SWFs meet fails to reach common set of guidelines

Sovereign wealth funds (SWFs), that control an estimated $3 trillion (Dh11trn) in assets and huddled behind closed doors in Singapore yesterday, failed to reach a common set of rules.

The funds are meeting to thrash out guidelines aimed at allaying Western fears their investments are politically motivated.

The International Monetary Fund's 23-country international working group of SWFs hopes to come out with a voluntary set of generally accepted principles and practices by October.

Delegates, which included representatives from China, oil-rich Gulf nations and Europe, were mostly tightlipped about progress in the tapestry-lined colonial meeting rooms of the Intercontinental Hotel. "This is just one leg of a long journey, but the atmosphere is very good," said Martin Skancke, director-general at Norway's Ministry of Finance, which oversees the world's second largest sovereign fund.

Skancke said ahead of the meeting he does not expect a common set of rules for all SWFs to emerge from the talks. "These different funds are very different in terms of their institutional setup, in terms of the political environment and in terms of their investment strategy," he said.

"There is not a one size fits all," he added.

SWFs have gained prominence in recent months following their multi-billion-dollar bailouts of Western banks such as Citigroup and UBS. The huge investments by SWFs, which tend to be secretive like private equity and hedge funds, have raised concerns in the West that strategic assets such as banks and energy firms may end up in the hands of foreign governments.