Sovereign funds have invested $25.5 billion so far this year to buy stakes in global companies such as Citigroup and Merrill Lynch, up 66 per cent from a year earlier, Reuters data showed on Thursday.

Sovereign funds such as Singapore’s Temasek Holdings and the Abu Dhabi Investment Authority have become more influential in financial markets after investing in Wall Street and European banks hit by losses from risky US mortgages.

These state-backed funds took part in 22 deals, of which 10 deals worth $9.1 billion involved Singapore’s two sovereign funds, Temasek and the Government of Singapore Investment Corp, according to data up to August 28.

The bulk of activity was in the US, where sovereign funds pumped in $15.8 billion in eight transactions, 62 per cent of their global total and almost five times more than 2007’s figure of $3.45 billion. Ranking second was Russia, where Dubai World may invest $5.3 billion in regional power firm OGK-1.

Sovereign funds, which are estimated to hold assets worth as much as $3 trillion, have ballooned in recent years as large Asian exporting countries and oil-rich nations started putting part of their currency reserves into investment vehicles.

$15.8 billionThe amount invested in the United States by sovereign funds

$5.3 billionThe amount invested in the Russian Federation by sovereign funds

$1.3 billionThe amount invested in Singapore by sovereign funds