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After months of debate in the European Union about regulation to force greater transparency on sovereign wealth funds, one Middle Eastern fund is starting to push back.
The Financial Times writes: Sultan bin Sulayem, head of Dubai World, said such moves by regulators were discriminatory and would deter him from investing. In an interview with the FT, the head of Dubai's powerful government-backed conglomerate said Europe was now exerting more pressure on SWFs than the US, which has openly resisted Arab investment in assets deemed "strategic"...."People who have money to invest, if they hear that somebody's going to discriminate against them, they wouldn't go [there]," he said.Lawmakers in Europe and the U.S. have become increasingly concerned about the financial heft sovereign wealth funds have been bringing into the West as they are increasingly bailing out financial services companies stung by the credit crunch and write-downs. Last week members of the U.S. Senate Banking Committee took a hard look at recent foreign investments in U.S. financial firms, expressing concerns that they were exempt from any government approval requirements. The Deal's Bill McConnell writes: To better oversee such investments, which were made by sovereign wealth funds of foreign governments, the lawmakers said they may press for new legislation expanding federal regulators' authority over ostensibly passive minority investments....Lawmakers' chief worry is that governments will use sovereign wealth investments to pursue political goals in addition to investment returns and that those goals might run counter to U.S interests. The U.S. is the largest recipient of foreign investment. And, since the credit crunch began in July, $39 billion -- nearly two-thirds of the equity raised to shore up financial companies here -- has been supplied by sovereign funds. Globally, the amount of money sovereign funds manage is expected to increase from roughly $3 trillion today to $12 trillion by 2012. Discussion of sovereign wealth funds will be the subject of a panel discussion at The Deal's Fifth Annual Private Capital Symposium on May 14, with Thomas Karol, president and CEO, The Sovereign Investment Council, speaking about the role of these investors. - George White See FT story See story on EC regulation of SWFs on TheDeal.com See SWF regulation story on TheDeal.com See more on the Private Capital Symposium CategoriesCommentsPrivate capital video
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