Просмотр

Sovereign Wealth Funds - Concerns That come with SWFs

Several countries are keeping their economies faraway from SWFs due to the concern that some investments are now being diverted for political objective to accumulate control over strategically important assets. It is often observed that OPECs happen to be diverting large pool of funds in obtaining strategic assets and purchasing important sectors like infrastructure, telecom, energy and media across developed countries. After much opposition from US Congress, Abu Dhabi's Investment Authority was required to withdraw by reviewing the ADIA Dubai Port after 9/11 terror attacks.

China Investment Corporation's $5 billion stake in Morgan Stanley and buying of Citigroup by Abu Dhabi Investment Authority for $7.5 billion was severely criticized following your recent subprime crisis.

Deficiency of transparency may be a major concern for nations which are experiencing increasing [http://moniqueeg.posterous.com/the-main-advantages-of-contacting-an-organize structured settlement buyer sovereignfunding] of their economies. SWFs are now being criticized for inadequate disclosures regarding size and method to obtain funds, investment objectives as well as their holding in private equity funds. While in the U.S., these concerns are addressed by the Exon-Florio Amendment for the Omnibus Trade and Competitiveness Act of 1988, Western european preferred to avoid SWF funding. Some experts opine that this type of fear is unwarranted if we compare the dimensions of SWFs assets ($2 trillion) with all the size of global investment funds assets ($20 trillion) and securities traded in dollars ($50 trillion).

IMG experimented with address this concern of transparency and governance by issuing the Santiago Principles in 2007, a collection of 24 voluntary principles to ensure transparency and sound governance by sovereign wealth funds (SWFs). However, hardly any SWFs have already been following these principles seriously.