SWF Radar IMF

Gordon Brown, the British prime minister, writes that, “The growth of Sovereign Wealth Funds (SWFs) is one of the most notable characteristics of the current wave of globalisation. The UK government welcomes the positive role that SWFs such as those in the UAE and Qatar have in the efficient allocation of capital and the benefit that they bring to the global economy by taking a long-term view of their investment decisions. To ensure a transparent environment that supports SWF investment, we have fully endorsed the lead taken by the IMF to develop a common set of principles. And, of course, the UK, with its history of open investment, will continue to be a natural place for SWFs to invest.”

Adam O. Emmerich of Wachtell Lipton Rosen & Katz has posted a note (based on a client memorandum) on the Harvard Law School Corporate Governance Blog on the IMF’s new GAPP guidelines for SWFs (also known as the “Santiago Principles”).

Seeking Alpha writes that, “While huge sovereign wealth funds (SWFs) have sprung up in the Middle East and Asia (read China), economists say borrowing from them could prove more painful than borrowing from the IMF.”

Gulf News writes that, “Gulf sovereign wealth funds will play a significant role in stabilising the regional economies in the event of a global economic slowdown spilling over into the Gulf, Mohsin Khan, Director of the IMF’s Middle East and Central Asia Department, told Gulf News on Sunday.”

Emirates Business 24/7 reports that, “Abu Dhabi Investment Authority (Adia) - rated the world’s largest government fund - has started plans to enhance disclosure of its operations in line with an agreement with the IMF last week.”

This is quite a result for the IMF.

IMF Survey has published an article on the new GAPP guidelines for sovereign wealth funds.

Edwin Truman of the Petersen Institute writes that, “The GAPP is a solid piece of work that should help to dispel some of the mystery and suspicion surrounding SWFs. The International Monetary Fund deserves substantial praise for facilitating an agreement in the IWG in a remarkably short period of time.”

Emirates Business 24/7 writes that, “The publication of the SWF principles may have been overshadowed by bigger events but long-term they will be an important contribution to the global economy. For a start, they will improve the governance of the funds - particularly those owned by smaller nations who perhaps do not have the rigorous standards and controls of an Abu Dhabi Investment Authority (Adia) or Dubai International Capital (DIC).”

Emirates Business 24/7 writes that, “Hostility against sovereign wealth funds (SWF) is expected to be significantly reduced thanks to the creation of a common set of voluntary principles and practices for SWFs.”

Thomson Reuters reports that, “The Abu Dhabi Investment Authority, the world’s largest sovereign wealth fund, will move swiftly to comply with voluntary principles agreed with the IMF and seek independent verification, a statement from ADIA said.”