SWF lions roar in Beijing

Sovereign wealth funds will consider the implications of capital flows and the build-up of foreign exchange assets in Beijing next week at the third annual SWF international forum.

Hosted by the China Investment Corporation, the forum runs for three days from Wednesday, May 11.

The forum will begin with a consideration of the use and application of the Santiago Principles, and then the forum will hear from the first of the IFSWF’s three sub-committees.

This first group is led by Azerbaijan, and consists of Botswana, Chile, China, Kuwait, Norway, and New Zealand.

The next session on risk and investment management will hear from the forum’s second sub-committee led by Kuwait, and consisting of Alaska, Alberta, China, Korea, and New Zealand.

The forum’s case studies will focus on:

• accounting for “fat tails” in portfolio risk management
• managing currency exposures of financial and non-financial assets, and
• constructing portfolios for specific macroeconomic environments.

The global investment climate and recipient country relationships will be presented by the third sub-committee led by Australia, and consisting of Abu Dhabi, China, Mexico, Qatar, Russia, and Singapore.

Financial stability and the current state of the global macro economy is the first topic for the second day of the forum, followed by an examination of the impact of the global financial crisis on SWFs and other institutional investors, and its implications for long-term investment strategy.

Other sessions include regulatory reforms, investment regimes and the outlook for institutional investors from both the views of investors and recipients.

The final sessions focus on China:

• its economy and capital markets
• as a recipient country: opportunities and challenges, and
• overseas investment: its role in fostering sustainable global development

The first SWF forum was in Kuwait in April 2009, and the second was in Sydney, Australia, in May last year.