Today, many sovereign wealth funds are active investors in property, both directly and indirectly. Although SWFs still face barriers to entry, particularly in the United States, their importance as a source of capital is continuing to grow.

When the Dubai Investment Group, a sovereign wealth fund that invests on behalf of the government of Dubai, wanted to buy the Essex House Hotel in New York City in 2005, it faced an uphill challenge: Not only did it have to convince the hotel’s sellers that it was the best suited buyer, it needed to make peace with the workers’ unions and reassure the mayor’s office that the property would remain a hotel.

It wouldn’t be easy. The Essex House hotel was a local landmark built in 1931 overlooking Central Park. The possibility of a foreign investor owning such an iconic structure raised questions and suspicions locally. Was there political