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Sovereign Wealth Funds - Concerns Attached With SWFs

Several countries are keeping their economies away from SWFs as a result of concern that some investments are diverted for political objective to obtain charge of strategically important assets. It is often observed that OPECs are already diverting large pool of funds in obtaining strategic assets and purchasing important sectors like infrastructure, telecom, energy and media across the western world. After much opposition from US Congress, Abu Dhabi's Investment Authority was required to withdraw from the ADIA Dubai Port after 9/11 terror attacks.

China Investment Corporation's $5 billion stake in Morgan Stanley and acquiring Citigroup by Abu Dhabi Investment Authority for $7.5 billion was severely criticized following your recent subprime crisis.

Not enough transparency may be an important concern for nations which can be experiencing increasing [http://forums.tagpad.com/questions/107/how-satisfied-are-you-with-the-information-provided-on-structured-settlement-buyer-sovereignfunding http://www.sovereignfunding.com] of their economies. SWFs are increasingly being criticized for inadequate disclosures regarding size and supply of funds, investment objectives in addition to their holding in equity finance funds. Within the U.S., these concerns are addressed through the Exon-Florio Amendment for the Omnibus Trade and Competitiveness Act of 1988, European chosen over avoid SWF funding. Some experts opine that this kind of fear is unwarranted when we compare how big is SWFs assets ($2 trillion) while using sized global investment funds assets ($20 trillion) and securities traded in dollars ($50 trillion).

IMG attemptedto address this concern of transparency and governance by issuing the Santiago Principles in 2007, a collection of 24 voluntary principles to make sure transparency and sound governance by sovereign wealth funds (SWFs). However, not many SWFs have been following these principles seriously.