According to research published on Friday, 10 July, European Union nations are increasingly utilizing billions of euros from the bloc’s post-Covid recovery fund to establish new sovereign investment funds. The Sovereign Wealth Funds Report 2026 highlights that Europe now represents 16 percent of total global sovereign assets, with these entities prioritizing industrial competitiveness and strategic autonomy.
This growth is largely attributed to a new generation of European funds supported by seed capital derived from the Covid recovery initiatives. The original recovery program, launched in 2022, provided €648 billion in grants and loans to the EU-27 to support post-pandemic economic recovery. Unlike traditional sovereign wealth funds—such as Norway’s $2.1 trillion fund, which is fueled by oil and mineral export surpluses—the NextGenerationEU program is funded entirely through debt raised by the EU Commission on bond markets.
Specific examples of this trend include France’s FOCO, managed by Cofides, and the planned ‘Spain Grows’ fund. In January, Spanish Prime Minister Pedro Sánchez announced that ‘Spain Grows’ would utilize €10.5 billion from the EU recovery program to stimulate €120 billion in private debt for national security and housing investments. The report, developed by ICEX-Invest in Spain and IE University’s Center for the Governance of Change, suggests these initiatives could trigger a second wave of sovereign wealth fund creation between 2026 and 2030, even as the EU funding program nears its year-end expiration. Additionally, the Portuguese parliament approved plans for its own sovereign wealth fund this past June.
Beyond the structural shift in funding, the research also noted a significant focus on technological development, revealing that one out of every three dollars invested by these sovereign wealth funds during the analyzed period was directed toward artificial intelligence.
