Friend or foe? Private equity giants are still deciding whether to love or fear the flow of cash from sovereign wealth funds into developed economies.

Long-term, the massive funds are a potential threat. If they build their investment expertise, they are likely to do more deals by themselves, avoiding the fees siphoned off by intermediaries. As long ago as the 1980s, the Kuwait Investment Authority decided to go it alone with a number of aggressive acquisitions in Europe. More recently, there have been private equity-style deals, such as Istithmar of Dubai’s acquisition of upscale US retailer Barney’s.