SWFs’ Doha meeting adopts three-year strategic plan to enhance investments
November 21 2014 01:19 AM
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Bader al-Sa’ad, chair of the International Forum of Sovereign Wealth Funds (IFSWF) and managing director, Kuwait Investment Authority, making introductory remarks at the 6th annual meeting of the IFSWF at Ritz-Carlton Doha yesterday.

HE the Prime Minister and Minister of Interior Sheikh Abdullah bin Nasser bin Khalifa al-Thani with HE the Minister of Economy and Commerce, Sheikh Ahmed bin Jassim bin Mohamed al-Thani; HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada;  with Bader al-Sa’ad at the opening session of the IFSWF yesterday. PICTURES: Noushad Thekkayil

 

By Santhosh V Perumal

Business Reporter

World’s leading sovereign wealth funds (SWFs) yesterday unanimously agreed upon a “Doha Agreement”, adopting a three-year strategic plan to ensure free flow of long-term global capital and strong real returns for the progeny; even as they asked recipient countries to be more transparent.

Moreover, 21 more countries are planning to establish SWFs; these were disclosed by the International Forum of SWFs (IFSWF), which held its sixth annual meeting here, hosted by the Qatar Investment Authority (QIA).

The strategic plan, agreed by IFSWF, seeks to leverage those strengths to work towards becoming an important global reference on the governance, investment and operational practices of IFSWF-member SWFs.

Additionally, through championing long-term investment based on financial and economic grounds, the funds will contribute to maintaining a stable global financial system, IFSWF chair and CEO of Kuwait Investment Authority Bader al-Sa’ad told the media at the customary press conference.

“We have achieved concrete steps towards delivering on a three-year strategy which we believe will have value for our members, and for global markets more broadly. The Santiago Principles provide a framework for embedding disciplined long-term governance, investment and operational practices investment strategies,” he said.

Santiago Principles are a framework of principles and practices voluntarily endorsed by IFSWF members with an emphasis on appropriate governance and accountability arrangements and sound, prudent conduct of investment practices.

One of the principles is that, wherever the SWF’s activities have significant direct domestic macroeconomic implications, those activities should be closely co-ordinated with the domestic fiscal and monetary authorities, so as to ensure consistency with the overall macroeconomic policies.

Majed al-Romaithi, a board member and  the executive director of the Real Estate and Infrastructure Department of Abu Dhabi Investment Authority, said the investments of SWFs in local market were dependent upon the mandate and from experience, it is observed that volatility tends to move together with overseas market.

The three-year strategic plan encompasses knowledge-sharing between IFSWF members; co-operating on issues of mutual interest; on-going training and development for new members; and the potential for combined efforts to identify and implement research,” Adrian Orr, IFSWF deputy chairman and CEO of New Zealand Superannuation Fund, said.

To a query on lack of transparency of SWFs; al-sa’ad shot back asking how transparent the recipient countries are and in this regard, he pointed to Dubai Ports World controversy and added it showed the lack of transparency.

DP World (DPW), a state-owned company in the UAE, had acquired Peninsular and Oriental Steam Navigation Company (P&O), a British firm. Although the sale was approved by Washington but various political figures argued that the takeover would compromise national security.

To another query whether the investments by SWFs were politically motivated, he said there was nothing to prove that investments were of that nature.

Asked about the current trough in the oil prices; IFSWF board were of the opinion that it was one of the “challenges” to deliver “strong real returns for the future generation”.

IFSWF also welcomed five new members: Fondo Strategico Italiano Spa., Fundo Soberano de Angola, Joint Stock Company Sovereign Wealth Fund “Samruk-Kazyna”, Nigeria Sovereign Investment Authority and Russian Direct Investment Fund.

The meeting noted that there are currently 82 SWFs globally and “21 countries are considering establishing new sovereign funds, of which many are already participating in IFSWF meetings as observers”.

QIA CEO Ahmed M al-Sayed said it will continue to invest in China as part of its portfolio management and declined to be specific on the country’s wealth fund’s investments.

 

 

 

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