European nations are increasingly utilizing billions of euros from the bloc’s post-Covid recovery fund to establish and finance new sovereign investment funds. According to the Sovereign Wealth Funds Report 2026, published on Friday, July 10, Europe now represents 16 percent of total global sovereign assets. These funds are primarily designed to strengthen strategic autonomy and enhance industrial competitiveness across the region.
The report, a collaborative effort between IE University’s Center for the Governance of Change and ICEX-Invest in Spain, highlights that this surge is largely powered by a “new generation of European funds” that rely on seed capital derived from the Covid recovery program. Launched in 2022 to support economic recovery, the NextGenerationEU fund provided €648 billion in grants and loans to the 27 EU member states, contingent upon the submission of national recovery plans. Unlike traditional sovereign wealth funds—such as Norway’s, which reached a value of $2.1 trillion in March 2026 and is built on mineral and oil export revenues—the NextGenerationEU model is funded entirely through debt raised by the EU Commission via bond markets.
Specific examples of this trend include Spain’s “Spain Grows” fund, introduced in January by Prime Minister Pedro Sánchez. The initiative aims to use €10.5 billion of EU recovery money to mobilize €120 billion in private debt for housing and national security investments. Additionally, France’s FOCO, managed by Cofides, serves as another key example. The report notes that these initiatives could trigger a second wave of sovereign wealth fund creation between 2026 and 2030, as the impact of the NextGenerationEU effect becomes increasingly measurable. Furthermore, the Portuguese government received parliamentary approval in June to launch its own sovereign wealth fund.
Beyond the structural growth of these funds, the research identified a clear investment trend: one out of every three dollars deployed by these sovereign wealth funds during the analyzed period was directed toward artificial intelligence. The EU funding program itself is scheduled to expire at the end of this year.
The recovery fund was launched in 2022 to help EU economies recover from the gigantic hit caused by the Covid-19 pandemic. Composed of loans and grants, it offered a total of €648bn to the EU-27 who submitted national recovery plans to the EU Commission in order to access the cash.
