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Sovereign Wealth Funds: Aspects of Governance Structures and Investment Management

Author

Listed:
  • Abdullah Al-Hassan
  • Mr. Michael G. Papaioannou
  • Martin Skancke
  • Cheng Chih Sung

Abstract

This paper presents in a systematic (normative) manner the salient features of a SWF‘s governance structure, in relation to its objectives and investment management that can ensure its efficient operation and enhance its financial performance. In this context, it distinguishes among the various governing bodies and analyzes key aspects of the investment policy and setting of the risk tolerance level in order to ensure consistent risk-bearing capacity and greater accountability. Further, it discusses the important role of SWFs in macroeconomic management and the need for close coordination with other macroeconomic and financial policies as well as their role in global financial stability.

Suggested Citation

  • Abdullah Al-Hassan & Mr. Michael G. Papaioannou & Martin Skancke & Cheng Chih Sung, 2013. "Sovereign Wealth Funds: Aspects of Governance Structures and Investment Management," IMF Working Papers 2013/231, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/231
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    References listed on IDEAS

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    1. Aaron Howard Clifford Brown & Mr. Michael G. Papaioannou & Iva Petrova, 2010. "Macrofinancial Linkages of the Strategic Asset Allocation of Commodity-Based Sovereign Wealth Funds," IMF Working Papers 2010/009, International Monetary Fund.
    2. Mr. Michael G. Papaioannou & Mr. Joonkyu Park & Jukka Pihlman & Han van der Hoorn, 2013. "Procyclical Behavior of Institutional Investors During the Recent Financial Crisis: Causes, Impacts, and Challenges," IMF Working Papers 2013/193, International Monetary Fund.
    3. Jukka Pihlman & Han van der Hoorn, 2010. "Procyclicality in Central Bank Reserve Management: Evidence from the Crisis," IMF Working Papers 2010/150, International Monetary Fund.
    4. Iva Petrova & Jukka Pihlman & Mr. Peter J Kunzel & Miss Yinqiu Lu, 2011. "Investment Objectives of Sovereign Wealth Funds: A Shifting Paradigm," IMF Working Papers 2011/019, International Monetary Fund.
    5. Mr. Christian B. Mulder & Mr. Amadou N Sy & Miss Yinqiu Lu & Mr. Udaibir S Das, 2009. "Setting Up a Sovereign Wealth Fund: Some Policy and Operational Considerations," IMF Working Papers 2009/179, International Monetary Fund.
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    Cited by:

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    2. Amar, J. & Lecourt, C. & Carpantier, J.F., 2022. "GCC Sovereign Wealth Funds: Why do they take control?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 77(C).
    3. Ciarlone, Alessio & Miceli, Valeria, 2016. "Escaping financial crises? Macro evidence from sovereign wealth funds' investment behaviour," Emerging Markets Review, Elsevier, vol. 27(C), pages 169-196.
    4. Bizer, Kilian & Erlei, Alexander, 2018. "Ein intertemporaler Klimaschutzfonds zur Gebäudesanierung," University of Göttingen Working Papers in Economics 342, University of Goettingen, Department of Economics.
    5. Mehmet AKYOL & Barýþ YILDIZ, 2017. "Impact of size of the National Asset Funds on Economic Development: Panel Data Analysis on Select Nations," Journal of Economics Library, KSP Journals, vol. 4(2), pages 194-205, June.
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    7. Corneo Giacomo, 2018. "Ein Staatsfonds, der eine soziale Dividende finanziert," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 19(2), pages 94-109, July.
    8. Bahoo, Salman & Alon, Ilan & Paltrinieri, Andrea, 2020. "Sovereign wealth funds: Past, present and future," International Review of Financial Analysis, Elsevier, vol. 67(C).
    9. Corneo, Giacomo, 2015. "Inequality, Public Wealth, and the Federal Shareholder," CEPR Discussion Papers 10920, C.E.P.R. Discussion Papers.
    10. Larissa Nawo & Désiré Avom & Kyle McNabb & Luc Nembot, 2019. "Unofficial sovereign wealth funds and duration in power in Africa," WIDER Working Paper Series wp-2019-57, World Institute for Development Economic Research (UNU-WIDER).
    11. Ms. Xin C Xu & Ahmed El-Ashram & Judith Gold, 2015. "Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs," IMF Working Papers 2015/093, International Monetary Fund.
    12. Gangi, Francesco & Meles, Antonio & Mustilli, Mario & Graziano, Domenico & Varrone, Nicola, 2019. "Do investment determinants and effects vary across sovereign wealth fund categories? A firm-level analysis," Emerging Markets Review, Elsevier, vol. 38(C), pages 438-457.
    13. Olusegun Felix Ayadi & Ladelle M. Hyman & Johnnie Williams & Bettye Desselle, 2018. "How Effective Is Resource Stabilization Fund in a Mono-product Economy?," Global Business Review, International Management Institute, vol. 19(4), pages 842-858, August.
    14. Ali Murad Syed, 2017. "Environment, social, and governance (ESG) criteria and preference of managers," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1340820-134, January.
    15. Hanan Naser, 2016. "The Role of the Gulf Cooperation Council's Sovereign Wealth Funds in the New Era of Oil," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1657-1664.
    16. Yves Jégourel, 2015. "Sovereign Stabilization Funds and the End of the Commodities Super-cycle: What are the Challenges?," Policy notes & Policy briefs 1523, Policy Center for the New South.
    17. Aitzhanova, Aktoty & Iskaliyeva, Anastassiya & Krishnaswamy, Venkataraman & Makauskas, Dmitry & Razavi, Hossein & Sartip, Ahmad Reza & Urazaliyeva, Aida, 2015. "A practical approach to oil wealth management: Application to the case of Kazakhstan," Energy Economics, Elsevier, vol. 47(C), pages 178-188.
    18. International Monetary Fund, 2014. "Islamic Republic of Iran: Selected Issues," IMF Staff Country Reports 2014/094, International Monetary Fund.
    19. Aris Wahyu Raharjo, 2022. "Evolving Sovereign Wealth Fund under Infrastructure Funding Scarcity: A Literature Study ," GATR Journals jber222, Global Academy of Training and Research (GATR) Enterprise.
    20. Csoma, Róbert, 2015. "Appreciation of the Role of Sovereign Wealth Funds in the Global Economy," Public Finance Quarterly, Corvinus University of Budapest, vol. 60(2), pages 270-287.
    21. World Bank, 2020. "Uganda Oil Revenue Management," World Bank Publications - Reports 33899, The World Bank Group.

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