Nearly one third of sovereign wealth funds that control over $7 trillion in assets are aiming to increase their investments in equity markets during the second half of 2009, new figures show.

According to a survey by FD, 70 per cent of the hedge funds surveyed by the US consulting group showed that they were keen to re-enter the equities market later this year.

One of the respondents said: "We are ready to re-enter the market in a major way - but not for several months given that we are sure prices are only heading down."

"Valuations of the assets we are targeting are certainly more attractive but we still feel they have further to go during 2009. Our view is that valuations may bottom out towards the end of this year," said another.

However sovereign wealth funds said they will continue with their passive investment styles.

The funds that were interviewed stated without exception that their preferred option for investing was through minority participation via capital injection.

No SWF said they had a desire or intention to control of manage investee companies - a clear indication of their passive investment natures.

"It is a serious misconception that we are active or strategic investors - our sole objective iss to invest across a very broad range of assets and geographies to create long term value," said one surveyed fund.

The majority of the funds tagged Asia and South America as regions that provide the "most attractive" for a combination of qualitative and quantitative reasons.

Mexico and Brazil topped the list as the two most attractive countries for investment opportunities.