Treasury, Abu Dhabi and Singapore Agree to Basic Principles for SWFs

The Treasury Dept. and two of the largest and mosty active SWFs have agreed on some basic principles for sovereign wealth investment.  The press release from Singapore is here.  The principles are essentially the those of the framework set out by Treasury Undersecretary Robert Kimmitt in his recent Foreign Affairs article "Public Footprints in Private Markets".  I think the Treasury has struck the right tone with SWFs thus far, and demonstrates that at least some SWFs are willing to act more like fiduciary investors as long as they are treated like other investors.  The key investor that must come to the table, however, is China.  While Singapore and Abu Dhabi are important SWF investors, China's SWF is the bigger concern because of China's greater economic and political importance.

Posted by: Paul Rose