Skip Navigation


Capital Markets Law Journal Advance Access originally published online on June 10, 2008
Capital Markets Law Journal 2008 3(3):247-274; doi:10.1093/cmlj/kmn011
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
3/3/247    most recent
kmn011v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Related articles in Capital Markets Law Journal
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Greene, E. F.
Right arrow Articles by Yeager, B. A.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Sovereign wealth funds—a measured assessment

Edward F. Greene and Brian A. Yeager*
* Edward F. Greene is General Counsel, and Brian A Yeager is a Counsel, of Citi Institutional Clients Group. The views expressed in this article are those of the authors and are not necessarily the views of Citi Institutional Clients Group or Citigroup Inc. The authors wish to acknowledge the assistance of Omer S Oztan, Counsel, Citi Institutional Clients Group and to thank Prof. Howell Jackson for his helpful suggestions.

The first 150 words of the full text of this article appear below.


Key points

  • As the level of foreign exchange reserves within developing countries has increased, state-controlled investing entities of these countries have shifted their investments away from lower risk and lower yielding assets such as US Treasury obligations and towards a wider class of higher risk, higher yield assets, including equity, fixed income, real estate and alternative investments (eg hedge funds and private equity).
  • These types of investments have raised concerns among policymakers in investee countries that such investments may be motivated by non-economic reasons (such as the desire to obtain control over critical infrastructure within an investee country), and therefore raise market integrity and national security issues.
  • In this article, the authors argue that any discussion of foreign investment by sovereign wealth funds (SWFs) must recognize the differences in investing objectives among different types of state-controlled investing entities, and that policy responses should focus on those foreign investments that raise . . . [Full Text of this Article]

 

   1. Introduction
 

   2. Background on state-owned investing entities
 
Central banks
Stabilization funds
Public pension funds
Government investment companies
State-owned enterprises

   3. Economic forces and trends affecting SWFs
 
Growth of SWFs
Shift in sovereign assets away from the dollar
Shift in investments to more aggressive asset categories

   4. Concerns surrounding investments by SWFs
 
Governments as investors
Governments as competitors
Capital markets enforcement against governments
Government administration of large funds

   5. Existing regulation applicable to SWF foreign investment
 
National security review of foreign investment
Regulation of foreign investment by other OECD countries
France
Japan
Germany
Disclosure requirements
Other regulation of foreign investment
Collection of information on foreign investment
Regulation of foreign investment by certain SWF-sponsor countries
China
Russia
United Arab Emirates

   6. How to address concerns raised by SWF foreign investment?
 
Principles for addressing concerns raised by SWF foreign investments
Governance standards
Transparency
Initiatives to address concerns of SWF investment
Existing guidelines
Multilateral efforts
Dispute resolution through the World Trade Organization
What if voluntary measures do not work?
Suspend voting on shares held by SWFs
Utilize existing disclosure requirements

   7. Conclusion
 

Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?

Related articles in Capital Markets Law Journal:

CMLJ Express

Capital Markets Law Journal 2008 3: 245-246. [Extract] [Full Text]