After Glory Days, Cheap Oil Forces Sovereign Funds to Retreat

"We have steadily decreased our overweight to Europe by using the inflow to the fund in buying other regions," said Ole Christian Bech-Moen, chief investment officer for allocation strategies. "If the inflow is lowered then that transition path may need to be revised," he told Reuters, declining to be specific on the timeframe.

Not all funds will suffer big outflows - around 40 percent of SWF assets are not driven by commodity revenues, according to JPMorgan Asset Management, so should be less affected.

The smaller populations of some Gulf states, and their relatively low oil price breakeven levels, should also give some governments room to manoeuvre. For example, Oman and Abu Dhabi can make cuts to infrastructure spending relatively easily.

But even the big Asian funds, which are not funded by oil revenues, have to contend with a much stronger dollar. As a result, China's foreign exchange reserves have fallen to their lowest level since February 2013.

(Additional reporting by Saeed Azhar in Singapore; Editing by Pravin Char)