SWITZERLAND - Delegates at the World Economic Forum (WEF) in Davos have passed judgement on sovereign wealth funds (SWFs), broadly supporting the financial vehicles but calling for regulation to stop potential abuses.
They pointed to the role of SWFs in the post-sub-prime bailouts of several large financial institutions as evidence of responsible investing and said the influence of SWFs in financial terms was equal to that of large public pension funds.
Stephen A. Schwarzman, chairman and CEO of Blackstone Group, USA, said: "[SWFs] are among the most professional investors in the world. In our experience, there is virtually no difference between going to a sovereign fund [for investment capital] and going to a state pension fund in the US."
Delegates said there was a disconnect between the public fears and actual SWF activities. They said by bringing a large pool of stable, long-term capital to the table, SWFs had exerted a calming effect on volatility.
The panel also predicted that at current growth rates and based on present trends in oil-prices, SWFs could reach US$15trn within the next five years.
Robert Kimmitt, US deputy secretary of the Treasury, said G7 nation leaders and the International Monetary Fund (IMF) needed to co-operate to put in place an effective code of practise or regulatory framework that guaranteed a freedom from political manipulation from all parties. Drafts of the guidelines should be ready by Autumn.
In December, Gail Cook-Bennett, chair of the Canada Pension Plan Investment Board (CPPIB), raised concerns that pension schemes could be covered by future legislation relating to sovereign wealth funds (SWF), which could restrict certain investments in their countries.
She said CPPIB did not have any off the major characteristics which caused fear in the context of the SWFs and it should therefore not fall under the same legislation.
Industry experts are calling on the government to act quickly on new pensions dashboard legislation. The DWP is looking at how to do it amid Brexit constraints, writes Kim Kaveh.
An interactive and hands-free technology that allows savers to track how much they have invested into their retirement pots has been launched by Smart Pension.
The Lighthouse Pensions Trust has recorded an 84% surge in the number of employers signed up to its auto-enrolment (AE) provision.
Melrose Industries's UK defined benefit (DB) schemes had a £5.5m combined deficit at the end of 2016, its annual results have revealed.