|
Davos: The leaders of some of the world's biggest and oldest sovereign funds were very cool yesterday to American-sourced suggestions that their investment activities needed any sort of regulation or a voluntary code of conduct.
During a vigorously argued session at the World Economic Forum, the funds all pointed to their decades of experience during which they have followed investment strategies which followed constructive policies based on strictly commercial principles.
The funds have attracted substantial attention recently, but this has mainly been due to more politically strategic investments made by some government-owned companies. The funds were anxious to distinguish their investment strategies from comparison with any such activity.
"The Saudi funds are very transparent. We all want this. We have had no difficulties and we are totally compliant with all stock exchange rules. If they do need improvement, we are happy to follow any new rules," said Mohammad Al Jasser, Vice-Governor of the Saudi Arabian Monetary Agency.
Bader Al Sa'ad, Managing Director of the Kuwait Investment Authority, said the KIA has been a shareholder in Daimler Benz since 1961, and BP since 1986.
"In 55 years we have not made a political investment. We are totally commercial, and our style is that we are a passive investor and we are not active in seeking to change the strategy of any company we invest in," he said.
Norway has been following similar policies for many years, said Kristin Halvosen, Norway's Minister of Finance. "The central bank manages the fund without political direction, and we limit ourselves to a maximum position in any company of five per cent," she said.
However, Robert Kimmett, US Deputy Secretary of the Treasury, argued that codes of behaviour were needed, and he said that at G8 a few months ago the US government asked the IMF to initiate multilateral talks on best practice, and the OECD to define a set of standards.
The response to the desire for a code from the Gulf funds was very clear.
"We have not had any case of political investment," said Al Sa'ad, "yet we are being asked to agree to regulation. I point you to what happened in another sector of the financial industry, when the activities of the hedge funds raised all sorts of questions, but they successfully argued that regulation would harm the market. So why are we being targeted when we follow a totally different and more positive investment strategy?"
|
