Search This Blog

Wednesday, August 08, 2012

Some sovereign wealth funds need to invest in transparency

The Sovereign Wealth Fund Institute based in Las Vegas and its Linaburg-Maduell Transparency Index are new to me but worth a look now Opposition Leader Tony Abbott is suggesting the need to be wary of investment by foreign government controlled entities. None of the criteria listed below sound onerous and both the Australia Future Fund and the NZ Superannuation Fund score 10/10.

Three of five China funds, the State Administration of Foreign Exchange (4/10), China-Africa Development (CAD) Fund (4/10) and National Social Security Fund (5/10) struggle. But there are plenty worse.

On the foreign investment issue generally James Laurensecon a Senior Lecturer in Economics at The University of Queensland writing at The Conversation suggests Abbott needs to be a bit wary as well.
Point Principles of the Linaburg-Maduell Transparency Index
+1 Fund provides history including reason for creation, origins of wealth, and government ownership structure
+1 Fund provides up-to-date independently audited annual reports
+1 Fund provides ownership percentage of company holdings, and geographic locations of holdings
+1 Fund provides total portfolio market value, returns, and management compensation
+1 Fund provides guidelines in reference to ethical standards, investment policies, and enforcer of guidelines
+1 Fund provides clear strategies and objectives
+1 If applicable, the fund clearly identifies subsidiaries and contact information
+1 If applicable, the fund identifies external managers
+1 Fund manages its own web site
+1 Fund provides main office location address and contact information such as telephone and fax

No comments:

Post a Comment