Oxford SWF Project

Ashby Monk

Over the past few years, I’ve been under the impression that the world’s “elites” were uniquely fascinated with SWFs. For example, in 2008 the Wall Street Journal called SWFs “…one of the hottest topics in global financial markets.” The Economist had a cover story entitled, “Invasion of the sovereign-wealth funds.” That same year, SWFs were the main focus of attention at Davos. The IMF facilitated the launch of the International Working Group on SWFs. And national governments around the world were considering new legislation to govern inward SWF investments. Basically, I’ve been of the opinion that almost everyone with even a tangential interest in global financial markets and international affairs was at least aware of SWFs’ existence.

But I was apparently wrong. According to Hill & Knowlton’s new “Sovereign Brands Survey,” many “elites” remain totally ignorant about SWFs. The survey shows that, in the UK and the US, only 36% of elites have “familiarity” with SWFs. That means that 64% of the US and UK elites surveyed were not familiar with SWFs.

Who are these elites? According to H&K, they are:

“influential members of society who are university educated, earning in excess of £50k or local market equivalent and with an active interest in national and international affairs in both politics and business.”

How is this possible? I’m trying not to blow this out of proportion, as I freely acknowledge that I live in an SWF bubble. But, honestly, how can you claim to be an “elite” without ever having heard of the China Investment Corporation or the Abu Dhabi Investment Authority (…let alone the American (!) Alaska Permanent Fund…).

Moreover, despite knowing very little about SWFs, these countries’ elites still have overwhelmingly negative attitudes about SWFs. Only 6% of UK elites and 9% of US elites view SWFs with any favorability. However, it wasn’t just the ignorant that viewed SWFs in this light. In Germany, where 74% of the elites were familiar with SWFs, only 19% viewed SWFs as a favorable source of investment.

What does all this mean? Well, on the one hand, it suggests to me that SWFs still have a lot of communications work to do in the international community. Perhaps it’s time to think about formal implementation mechanisms for the Santiago Principles? On the other hand, it seems to me that these countries’ “elites” – in particular in the UK and US – need to take more of an interest in what’s going on in global finance! After all, SWFs are arguably the fastest growing institutional investors in the world…