truman sovereign wealth fund
155699864
Progress on Sovereign Wealth Fund Transparency and Accountability: An Updated SWF Scoreboard
Economists and the financial world have grown increasingly excited about or alarmed by the growing influence of sovereign wealth funds (SWFs) though in recent years the public debate about their role has subsided. Politicians in countries in which the funds invested have generally welcomed the additional financial resources from abroad while expressing concern about the motivations of investors and possible threats to political, economic, and financial security. Countries in which the funds were based have wanted to know more about how their national wealth is invested. Responding to these concerns, authorities and managers responsible for SWFs in many countries have taken steps to demystify the funds. This update on the transparency and accountability of SWFs, based on the SWF scoreboard first developed by Truman in 2007, finds that many of the funds have made substantial progress in providing more information about and accountability for their activities, but that the progress has not been uniform and more is needed.
Allie Bagnall Edwin M Truman
153964863
A Blueprint for Sovereign Wealth Fund Best Practices
Management of sovereign wealth funds (SWFs) pools of government owned or government controlled financial assets has become a major focus of national and international economic and financial policy. The principal reasons are their size, lack of transparency, potential to disrupt financial markets, and the risk that political objectives might influence investment decisions. Truman provides a blueprint for SWF best practices to make them more transparent, predictable, and accountable to their own citizens and governments, citizens and governments of host countries, and participants in financial markets. The blueprint for SWF best practices is based on a scoreboard he has constructed for the current practices of 44 SWFs. The scoreboard contains 33 elements grouped in four categories: structure of the fund, governance, transparency and accountability, and behavior of the fund in managing its portfolio. The elements of the scoreboard can be incorporated into best practices without asking any fund to do something that at least one other fund does not already do. This blueprint meets the substantive principles that have been enunciated by G 7, US, and EU officials and provides a basis for evaluating the results of the International Monetary Fund sponsored dialogue on SWF best practices.
Edwin M Truman
157915597
Uneven Progress on Sovereign Wealth Fund Transparency and Accountability
Sovereign wealth funds (SWFs) government controlled funds invested in whole or in part outside their home country have grown in size, attracting political and financial attention focused on their lack of transparency. Suspicions have also grown about the motives behind their investments and their potential to disrupt countries economically, financially and politically. This Policy Brief updates and expands a prototype scoreboard rating the transparency and accountability of SWFs, which Truman established in 2007 to examine and promote the transparency and accountability of SWFs within and outside their countries. The first full scoreboard was released in April 2008, the second in September 2010, and the third in August 2013. The 60 SWFs scored in this fourth edition of the scoreboard record substantial differences: Some SWFs have high scores, others have low scores. Even funds within the same country have substantially different scores. Most important, many funds fall short of what the citizens of their countries or the international community should expect. On the other hand, the scores of many funds have improved over the past decade. The International Forum of Sovereign Wealth Funds (IFSWF) has been instrumental in promoting transparency and accountability of SWFs, and member funds generally score higher than nonmember funds. But the Forum can do more to increase its membership and improve the transparency of its members.
Sarah E Stone Edwin M Truman
159595693
Projet de meilleures pratiques pour les fonds souverains
[fre] Cet article expose un projet de meilleures pratiques pour les fonds souverains. Ce projet s'appuie sur un classement des pratiques actuelles de 44 fonds souverains. Il constitue ainsi une base pour evaluer les resultats du dialogue mene sous l'egide du FMI sur les meilleures pratiques. Classification JEL F30, G29, G34 [eng] A Blueprint for Sovereign Wealth Fund Best Practices In this article, the author presents a blueprint for sovereign wealth fund (SWF) best practices. This blueprint is based on a scoreboard for the current practices of 44 SWFs. The blueprint in turn provides a basis for evaluating the results of the IMF sponsored dialogue on SWF best practices. The author concludes this paper with a few observations on implementing SWF best practices. JEL Classification F30, G29, G34
Edwin M Truman
214453964
Are Government Owned Investment Funds Created Equal? Evidence From Sovereign Wealth Fund Real Estate Acquisitions
Sovereign Wealth Funds (SWFs) are an institutional investor class about which relatively little is known. Even though they have trillions of dollars in assets under management, their (typically) highly secretive nature renders them difficult to analyze in an academic context. We utilize transactional data from the Sovereign Wealth Fund Institute to provide the first academic analysis of SWF real estate investment activity of which we are aware. To better understand this growing investor class, we compare SWFs with their most closely related institutional group, public pension funds (PPFs) While both SWFs and PPFs are state owned investment funds, we find SWFs have lower Stone and Truman (2016) best practice scores (based on fund structure, governance, transparency and accountability, and behavior. Further, while both SWFs and PPFs show increasing levels of cross border real estate investment, SWFs are significantly more likely than PPFs to invest across international borders. We find the percentage of SWF cross border real estate investment to be substantially higher than the percentage of SWF cross border investment in public and private equity documented in other studies. Moreover, in a subsample of acquisitions in the U.S. cross border real estate investments are in locations with lower capitalization rates than domestic acquisitions for both SWFs and PPFs, and there is no discernable difference in rates across the two fund types, on average.
Peng Liu Nathan Mauck S McKay Price
144277848
Sovereign Wealth Fund Special Issue Guest Foreword from Edwin M. Truman
Edwin M Truman
153508372
An analysis of sovereign wealth and pension funds' ethical investment guidelines and their commitment thereto
Sovereign wealth and pension funds make use of investment guidelines as they invest for substantial part public money also, and thus, are subject to greater public scrutiny and expectations of environmental sustainability than privately owned funds. Thus informed, this article studies 13 sovereign wealth and pension funds selected by their appearance in the Truman scoreboard as having ethical investment guidelines addressing social and environmental issues. To analyse the ethical investment guidelines, the investigation first determines whether or not the selected funds conform to the Global Compact (RQ1) The investigation then determines if the selected funds also make use of sanctions to bring their ethical guidelines to bear (RQ2) The findings of the quantitative content analysis of the funds' ethical guidelines reveal that a quarter per cent of the funds fully adhere to the Global Compact. One of the funds ensures their ethical guidelines are put into practice by sanctions as exclusions from the fund by divestment. Finally, the authors arrive at the conclusion that only funds with published investment guidelines and applicable sanctions may influence corporate behaviour, and thus, take up their (as well as their investments' social and environmental responsibilities.
Ole Alexander Jensen Peter Seele
230530065
The Assessment of Mongolian Sovereign Funds
Mongolia is the one of the resource rich countries facing natural resource curse, relatively transparent with satisfactory resource governance. Some would argue establishing sovereign wealth fund (SWF) is beneficial those countries with natural resource curse while others against it. Mongolian government established several SWFs and namely Human Development Fund (HDFafterwards renamed as Future Heritage Fund) and Fiscal Stability Fund (FSF) but still facing to create an efficient SWF. Some scholars would agree that it is important to find causal relations between management of SWF and its efficiency to establish an efficient and beneficial SWFs. There are several ways to reveal such relations, however, most research centres are using following major methods such as Resource Governance Index (RGI) Truman scoreboard and LinaburgMaduell Transparency Index (LMTI) and Santiago Principles. This paper is examined Mongolian SWFs namely Human Development Fund (HDF) and Fiscal Stability Fund (FSF) using some of these methods.
Bayarjargal Turgenbayar
216298052
Sustaining wealth: Simulating a sovereign wealth fund for the UK's oil and gas resources, past and future
Abstract Exhaustible resources and the revenues they generate present a number of broad problems for macroeconomic management. For example, tax revenues can be large and highly volatile, and the stream of revenues is finite. An increasing number of countries now view resource funds and/or fiscal rules for resource revenues as the answer to these challenges. In this paper, we explore the consequences for the UK if past revenues arising from the depletion of subsoil assets had been channelled into a sovereign wealth fund. We show that had a decision been made to establish such a fund in 1975, this could have been substantial in size by 2018 (about GBP 354 billion) and, moreover, would have had a number of benefits such as a reduction in volatility of resource revenues flowing to the Treasury. Crucially, the fund's value would have substantially boosted the size of the government balance sheet, yielding corresponding fiscal benefits. We argue this missed opportunity is underlined further by considering the current debate about shale gas development in the UK. Notwithstanding considerable uncertainties, favourable and optimistic projections for key parameters are required for any shale based fund to match what we simulate based on past experience for conventional subsoil assets.
Giles Atkinson Kirk Hamilton
216254319
Portfolio Choice for a Resource Based Sovereign Wealth Fund: An Analysis of Cash Flows
We consider the portfolio choice of a government with a Sovereign Wealth Fund (SWF) when government revenues depend on exhaustible resources, such as oil and gas. The question is whether the SWF portfolio should underweight shares in the resource industry. Some studies have found that these share prices correlate more closely with the overall stock market than the resource price, which would seem to weaken the case for underweighting. However, equity price movements depend not only on changes in expectations of future cash flows, but also on time variation in discount factors. We analyze cash flows directly, rather than trying to disentangle these effects. We have collected cash flow data for the companies in all of the major industries of the FTSE Global All Cap index, the basis for the strategic index of the Norwegian Government Pension Fund Global. Subsequently, we look at the correlations between each industry's cash flow and the Norwegian government's cash flow from oil and gas. We find a close, statistically significant, and persistent correlation for the oil and gas industry. The correlations for other industries are small and mostly insignificant. We believe that our findings can be used to support proposals for SWFs in countries with significant petroleum revenues to underweight shares in this industry.
Knut Anton Mork Hanna Marisela Eap Magnus Eskedal Haraldsen