EDHEC: SWFs and Their Implicit Liabilities
| Apr 15th, 2012 | Filed under: Alpha Strategies, Forex, Institutional Investing, Today's Post | By: cfaille |
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A new survey by EDHEC-Risk Institute lets managers of the sovereign wealth funds – and those who manage other, related institutions such as central banks or state development funds – speak for themselves about the strategies SWFs pursue. The responsive state-affiliated investment managers, mostly from Middle Eastern and East Asian vehicles, say that they believe SWFs can benefit from a liability-driven investment model, but they worry about models that are too general, inadequately customized to their needs.
Sovereign Wealth Funds (SWFs), investment funds controlled by nation states as instruments of policy, have had and continue to have an enormous impact on the financial world, with current assets under management close to $5 trillion. This has motivated a good deal of scholarly research. EDHEC-Risk Institute and Deutsche Bank jointly established a research chair for that purpose in 2009, and publications of that research chair have since adapted the asset-liability management (ALM) framework to the characteristics of SWFs.
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Author Bio:
Christopher Faille is a Jamesian pragmatist. William James has taught him, for example, that "you can say of a line that it runs east, or you can say that it runs west, and the line per se accepts both descriptions without rebelling at the inconsistency."
