Sovereign wealth funds are regaining their appetite for deals in western markets after making the lowest number of foreign investments during the first quarter since 2005, following a series of disastrous bets in high-profile public companies.

State-owned investment funds from oil-rich countries and Asian exporters made just 26 investments worth a total $6.8bn in the first three months of the year, according to Monitor Group, the advisory firm, and Fondazione Eni Enrico Mattei, an international research centre. That represents a fall of more than 50 per cent on the number of investments made in the first quarter last year, highlighting their retreat from international markets.

“The volatile investment climate coupled with slowing income from plummeting oil prices and contracting global trade in 2008 caused SWFs to scale back their acquisitions to reflect their perception of increased market risk during the first [quarter],” Bill Maracky, partner at Monitor Group, said.