As Congress investigates further regulatory oversight of SWF investing

One of the panelists for “The Rise of Sovereign Wealth Funds” discussion at the September 2008 Global Alpha Forum (Source) will be Michael Maduell, President and Founder of The Sovereign Wealth Fund Institute (www.swfinstitute.org). According to The Sovereign Wealth Institute there are currently more than 50 SWFs in the world, controlling in excess of $3.8tln in assets. And although SWFs have been in existence as far back as the 1950’s, the quantum leaps in assets over the past few years (driven largely by the $2.31tln in SWF assets which originate in gas and oil) have brought these funds to the attention of a wider audience.

The legislative attention
In both Europe and the United States, the opaque nature of these funds has brought an increase in legislative attention to regulations on SWF investments. The arguments for further oversight range from the political (the Congressional debate over the 2006 Dubai Ports World raising national security fears) to the economic (France, Germany and the UK all have SWF legislation which allows each country to block SWF investments if the stakes are too large).

According to research published in February 2008 by The Sovereign Wealth Institute, Abu Dhabi Investment Authority (ADIA) at approximately $875bln is the largest SWF, but maintains low transparency making it very difficult to gauge the impact of its current investments on any specific region. An estimation of the investments ADIA has made in the United States comes close to 20%. Therefore, if ADIA and/or other large sovereign wealth funds were to suddenly shift their investment strategies outside of North America, the United States could experience economic destabilization. (Source)

Tim Kennedy, founder of The Strategic Policy Group reported in The National, that members of the bipartisan task force appointed by Congress in February 2008 to investigate the need to regulate SWFs struggled with a dilemma, “how does the US sustain a “free and open international investment regime” while also ensuring that foreign investments are not used to disrupt America’s economy or reshape its foreign policy?.....

Source:
http://www.opalesque.com/AMB2008/46421As_Congress_investigates_further_regulatory_oversight_of.html


Today's Top Stories:

1. http://www.opalesque.com/AMB2008/46422Fund_Launches_Quilvest_to_launch_a.html
2. http://www.opalesque.com/AMB2008/46423Advent_launches_Global_Opportunity_Strategy_to_take.html