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SWF Investments Global Implication

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Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Published: Fri, 16 Mar 2018

Sovereign Wealth Funds, Investment vehicles of Governments are increasingly seen in action through acquisition of either natural resources like oil and gas fields or equity holdings in MNCs. While the reasons for establishing a SWF may vary from commercial to strategic ones, SWFs’ influence on the countries and corporate is substantial. Since they mostly stay invested for a long-term they do not pose threat of pulling out in the short term and creating huge volatility in the financial markets. Since their investment corpus run to billions, by staying invested for a long time, they have a stabilizing effect on the capital market even during crashes and short term fluctuations. However, regulations and guidelines of the SWF also needs to be put in place in order to avoid it from exercising any soft control or strategic moves that may affect the sovereignty of the country allowing investments.

SWFs provide long-term funding to the countries where they are investing facilitating infrastructure development, capital mobilization and liquidity to the capital market. India has huge deficit in terms of financing for long-term projects, especially in infrastructure. While regulations have to be intact to avoid exploitation by foreign governments, letting SWFs in the country will create a huge advantage for the country’s myriad sectors.

INTRODUCTION TO SOVEREIGN WEALTH FUNDS :

Sovereign wealth funds are investment funds managed by the state with an intention of earning revenues on its idle foreign resources. The investments are made in financial assets like stocks, bonds, gold and assets of the nature of resources like oil, mines or gas. These wealth funds can be funded by excess foreign reserves accumulated through trade, proceeds from privatization, fiscal surpluses in the economy or foreign currency operations. The reserves funding these SWF do not include reserves that are to be employed in the normal conduct of monetary and balance of payment operations.

The purpose of establishing SWF are as follows:

  1. Protecting and stabilizing the budget and economy from excess volatility in revenues/exports
  2. Diversify from non-renewable commodity exports
  3. Earn greater returns than on foreign exchange reserves
  4. Assist monetary authorities dissipate unwanted liquidity
  5. Increase savings for future generations
  6. Fund social and economic development
  7. Sustainable long term capital growth
  8. Political strategy

BENEFITS OF SWF:

The benefits arising out of a SWF are multifold. They are as follows:

Productive employment of resources (Savings Funds): The economies which have excess foreign reserves or fiscal stimulus do not earn any return from idle resources which can be put to use in order to earn returns on them. The returns earned can be utilized to stabilize the market in times of turbulence, downturn or recession.

Resource acquisition: The fund invests in resources like oil and gas fields abroad in order to achieve energy security and meet its growing demands. CIC’s (China Investment corporation, the SWF of China) recent acquisition of gas fields and oil wells abroad is in this direction only.

Market stabilizers (Stabilization Funds): SWF can act as market stabilizers in case of economic and financial downturns. It is mainly created in countries to insulate their economy from swings in commodity prices. They can mitigate market stress like they have done in Asian markets by financial backing of large banks thereby ensuring continuous bank-lending.

Economic development (Development funds): Infrastructure is a huge priority in developing countries and requires lenders with long-term capital commitment. SWFs can fund the infrastructure operations of a country.

Ensuring Social security (Contingent Pension Reserve Funds): The population of developed countries is ageing and the workforce is shrinking. Providing social security to the huge population will be a huge drain on the exchequer. Since the birth rate also has shrunk, taxing few to support many will neither be sustaining nor is socially acceptable to the masses. So it becomes imperative for these ageing countries to earn significant returns on its pension funds.

In the investing country, SWF could lead to “tax cuts, better public works, and stronger state-run businesses.” It can also, as was previously said, provide a diversification in the investing country’s assets and a protection from the exchange rate volatility and from the downs of the market.

PRESENT STATUS OF SWFs GLOBALLY:

Name of the SWF

Country

Fund size

($ billion)

Fund Type

Recent activity

Abu Dhabi Investment Authority

UAE – Abu Dhabi

627

Oil

Acquisition of Nova Chemicals, Canada’s largest petrochemical producer(2009), Stake in Lodha’s residential tower in Mumbai (2010), Joint-bid for UK Channel Tunnel rail link

Government Pension Fund- Global

Norway

443

Oil

Anchor investor in Gujarat Pipavav Port IPO

SAMA Foreign Holdings

Saudi Arabia

415

Oil

Increased its gold holdings by 322.9 tons (2008). Investment in low-risk securities.

SAFE Investment Company

China

347.1

Non-Commodity

China Investment Corporation

China

332.4

Non-Commodity

Plan to buy Liverpool – team of UK’s football league, Acquisition of Heritage oil in Uganda (2010)

Government of Singapore Investment Corporation

Singapore

247.5

Non-Commodity

Stake in Lodha’s residential tower in Mumbai (2010), Investor in Chesapeake, 3rd largest gas producer in US (2010)

Hong Kong Monetary

Authority Investment Portfolio

China – Hong Kong

227.6

Non-Commodity

Kuwait Investment Authority

Kuwait

202.8

Oil

Plans to double its stake in Agricultural Bank of China(2010)

National Social Security Fund

China

146.5

Non-Commodity

National Welfare Fund

Russia

142.5

Oil

Temasek Holdings

Singapore

133

Non-Commodity

Stake in Lodha’s residential tower in Mumbai (2010), Investor in Chesapeake, 3rd largest gas producer in US (2010)

Libyan Investment Authority

Libya

70

Oil

Qatar Investment Authority

Qatar

65

Oil

Raised its stake in Agricultural Bank of China(2010)

Australian Future Fund

Australia

59.1

Non-Commodity

Revenue Regulation Fund

Algeria

54.8

Oil

Kazakhstan National Fund

Kazakhstan

38

Oil

Alaska Permanent Fund

US – Alaska

35.5

Oil

Apart from the countries listed above many other countries too have their own SWF. These SWFs also have equity holdings in global companies like CitiBank, Morgan Stanley. The recent acquisition of Parkway Hospitals by Khazanah, the Malaysian SWF is an instance. Increasingly SWFs are investing in aggressive and high-risk investment avenues when compared to their older practice of investing in low risk bonds and depositing reserves in other central banks.

TYPES OF SWF:

SWF can be either commodity based or non-commodity based.

Commodity based SWFs generate their capital from revenues received from exports of those commodities. They also invest in acquiring new resources like oil wells, gas fields, mines in order to either achieve a strategic advantage or to boost up their wealth of resources.

Non-commodity based SWFs have the fundamental purpose of increasing their returns and they invest in equities, bonds, infrastructure and other long-term projects. They also try to increase their holdings in multinational companies either through equity or through convertible debentures. They may also infuse their own management team in order to influence the company actions. SWFs that are pension-fund based which are seeking to increase their long-term assets are few examples.

LITERATURE REVIEW:

A. Investment analysis of Sovereign Wealth Funds in the world:

The power of SWFs was felt during the severe liquidity crunch experienced during the US sub-prime crisis of 2008. The SWFs were welcomed to pour capital into the liquidity-starved markets. The capital provided by Abu Dhabi Investment Authority (ADIA) from UAE into Citigroup is just one instance. Leading financial powerhouses of Wall Street like UBS, Merrill Lynch got similar funding from the SWFs of countries like Singapore, Saudi Arabia. The stabilizing effect of SWFs was realized and from then onwards many countries are trying to rope in SWFs to bring capital to aid long-term projects like infrastructure.

SWFs are expected to increase to $12 trillion dollars in 2012 from $3 trillion at present. Though many SWFs were conservative in the choice of investments initially, they have moved to more risky assets with increase in risk-appetite and long investment horizons. Also with dollar depreciating, countries are scouting for alternative investment opportunities other than Treasury bills and bonds. SWFs are eyeing stocks, real estate and infrastructure, private equity and bonds. Temasek holdings for instance has holding in ICICI bank (India), Singapore Airlines (Singapore), Standard Chartered Bank (England).

The investment avenues range depending on the purpose of establishing the SWF in the first place. Countries like Norway and Singapore look for long term investment opportunities and so invest in high-maturity infrastructure bonds and stocks undertaking credit and liquidity risk whereas countries which are export dependent will have to hedge themselves against price risks and recession and they will take corresponding positions in commodities. Stabilization funds will invest in short and medium term treasury bonds so that the liquidity is provided at the right time by selling the liquid securities. Thus the SWFs have to choose the appropriate asset allocation and investment strategy.

The major junk of the investment made before the US sub-prime crisis was in financial services and real estate by all the SWFs. This turned out to be loss-generating for the SWFs and they are looking to diverse their holdings by investing over different asset classes and across countries. The investment of SWFs into the stock market will work good for the world markets as it brings lot of liquidity into the market. Estimates have been made that around $400 billion dollars will flow into the markets every year and this is expected to rise the risk-free rate by 30-40 basis points.

However not all countries are equally enthusiastic about the roles of SWFs as there is a fear of losing control to the foreign entities. While some countries like UK are playing down the threat of SWFs, few countries like US and Germany have raised objection to the lack of transparency in the operations of SWFs. The recent agitation in US regarding the acquisition of 6 American ports by Dubai Port World shows the lack of trust in SWFs. A uniform standard set by international bodies like IMF making it compulsory for SWFs to publish annual reports and disclosures will go a long way in building trust in SWFs and thus encourage cross-country movement of capital.

However the returns generated by the equity markets of the developed world is only around 10-15% while that given by emerging countries is around 25-30% in the same period. This attracts more and more SWFs into the merging market. Also SWFs who stayed invested in US market during the sub-prime crisis lost due to aggressive holdings like junk bonds and poor risk management of the market. SWFs worldwide lost $57 billion in listed forms. India and China which quickly rebound from the economic crises and has robust risk control measures have caught the attention of the SWFs. Norway for example is seriously looking into Indian Market for investing as much as $4 billion (18800 crores). The investment plans include green ventures thus supporting the growth of clean energy establishments in a country that depends on coal for maximum energy needs.

BENEFITS OF ALLOWING SWF INVESTMENS:

Sovereign Wealth Funds represent significant benefits to the country in which they invest as well as to the country that has them. The benefits of the SWF are not limited to the investing country; they are also extremely beneficial to the country where the investment is made.

The liquidity they supply participates in “raising asset prices, and lowering borrowing yields.”

SWFs, in principle, are not highly leveraged and they are long-term investors. Therefore, when the market faces short term volatility or decreases in prices, SWF are not likely to withdraw their investment as private funds may do. That leads to stability in the market, because during critical times, withdrawal of large investors from the market may lead to a crash. In the United States for example, in the absence of these funds invested in the financial market the present subprime crisis would have been worse. It could have meant “a complete collapse of major industry players which would cause catastrophic effects throughout the economy.”

The injection of foreign capital into a country also “helps expand businesses and finance the current account deficit. The business competition that results leads to a decrease in the price of goods and services, an increase in their availability and variety as well as in the productivity and efficiency of domestic businesses.”This business expansion, also leads to more jobs opportunity and to a higher living standard in the country where the SWF are investing.

Sovereign wealth funds are so beneficial for the country where they invest that many governments are actually soliciting and pursuing governments having SWF to invest in their countries without putting any conditions on them. For instance “Sweden’s Financial Markets Minister said the Swedish Government will target Persian Gulf sovereign wealth funds” he added that “Sweden has ‘companies for sale’ and hopes sovereign wealth funds ‘are looking.”

Usually these funds are non controlling investment; they repeatedly emphasized in press releases that they do not seek control of the companies in which they invest. And that all they were after was the financial income of their investment.

So why are some countries, such as the United States, France so concerned about these funds, and look for ways to regulate them at the risk of driving them away?

This is mainly because of the lack of transparency in SWFs and the lack of a super-governing body to stress standardization of reporting and disclosures. US is apprehensive that China and Russia may be trying to acquire strategic stakes in the country even though no such motive has been observed through the actions of the SWFs or otherwise. The recent offer of Huawei for 3Com was blocked by US on concerns that Huawei’s close ties with PLA of China will be a threat to US’ national security.

Such apprehensions about countries generally work to blocking productive and profitable deals. However a lot depends on developing confidence between the countries in order to promote cross-holding of each others’ businesses. Encouraging SWF of one country to invest will be reciprocated by the other country by opening up to the others’ corporate to set their bases there.

PARAMETERS FOR ALLOWING SWF INVESTMENT:

The market reacts positively to SWF investment announcements, mainly due to investments in firms facing financial difficulties and the information generation of stock selection by the funds. The degree of SWF transparency is also an important determinate of the market reaction, and both the fund and the existing shareholders of the target firm benefit from improved disclosure. Further, target firms’ profitability, growth, and governance do not change significantly in the three-year period following the SWF investment relative to a control sample. Overall, findings suggest that SWFs are profit-oriented passive investors, their investments convey a positive signal to market participants about the target firm, and investors use voluntary SWF disclosure as a signal of the quality of screening and monitoring by SWFs.

The ideal way for SWFs to enter into the country is to improve its transparency. Since they do not have any one super regulator, they may be treated with suspicion. However adoption of a transparent approach will go a long way to benefit both SWFs and the host countries.

One measure of transparency is the Linaburg-Maduell Transparency Index.

The Linaburg-Maduell Transparency Index was developed at the Sovereign Wealth Fund Institute by Carl Linaburg and Michael Maduell.

The Linaburg-Maduell transparency index is a method of rating transparency in respect to sovereign wealth funds. Pertaining to government-owned investment vehicles, where there have been concerns of unethical agendas, calls have been made to the larger “opaque” or non-transparent funds to show their intentions.

Norway currently leads the pathway to reducing the need for a code of conduct, possibly to the benefit of all sovereign investors. This index of rating transparency was developed around this fund, as it is known to be the pinnacle of clear investment intentions.

This index is based off ten essential principles that depict sovereign wealth fund transparency to the public. The following principles each add one point of transparency to the index rating. The index is an ongoing project of the Sovereign Wealth Fund Institute. The minimum rating a fund can receive is a 1, however, the Sovereign Wealth Fund Institute recommends a minimum rating of 8 in order to claim adequate transparency. Transparency ratings may change as funds release additional information. There are different levels of depth in regards to each principle, judgment of these principles is left to the discretion of the Sovereign Wealth Fund Institute.

B. Barriers to Entry: Foreign Direct Investment and the Regulation of Sovereign Wealth Funds

SWFs were considered the saviors providing liquidity through direct and indirect investment in financial services industry at a time when sub-prime crisis crippled the availability of a steady source of financing to the corporate. SWFs were openly welcomed to invest in the respective countries, however not without any reservation. There was a compelling decision to be made between access to huge liquidity and national security. Though no such action like forcing their influence on the host country or holding-company was exercised either through management control or voting rights, as perceived by proponents of national security, there is a compelling need to have a set governing principles and standards in order to benefit the SWF as well as the recipient country. SWFs invested $24.8 billion dollars in just the first two months of 2008, bringing the total investment in the US financial industry to $60.7 billion since 2007. Since SWFs bring with them such huge liquidity it is difficult to close the gates to them.

However, there is a growing fear in US for SWFs, especially that of China. SWFs characterized as power brokers are feared to function with purposes other than merely commercial ones though no such action has been witnesses in the past. The risk related to the homecoming of SWFs can be classified into three risks, namely

  • Risk of Financial Contagion
  • Exercise of soft political power
  • National security considerations

While the purpose of SWFs can be purely commercial, there is a strong need for transparency and accountability among the SWFs.

Risk of Financial Contagion: The credibility of a SWF can be judged by its investment strategies. Any shorting strategies in commodities or stocks can be destabilizing to the market and can turn away new entrants to the market. There is also a danger of sudden capital flows which would further destabilize the market. For the same reason, Western countries, home to major chunk of SWF investment, demand a set of guidelines and principles to regulate the SWFs as it is not in the purview of host countries to govern them.

The SWFs claim that their assets are managed professionally with the help of management control of leading companies like Merrill Lynch thus insulating the fund from political or strategic influences. Norway (Norwegian Government Pension Fund-Global) has been a frontrunner in promoting transparency in its operations releasing appropriate disclosures.

The Exercise of Soft Power: For the larger established funds there is no evidence that investment strategies differ in substance from those of traditional pension funds. Indeed it is arguable that any short-term attempt to destabilize the market would be exceptionally counter-productive to longer-term interests precisely because the initial exit could easily be traced. The boom in commodity prices in particular compounds the perception that investment strategies could be used to advance the potential exercise of political soft power. Corporate takeovers and the acquisition of strategic stakes (particularly if accompanied by board rights) give state actors potential access to proprietary intellectual capital. Without appropriate and enforceable checks and balances, misuse of this information could be disseminated to a wider range of national champions. A related risk is that the investment could influence strategic imperatives (for example by skewing lending priorities towards projects favored by donor countries) thus undermining the efficacy of specific corporate governance controls.

The more aggressive investment strategies developed by China and Russia, in particular, but also from authoritarian governments in the Gulf, have exacerbated these concerns. While there is no evidence that any SWFs have ever been used to further political ambitions, ascertaining the motives of secretive or authoritarian governments is a notoriously imprecise exercise. 

The Protection of the National Interest: Many countries impose restrictions on foreign direct investment in parts of the critical infrastructure because of strategic and cultural factors. These can include restrictions in dual-use technologies or protection of core communication portals, such as media markets, from undue foreign influence. The restrictions can be complete, partial, or entail a review process that, in turn, may or may not privilege investment (dependent on the salience of wider security concerns). The problem centers on a lack of agreement on what “critical” means and the parameters that governments can use to define “national security” interests. The inevitable consequence is a lack of transparency in investment review process. This lack of transparency makes the entire process susceptible to political and economic populism. 

Conclusion:

There are a number of sound policy reasons to request greater disclosure from SWFs.

Greater disclosure could provide an early warning system of volatile build-ups of capital within particular sectors. 

Greater oversight reduces the potential of sudden capital withdrawals causing or amplifying financial crises.

It serves broader public aims, including an increased hope for transparency in overarching domestic fiscal policy.

Requiring SWFs to render explicit their investment strategies reduces the perception that foreign policy objectives trump commercial ones. 

C. SOVEREIGN BRANDS SURVEY 2010:

Sovereign Brands Survey 2010 is a global study into the attitudes of national elites towards sovereign wealth funds (SWFs) and their countries of origin. With a combined wealth of more than $3,500billion in assets, SWFs are a key source of global investment, yet comparatively little is known about them. At a time of great volatility and uncertainty, sovereign wealth funds represent an extremely important source of capital for the global economy.

Despite this importance, many nations appear to view these funds with caution, and no matter how large the pool of funds on offer, some SWFs could find their path to the most attractive investments blocked.

The study, conducted between 15 January and 1 February this year, covered elite attitudes in seven countries (US, UK, Germany, Egypt, Brazil, India and China) towards 19 SWFs in Norway; Singapore; Hong Kong; Malaysia; Abu Dhabi; Dubai; Kuwait; Qatar; China; Bahrain; Oman; Mexico; Russia; Libya; Kazakhstan; Brunei; Algeria; Nigeria and Botswana.

METHODOLOGY:

  • Conducted 1064 interviews among broad elites in 7 markets between 15 January 2010 and 1 February 2010.
  • Interviews were conducted online in the UK, US, Brazil, Germany, China and India. Interviews in Egypt were conducted face to face.
  • Broad elites are defined as influential members of society who are university educated, earning in excess of £50k or local market equivalent and with an active interest in national and international affairs in the both politics and business. This group is commonly used as a proxy for decision makers and their influencers.

OBSERVATION AND FINDINGS:

A.FAMILIARITY AND FAVOURABILITY TOWARDS SOVEREIGN WEALTH

FAMILIARITY DRIVES FAVOURABILITY

Elites were less familiar with sovereign wealth than they were with other forms of wealth or funds (see chart 2).

57% of elites were familiar with sovereign wealth

66% of elites were familiar with family wealth

82% of elites were familiar with insurance funds

This lower familiarity is likely in part to be driving lower favourability for sovereign wealth compared to other forms of investment as there is a clear correlation between the two.

19% of elites were favourable towards sovereign wealth

24% of elites were favourable towards family wealth

33% of elites were favourable towards insurance funds

FAMILIARITY DRIVES FAVOURABILITY BY COUNTRY

Of the countries surveyed, the US, the UK and India were least familiar and least favourable to sovereign wealth fund investment, whilst Egypt, Germany, Brazil and China were most familiar and most favourable (see chart 1).

CHART 1: FAMILIARITY DRIVES FAVOURABILITY

Q. In general how favourable are you to the following sources of investment? (% Very favourable) /Q. How familiar are you with the following as sources of investment? (% Very/somewhat familiar)

CHART 2: CORRELATION BETWEEN FAMILIARITY AND FAVOURABILITY WITH WEALTH AND FUNDS

B. ATTITUDES TOWARDS SOVEREIGN WEALTH FUNDS

CONCERNS ABOUT SWFs

Elites were clearly wary of sovereign wealth funds. As you can see in chart 3, half of all respondents were more concerned about sovereign wealth funds investing in their country compared with other forms of finance.

CHART 3: CONCERNS ABOUT SOVEREIGN WEALTH FUNDS INVESTING INTO THEIR COUNTRIES VERSUS OTHER FORMS OF FINANCE

Q. How concerned, if at all, would you be if a sovereign wealth fund were to invest in your country compared with other forms of finance?

RELIABILITY OF SWF INVESTMENT

Sovereign wealth was generally seen as a more reliable source of investment than private equity and significantly more reliable than hedge funds, while insurance funds, investment banks and family wealth were considered more reliable (see chart 4).

CHART 4: COMPARATIVE RELIABILITY OF INVESTMENT SOURCES

Q. How reliable do you consider the following sources of investment compared to other sources of investment? (Much more reliable)

TRUST IN SWFs

Where it concerns trustworthiness, investment sources were generally perceived in a positive light. Yet again, sovereign wealth was seen as less trustworthy than other investment sources, with hedge funds being the only source seen as less trustworthy (see chart 5).There is a correlation between views on reliability and trustworthiness. Germany considered sovereign wealth to be significantly more reliable and trustworthy than all other forms of investment, whereas the UK, the US and India considered SWFs less reliable and less trustworthy.

CHART 5: TRUSTWORTHINESS OF INVESTMENT SOURCES

Q. How trustworthy do you consider the following sources of investment to be?(Very/somewhat trustworthy)

SWF INVESTMENT MOTIVATED BY POLITICAL OBJECTIVES

All countries’ SWFs (with the exception of Singapore and Norway) were considered likely to be motivated by political objectives. As chart 6 illustrates, larger countries were seen as more likely to have political motivations than smaller countries and micro-states.

SWF investments from Russia (87%) and China (84%) were considered most likely to be influenced by political objectives. SWFs from Botswana (55%), Singapore (50%) and Norway (43%) were seen as least likely to be motivated by political objectives .

CHART 6: PERCEIVED LIKELIHOOD OF POLITICAL OBJECTIVES INFLUENCING INVESTMENT DECISION

Q. In your opinion, how likely is it that the sovereign wealth funds indicated have a political objectives that might influence their investment decisions?

C. APPROVAL OF SOVEREIGN WEALTH FUNDS INVESTMENT BY INDUSTRY

SWF INVESTMENT BY INDUSTRY

Elites were found to be open to sovereign wealth fund investment in most industries, with particularly high approval in technology, construction, energy and healthcare (see chart 7). All elites were adverse to SWFs investing in their defence sectors (45% approval overall), this view felt most strongly by elites in the UK and Germany. Elites in Brazil, India, China and Egypt were particularly keen for investment into their finance sector.

CHART 7: APPROVAL RATINGS FOR SWF INVESTMENTS BY INDUSTRY

Q: To what extent do you approve or disapprove of sovereign wealth funds investing in the following sectors of your country’s economy? (Strongly/somewhat approve)

D. SOVEREIGN WEALTH IN THE CURRENT ECONOMIC CLIMATE

CONTRIBUTION TO MARKET TURMOIL

Sovereign wealth funds were blamed less for market turmoil than some other forms of investment, such as hedge funds and investment banks, as illustrated by chart 8.

CHART 8: CONTRIBUTION TO MARKET TURMOIL COMPARED TO OTHER FORMS OF INVESTMENT

Q. Based on your impressions, to what extent do you agree or disagree that the investment activities of the sources of investment below contribute more to market turmoil and uncertainty than other forms of investment? (Strongly/somewhat agree)

EFFECT OF GLOBAL DOWNTURN ON INTEREST IN SWFs

The global downturn has spurred interest in SWF investment with more than half (51%) of elites saying they were somewhat or much more favourable towards SWFs since the downturn (see chart 9). This view was felt most strongly in the emerging economies of Brazil, India and China.

CHART 9: RECESSION’S IMPACT ON SWF FAVOURABILITY

Q. How, if at all, has your favourability towards sovereign wealth funds changed since the global downturn?

EFFECT OF ECONOMIC RECOVERY ON INTEREST IN SWFs

The economic recovery has spurred interest in SWFs, with 58% of elites questioned saying they were more favourable towards this type of investment as the global economy improves, compared to 7% who were less favourable, and 35% whose views haven’t changed (see chart 10). Brazil, India and China were more favourable than the UK, the US, Egypt and Germany, and their interest is likely to accelerate as the global economic outlook improves. Brazil, India and Ch


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