Morgan Stanley Barclays
publication of exact measures used to set performance is central to the argument that sudden capital outflows must be managed to prevent or at the least ameliorate wider contagion. 29
SUB-PRIME LOSSES (US $ BILLIONS) 31.7
SOVEREIGN WEALTH FUND INJECTION (US $ BILLIONS)
11 including 4.4 (Temasek, Singapore) 2.0 (Korea Investment Fund) 2.0 (Kuwaiti Investment Fund) 0.3 (New Jersey Division of Investment) 20.0 including: 7.5 (Abu Dhabi Investment Authority) 6.8 (Singapore Investment Corporation) 3.0 (Kuwait Investment Authority) 0.4 (New Jersey Division of Investment) 9.7 (Singapore Investment Corporation) 5 (China Investment Corporation) 2.98 (China Development Bank)
Table 1: Sovereign Wealth Fund Investments
There is no evidence, however, that this risk is anything more than hypothetical. Investment bankers in London and New York speak positively of their experience with executives from the major funds. One research director for a major investment bank suggested that the funds have become a magnet for rising stars within the asset management firmament.30 Moreover, the larger funds emphasise the quality of external advice and internal controls. The leading Singaporean fund, Temasek Holdings, recently sent its executive director to a congressional hearing to impress upon US lawmakers how the fund is insulated from political influence. Temasek, noted Simon Israel, has an eight-member majority-independent board structure, supplemented by an international advisory panel that includes William McDonough (Vice Chairman of Merrill Lynch) and David Bonderman (founding partner of Texas Pacific Group).31 Similarly, the ranking civil servant responsible for the oversight of the Norwegian Government Pension Fund – Global, Europe’s largest Sovereign Wealth Fund, emphasised to Congress its own well-developed controls and the need for regulatory restraint. 32
Lowry, above n 23.
Interview, London, 19 July 2008.
31 Evidence to House Committee on Financial Services, United States Congress, Washington DC, 5 March 2008 (S Israel).
32 Evidence to House Committee on Financial Services, United States Congress, Washington DC, 5 March 2008 (M Skancke). The fund details all of its investments and conforms to an ethical code of practice. The precise governance rules of the Norwegian Government Pension Fund – Global are published online: < http://www.norges-bank.no/Pages/Article____68360.aspx> at 17 March 2008.