Sovereign Wealth Funds: The Good Guy Investment Actors?

UNSW Law Research Paper No. 2014-24

CLMR Research Paper No. 14-2

13 Pages Posted: 18 May 2014

See all articles by George Gilligan

George Gilligan

University of Melbourne - Centre for Corporate Law

Justin O’Brien

Harvard University - Edmond J. Safra Center for Ethics; University of New South Wales (UNSW)

Megan Bowman

King's College London – The Dickson Poon School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: May 16, 2014

Abstract

Sovereign wealth funds (SWFs) have been portrayed in some quarters as potential bad guys in global financial markets due to their supposed political as opposed to commercial intentions and influence. However, two key international developments during and since the 2008/2009 Global Financial Crisis have prompted some abatement in the hostility and mistrust displayed towards SWFs. First, SWFs provide substantial and growing sources of much-needed liquidity in global capital markets. Secondly, the Generally Agreed Principles and Practices – GAPP (The Santiago Principles) were created in 2008, which are a multilateral initiative to directly address governance issues associated with SWFs. Thus, SWFs have become a more accepted element of global financial markets and more is now known about how they operate and where their investment priorities tend to lie. However, there is still much to learn about the important roles that SWFs are likely to play in global markets, particularly how they may contribute to the public good. Accordingly, this article considers the good guy potential of SWFs by elucidating how SWFs may not only be a facilitative economic mechanism but also an important tool for societal benefit. In so doing, this article focuses on the role that they might play in domestic investment in order to stimulate the growth of social capital and nation building in their home country, as well as progress made by SWFs themselves to improving their standards and processes of governance.

Keywords: Sovereign Wealth Funds, Global Financial Crisis, GAPP, social benefit, social capital, nation building

Suggested Citation

Gilligan, George and O’Brien, Justin and Bowman, Megan, Sovereign Wealth Funds: The Good Guy Investment Actors? (May 16, 2014). UNSW Law Research Paper No. 2014-24; CLMR Research Paper No. 14-2 . Available at SSRN: https://ssrn.com/abstract=2438148

George Gilligan (Contact Author)

University of Melbourne - Centre for Corporate Law ( email )

185 Pelham Street, Carlton, Building 106
Victoria 3010
Australia
+61 3 8344 1079 (Phone)

HOME PAGE: http://www.law-cclsr@unimelb.edu.au

Justin O’Brien

Harvard University - Edmond J. Safra Center for Ethics ( email )

124 Mount Auburn Street
Suite 520N
Cambridge, MA 02138
United States

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Megan Bowman

King's College London – The Dickson Poon School of Law ( email )

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

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