Investing in a Climate of Uncertainty: The Sovereign Wealth Fund Response
Posted On: Thursday, 8 September 2016

The investment implications of climate policy and low global growth will be key topics at this year’s annual meeting of the International Forum of Sovereign Wealth Funds (IFSWF).

The theme of the November meeting is Investing in a Climate of Uncertainty: The Sovereign Wealth Fund Response.

The conference will feature leading international speakers on the global economic outlook and climate policy. About 200 leaders of global sovereign wealth funds, international financial institutions, academics and sovereign wealth experts are expected to gather in Auckland, New Zealand.

Adrian Orr, Chair of IFSWF and Chief Executive of the New Zealand Superannuation Fund, said long-term investors faced global uncertainty on a number of fronts, in particular the twin challenges of a low-growth economic environment and, following the 2015 Paris Agreement, the impact of policies addressing climate change.

Economist John Lipsky will speak on the economic challenges facing investors. He had a prestigious career at the International Monetary Fund and is now a Distinguished Scholar at the Kissinger Center for Global Affairs at Johns Hopkins University’s School of Advanced International Studies, Washington, DC.

Glenn Stevens AC, from Australia, will also discuss economic issues in a member-only session. Mr Stevens steps down this month after 10 years as Governor of the Reserve Bank of Australia and has served as one of two Australian representatives on the global Financial Stability Board.

Mats Andersson, the former Chief Executive of AP4, one of Sweden’s largest pension funds, will speak on the investment implications of climate policy. He is the co-founder of the Portfolio Decarbonisation Coalition. Under his leadership, AP4 decided to benchmark its entire equity portfolio to a low-carbon index by 2020.

Bob Prince, Co-Chief Investment Officer at Bridgewater Associates in the United States, will offer a perspective on the low-interest rate, low-return investment environment, the challenges it poses to savers and holders of financial assets worldwide, and will discuss the choices available to investors.

Mr Orr said climate change and climate policies posed material risks for long-term investors, from an uncertain regulatory environment to stranded assets. The transition to a lower carbon economy would also lead to investment opportunities.

“Sovereign wealth funds may be well-placed to invest in new technologies and new market structures, areas which are important for them to explore.”

Sovereign wealth funds also faced ongoing challenges from the low-growth economic environment, with reduced capital inflows and lower investment returns. The complex economic and policy context gave rise to challenges about their purpose and governance.

“It is a great pleasure to host this high-level, international financial meeting in New Zealand. Improving collaboration and knowledge sharing runs to the core of IFSWF and I look forward to tackling some of the critical issues facing the industry when we welcome IFSWF members and the broader sovereign wealth fund community to Auckland in November.”

The meeting, hosted by the New Zealand Superannuation Fund, runs from November 8 to 11. It includes member-only technical workshops, the Forum’s annual meeting and open conference sessions on November 9 and 10.

Technical workshops will cover performance measurement and benchmarking, insourcing investment activity, investing in infrastructure, managing sovereign development funds and a case study on tobacco divestment.

The conference sessions will also feature the purpose and practice of sovereign wealth funds in a changing world, speakers on the New Zealand economy and investment environment, and a session on empowering indigenous peoples.

Member participants will include the leaders from some of the largest sovereign wealth funds, including the China Investment Corporation, the Government of Singapore Investment Corporation and the Abu Dhabi Investment Authority, who are each also IFSWF board members; new members such as the Moroccan Fund for Tourism Development and prospective members including the Senegal Sovereign Fund for Strategic Investments. Observers include representatives from multilateral institutions such as the World Bank and Hedge Funds Standards Board, as well as academics and private sector financial organisations.

 

Background on IFSWF (www.ifswf.org)

The International Forum of Sovereign Wealth Funds is the leading global network of sovereign wealth funds, representing funds from 30 countries. More than US$4 trillion is under management by members, about two thirds of sovereign wealth funds globally.

Established under the auspices of the International Monetary Fund, its purpose is to promote the Santiago Principles, on transparency, accountability and good governance, to share knowledge, research, benchmark performance and to promote collaboration.

For further information, please contact:

International Forum of Sovereign Wealth Funds: Duncan Bonfield, Chief Executive + 44 7990 777 440, [email protected]

New Zealand Superannuation Fund Contact: Catherine Etheredge + 64 (0) 274 777 501, [email protected]