Sovereign wealth funds (SWFs) started making the headlines in the midst of the global financial crisis. They were welcomed neither by academics nor by politicians of Western countries. In a flurry of 2008 papers SWF were peremptorily told what they should and shouldn't do. The reasoning underlying the prescriptive norms was flawed in two respects. First it simply equated SWFs to other institutional investors. Second it advocated models of asset allocation based upon the efficient market hypothesis, while the global financial system itself was crumbling! The present paper takes a radically different view. It shows precisely how SWF balance sheets are interconnected with the balance sheets of the public sector of the nation whose wealth they transfer over time. Therefore they are, by their very nature, strategic actors. Their objectives, which shape their asset liability management, participate in the long-run policy of their nation. Their business model is framed on the integration of their asset liability management into the national political framework. Their governance cannot abstract from the broader environment, which has been upset by the transformation of the world economy. The financial crisis has invalidated the Wall Street paradigm of market finance, intermediated by global investment banks to finance long-term investment worldwide. The retrenchment of European banks in cross-border lending enhances the role of public finance in emerging market economies. Meanwhile the catching up process, which has been reaching more and more developing countries, calls for huge amounts of real investments. This is why a regime shift in finance is under way, which gives prominence to public investors. The last part of the paper shows how public private collaboration is arranged in China to finance small and medium-sized enterprises through private equity funds.