Strategic investment funds (SIF), a form of sovereign wealth fund, are a new instrument to support economic management and development. SIFs help catalyze new industry, attract foreign investors, support domestic financial market development, and support the diffusion of corporate best practices in existing industries and firms. For some, SIFs therefore help improve a country’s economic capabilities. For others, however, SIFs may simply extend state control and influence in the economy at the expense of economic dynamism over the long term. The aim of this research is to explain how SIFs, as a new policy instrument, facilitate the transformation of managerial practices and influence in the economy at the expense of economic dynamism over the long term.