Sovereign Wealth Funds
Traditional asset managers and alternatives specialists are eagerly contending for an outsize share of a rapidly growing industry.
June 2013 | by John Olivier, Chief Investment Officer
Sovereign Wealth Funds are estimated to control foreign assets of over three trillion dollars, and rising. While the increasing size and public profile of funds in recent years has attracted extensive publicity, the work of the IMF's International Working Group of Sovereign Wealth Funds and subsequently the International Forum of Sovereign Wealth Funds—including laying down generally accepted principles and practices for SWFs known as the Santiago Principles—has started to deliver greater transparency and a recognition of the need for more overt accountability and governance.
We develop strong relationships with our sovereign clients and appreciate the importance of understanding their specific objectives. In particular we understand that each sovereign wealth fund is unique and needs to be served in a way appropriate to its objectives and distinct cultural and jurisdictional features.
Focusing Capital on the Long Term
Wealth management paradigms are shifting as transparency developments take hold worldwide. Harmonized tax laws, international databases and other information-sharing arrangements are facilitating broader, more aggressive enforcement. Flat tax rates and national amnesty programs are growing more common. Under “know your client” rules, even private institutions are collecting investor information for regulators. We have a uniquely holistic approach to managing and protecting private wealth. Our professionals are recognized worldwide for proven abilities in developing sophisticated and tailored solutions for corporate groups, trust companies, high-net worth families, private banks and other major financial institutions.
Given that SWFs are likely to be under increasing levels of scrutiny, it is important that each SWF has a clear engagement policy that enables it to communicate its objectives, deal with potential conflicts of interest and ensure ‘public buy-in' to its mission. The Santiago Principles assist in this regard, but there should also be in place detailed policies relating to the publication of data regarding its holdings and activities.
Although a substantial portion of the practice involves the creation of planning arrangements that minimize or eliminate estate, gift, generation-skipping transfer, and/or income taxes, the Wealth Management Practice is sharply focused on clients' needs and strategies that address family and financial matters as well as tax concerns. We have a substantial group of clients who reside outside the United States. We also have wealth management lawyers in our London office who advise on United Kingdom estate and trust issues, as well as multinational planning matters.