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Testing themselves

Sovereign wealth funds take a look in the mirror

A group of 29 sovereign wealth funds have simultaneously published their own assessments of how they apply a set of good practice principles to their funds.

Members of the International Forum of Sovereign Wealth Funds published information on how they apply the Santiago Principles, which cover good practice in governance, investment processes and risk management for sovereign wealth funds.

The forum asks its members to produce a self-assessment against the Santiago Principles every two years. In 2014, 15 IFSWF members published these documents.

“This is an important milestone for sovereign wealth fund transparency and disclosure,” said Duncan Bonfield, CEO of the IFSWF secretariat, in a news release announcing the move. “Our members often concentrate on communicating with their local audiences, in their own language. These self-assessments, in English, provide the international financial community with valuable insight into our members' policies and structures.”

The publication coincides with the release of a study highlighting the major trends from the documents. “Trends in Transparency: Santiago Principle Self-Assessments 2016” was authored by a team from SovereigNET at the Fletcher School, Tufts University.

Among the trends is a finding that while there are common structures and approaches to applying the Santiago Principles, no single model emerges from the reports. Instead, the study found that self-assessments reflect local traditions.

IFSWF members represent about 70% of all assets managed by sovereign wealth funds. The self-assessments are available on the IFSWF website.

This article originally appeared in the March 6, 2017 print issue as, "Sovereign wealth funds take a look in the mirror".