorating.