SWF survey shows image shortfall

This survey polled 150 groups of “elites” in seven markets worldwide, including Egypt, Brazil, China, India, Germany, the US and the UK.

“Emerging markets seem to be most interested in getting investment from the SWFs but they’re also the ones that are most concerned about the reasons for those investments,” noted Tatt Chen, Vice President at PSB in Asia.

The findings suggest that SWFs have quite an image challenge to overcome. Chinese respondents were some of the least receptive to other country’s involvement, with 97% saying they would be comparatively more concerned over major SWF investment versus other types.

However, China’s elites also rated SWFs in general far better than private equity, with 75% of the poll stating that SWFs were somewhat to very trustworthy, while only 50% found private equity equally trustworthy.

“You’re now seeing more savvy and more demanding elites in terms of what money should come into China now,” Chen told AVCJ. “A decade ago, most were happy just to see money coming in. Now, being in the driver’s seat, China is more discriminating about what money is coming in.”

China’s own SWFs, meanwhile, were viewed with most mistrust by respondents elsewhere, with 84% of the poll regarding them as somewhat or mostly motivated by political objectives – only Russia scored higher, with 87%. Singapore’s SWFs were more trustworthy, with only 50% concerned about their political agendas.

Country reputation will be a strong factor in future SWF investment strategies, Chen emphasized, with the whole class becoming an increasingly significant presence in FDI worldwide. “Funds under management of the SWF category is expected to grow by 15% per year,” he stressed. “Competition among the SWF category is expected to intensify. Each of these SWFs is trying to showcase themselves and get a competitive advantage. The ones that have the most trust and the most chance to get a positive public reaction might well come out as winners.”

Ho Ching, the CEO of SWF Temasek, has personally pushed the issue of transparency and has been a propenent of increased reporting of fund activitres among SWFs. 

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• Topics
• Funds
• LPs
• Regulation
• Temasek Holdings
• GIC Private