In Norway, apart from the well known sovereign investment fund investing abroad, the state also owns shares equivalent to about 1/3 of the total value of all companies listed on the Oslo Stock Exchange. I'm sure you can go wrong there, but it clearly is also possible not to, as this model has worked quite well so far.

At least a state investment fund is in for the long term. This is better for the company than a bunch of short-term hedge funds which only seek to bleed the company dry.