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Fears that the holders of cash-rich sovereign wealth funds in Asia and the Middle East are set to dominate boardrooms in the West are unfounded, an expert has cautioned.

John Nugee, a director of State Street Global Advisers, speaking at the launch last week of a report he co-authored on the new investment vehicles, warned: “At the moment sovereign wealth funds are roughly half in equities, which we expect to increase to roughly 60 per cent.

“We expect equity values will probably be lower and we expect pressure on bond prices, which means bond prices will rise.

“The dollar has a greater proportion of the bond market than the equity market so we see this shift from bonds to equities as putting pressure on the dollar.”

Fears of foreign state powers gaining control in Western companies’ boardrooms through SWFs have so far proven unfounded, he added, as those responsible for managing the funds have chosen not to exercise many of their corporate rights.

He said: “They haven’t put people on the boards of Western companies, even where they are entitled to. Most have said they won’t exercise their votes as shareholders, even if they are entitled to. This is clearly to placate the West.”

But he also claimed the funds may have to become more active in the firms in which they have invested to ensure good management at those businesses, adding: “Passive investors can be the enemy of good corporate governance.”

The study claimed the state-owned vehicles now hold around £1.5 trillion in assets and predicted this would grow to a little under £4 trillion within four years, as 12 funds have been launched since 2005.

George Hoguet, the co-author of the 50-page study, wrote: “Since 2001, the US dollar’s share of allocated currency reserves has fallen from 71 per cent to 65 per cent. Many factors affect the value of the dollar, but at the margin, as SWFs increasingly diversify into global portfolios, their activities may place further pressure on the dollar.”

But, he added, there are “several factors that impact the value of the dollar” and called for investors to be “cautious” in “attributing movements in the dollar to any one factor”.