Al-Hassan, Papaioannou, Skancke & Sung: Sovereign Wealth Funds: Aspects of Governance Structures and Investment Management

Another important paper from IMF researchers on sovereign wealth fund governance.  One of the aspects of most value in this analysis is the connection between governance and investment policy and the delineation of responsibilities over investment policies, as shown in the graphic below:

imf

Here is the paper’s 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.

 

Available for download here.

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