Sovereign Funds’ Influence to Grow Via Foreign Direct Investment

According to the UN’s2012 World Investment Report, sovereign funds are increasingly important contributors to foreign direct investment (FDI), allocating roughly $125 billion today with a trend-line that suggests this will increase dramatically in the years ahead. I think this is a pretty big deal. And to explain why, let’s start with some FDI 101.

国际货币基金组织defines“外国直接投资”作为国际投资类别，其中存在“a resident entity in one economy (direct investor) with the objective of establishing a lasting interest in an enterprise resident in an economy other than that of the investor (direct investment enterprise).”重要的是，“持久兴趣”是指直接投资者对直接投资企业管理的一定影响力的长期关系。因此，外国直接投资与公共股票的资金标准投资组合投资完全不同。外国直接投资类似于当地民营企业的“外国直接影响”。一般而言，一旦股权地位通过10％，我们就会将投资视为“外国直接投资”。（如果您仍然不确定拥有SWF影响管理决策的东西，请看看“有趣”的Glencore和Xstrata正在拥有Qatar Investment Authority.)

Anyway, here’s a useful blurb from the UNCTAD report describing the FDI that SWFs are making:

“FDI by SWFs is concentrated on specific projects in a limited number of industries, finance, real estate and construction, and natural resources. In part, this reflects the strategic aims of the relatively few SWFs active in FDI, such as Temasek (Singapore), China Investment Corporation, the Qatar Investment Authority and Mubadala (United Arab Emirates).”

So that’s the scene. Now, why do I think this is a big deal? Two reasons:

1)这正是of investing that I (personally) like; investors seeking to add value to portfolio companies through active engagement (see AIMCo as an exampleof what I'm talking about); and

2) This is precisely the kind of investing that Western policymakers freaked out about in 2008, leading to the (seemingly dormant)国际论坛and the (well intentioned but flawed) Santiago Principles.

In short, the trend towards more FDI by SWFs will inevitably raise some eyebrows among policymakers in target countries. But that’s not to say that SWF FDI should be avoided or even discouraged. In fact, this type of investment could serve as a catalyst for economic growth by building required infrastructure or developing agriculture. And UNCTAD has some interesting perspectives on how this can be achieved:

“As SWFs become more active in direct investments in infrastructure, agriculture or other industries vital to the strategic interests of host countries, controlling stakes in investment projects may not always be imperative. Where such stakes are needed to bring the required financial resources to an investment project, SWFs may have options to work in partnership with host-country governments, development finance institutions or other private sector investors that can bring technical and managerial competencies to the project – acting, to some extent, as management intermediaries.

“SWFS可以与他人独立或合作，他们自己的一般伙伴关系致力于特定的投资主题 - 例如，基础设施，可再生能源或自然资源。2010年，卡塔尔举行的卡塔尔投资机构投资权威，为印度尼西亚的基础设施和自然资源设立了10亿美元的印尼基金......“

“Where SWFs do take on the direct ownership and management of projects, investments could focus on sectors that are particularly beneficial for inclusive and sustainable development, including the sectors mentioned above – agriculture, infrastructure and the green economy – while adhering to principles of responsible investment, such as the Principles for Responsible Agricultural Investment, which protect the rights of smallholders and local stakeholders.”

In short, UNCTAD believes that SWFs should continue to make foreign direct investments. However, UNCTAD also believes that these sorts of investments should be done in ‘friendly’ and ‘unthreatening’ ways, such as setting up special purpose investment vehicles that ensure de-politicization of the investment process (i.e., a local GP) or investing in industries that have substantial positive impacts on local communities (e.g., infrastructure).

理论上很好。但它会工作吗？SWFS会注意吗？我不知道。无论如何，观看政策制定者对外国主权资金的反应，影响当地公司未来几年的行动，将相当有趣......