2014 Report on Public Fund Investment Policies

Abstract

Assets under management by public funds, including sovereign wealth funds and sovereign pension funds, continues to grow at a strong pace. As funds grow larger and new sovereign funds come into the market, the identification of suitable investments in an increasingly crowded marketplace become correspondingly more difficult. The universe of potential investments is narrowed by a trust deficit between many sovereign funds and the regulators in countries in which these funds invest; this trust deficit can result in higher regulatory costs that price public funds out of the market, or can create unacceptably high regulatory risks that deter funds from considering certain investments. Because transparency can help foster trust, this report seeks to remedy the trust deficit by suggesting a disclosure framework for public fund investment policies that are most relevant to recipient country regulators. The report then reviews selected policies, as available, for the 25 largest sovereign wealth funds in the world, as listed by the Sovereign Wealth Institute, and the 26 largest sovereign pension funds, as listed in the Pension & Investments/Towers Watson 300 Ranking. The report will be updated annually, and comments are welcome.