FRANCE - The Caisse des Dépôts et Consignations (CDC), the institution the Sarkozy government plans to transform into a French sovereign wealth fund, has expressed doubts about its own size and ability to compete on a global scale.
The move marked a policy shift for the Sarkozy government, which as recently as early summer had criticised SWFs.
Speaking to Global Pensions, Frederic Levert, a spokesperson for the Ä405.5bn (US$582.4bn) CDC, said the situation was more complex than previously suggested and a straight conversion from a pension fund to a pension fund-backed SWF was not possible.
"[President] Sarkozy said the CDC should play a role sort of like a sovereign wealth fund," he said. "There are things which align the SWFs and the CDC, such as the long term investment outlook, but there are differences between them. We do not have any oil wealth, for example, so there is no real budgetary excess like the Gulf States or the Norwegian government fund.
"The CDC should play a role to improve the capital of French or European companies and to be a stable investor in capital. The means to do this was established in Article 41 of the recently passed Law for the Modernisation of the Economy (LME)."
Article 41 of the LME relates to the modernisation of the governance structures of the CDC, chief among its proposals was the creation of an investment oversight committee to scrutinise significant investments.
Augustin de Romanet, CEO of the CDC, said the organisation's capital was "limited" and therefore the CDC would likely be "obliged to concentrate its efforts on companies and areas which are strategically important for France".
He added: "As a long term investor, we have asset-liability characteristics which allow us to make investments with a higher risk-return profile, and to invest in assets for longer durations than the likes of hedge funds or investment banks."
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