Sovereign fund execs flock to Sydney

MURRAY_david_nlThe second meeting of the International Forum of Sovereign Wealth Funds (IFSWF) will take place in Sydney this week, with senior representatives from more than 20 funds discussing subjects including active versus passive investing and strategic challenges in post-crisis investment markets.

Hosted by the Future Fund, whose chair David Murray is also the chair of the IFSW, the meeting will bring together senior representatives of SWFs but also representatives from government agencies and the private sector.

The forum’s deputy chairs are Jin Liqun, chairman of the board of supervisors at CIC, and Bader Mohammad Al-Sa’ad, managing director of Kuwait Investment Authority.

The group met for the first time in Baku last October, which was hosted by the State Oil Fund of the Republic Azerbaijan and the Government of the Republic of Azerbaijan.

At the conclusion of the Baku meeting – where members discussed their common interests in light of the financial crisis, and exchanged views on the investment outlook for sovereign investors – the forum adopted a ” Baku Statement” (below) on its commitment to continue to contribute to a stable global financial system and maintain free flow of capital and investment.

The IFSWF also reviewed progress made by its various sub-committees and outlined a work agenda for the future.

At the meeting the IFSWF welcomed the multilateral efforts and commitment to keep recipient countries’ borders open for cross-border capital flows, acknowledging the OECD and others.

The IFSWF also acknowledged the need for better targeted and good quality financial regulation, but urged that in undertaking global reform efforts, it needs to be ensured that the risk of financial protectionism at the national level is explicitly addressed. It urged that actual implementation of individual recipient country legislation be done in the same spirit of transparency and non-discrimination. As long-term investors, IFSWF members also sought reassurance that recipient countries promote good corporate governance principles.

The Baku Statement

“We welcome the international efforts aimed at maintaining supportive fiscal, monetary, and financial sector policies until a durable recovery is secured; completion of the financial sector and regulatory reforms without delay, and avoidance of protectionism in all its forms. To support this global commitment and to live up to its objectives, the IFSWF agrees to:

(i)                  encourage recipient countries to continue making their investment regimes more transparent and non-discriminatory, avoid protectionism, and foster a constructive and mutually beneficial investment environment;

(ii)                (ii) continue to assess the application of the Santiago Principles;

(iii)               (iii) continue to place emphasis on adequate operational controls, risk management, and accountability; and

(iv)              (iv) encourage capacity building among IFSWF members.”