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Opalesque Exclusive: State Street assesses the impact of Sovereign Wealth Funds, questions transparency requests Benedicte Gravrand, Opalesque London: State Street gave a briefing on sovereign wealth funds (SWFs) at the London Stock Exchange last night and talked about their growing roles, their liability based approaches and their potential impact on global asset prices.

What exactly is a SWF? The definition of a SWF is not easy as indeed it encompasses a great variety of investment styles and objectives. Apparently, SWFs themselves are not too sure as to what qualifies them as such, said State Street Global Advisors’ managing director, John Nugée. Some would even rather not labelled as SWFs. State Street’s definition is: “SWFs are sovereign-owned asset pools that are neither traditional public pension funds nor reserve assets supporting national currencies.”

Attracting attention SWFs are attracting a lot of attention because of their size, which is estimated at $3tln, their investment style, which is more diverse than that of central banks, and their mystique. These funds raise a great number of questions as to what their impact is, their correct level of transparency and the appropriateness of their investments. They are not well understood.

And growing fast SWFs are large and growing rapidly; whereas central banks international reserves now exceed $6.5tln (......................

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