IFSWF Santiago Principles

Auckland Communiqué

The International Forum of Sovereign Wealth Funds (IFSWF) held its eighth annual meeting in Auckland, New Zealand on 8-11 November 2016.

The meeting was hosted by the Guardians of New Zealand Superannuation. Senior officials from 25 IFSWF members attended the Auckland meeting. Also present were representatives of the Forum’s official observer institutions, including the European Commission, the International Monetary Fund and the World Bank, officials from the New Zealand Government and from several private-sector institutions. The Forum also welcomed representatives of non-member state-owned investors from around the globe.

On the first day of the meeting, IFSWF members and invited experts took part in a series of technical workshops and discussed a range of issues including models for sovereign development funds, performance measurements and benchmarks, infrastructure, divestment and insourcing investment activity.

At the annual meeting the IFSWF agreed to explore the investment implications of the global commitment to curb greenhouse gas emissions for sovereign wealth funds. The Forum will convene a working group to introduce members to the major questions raised by this new and important challenge. Over the next year they will identify the most relevant and pressing challenges and opportunities with a view to establishing a long-term programme on this subject. The working group will report back at the 2017 meeting, which will be held in Astana, Kazakhstan on 5-8 September 2017.

The theme for the open sessions of this year’s meeting was Investing in a Climate of Uncertainty. This theme explored the opportunities and challenges surrounding the new-found imperative to curb greenhouse gas emissions, as well as how sovereign wealth funds can best navigate the current low-yield, low-growth and uncertain investment environment.

In Auckland, the IFSWF also published a new volume of case studies describing members’ experiences in applying the Santiago Principles. These cases highlight the benefits bestowed by the transparency, accountability and investment frameworks recommended by the Principles. Full self-assessments by 28 members will be published online in early 2017.

Adrian Orr, IFSWF Chair and CEO of the New Zealand Superannuation Fund, commented, “In the eight years since the Santiago Principles were written, our membership has expanded and become more diverse. As such, our understanding of the real-world implications of applying the Santiago Principles at individual organisations has had to evolve. “Each member starts the process of implementing the Principles from a different place, depending on their history and legacy structures and what their evolution looks like may not be the same for every member. But, the aim is to establish the best possible governance, accountability, and operational methods.”

Commenting of the strengthening of the IFSWF Secretariat in London in 2016, CEO Duncan Bonfield said, “The Board and the membership of IFSWF are committed to playing a leading role in furthering the case for long-term investment. To do this they have upgraded the capacity and capabilities of the Secretariat team in London, so that the IFSWF can be yet more effective on behalf of members.”

A full agenda of the annual meeting and the keynote addresses are available to download from the IFSWF’s website www.ifswf.org.

About the International Forum of Sovereign Wealth Funds

The International Forum of Sovereign Wealth Funds (IFSWF) is a voluntary organisation of global sovereign wealth funds committed to working together and strengthening the community through dialogue, research and self-assessment.

The IFSWF was formed in 2009 by a group of 23 leading state-owned international investors from around the world. The Forum’s initial aim was to maintain an open and stable investment climate by setting and adhering to a set of Generally Accepted Principles and Practices, known as the Santiago Principles, for sovereign wealth funds’ institutional governance and risk-management frameworks.

Today, helping members implement the Santiago Principles remains the foundation of the IFSWF’s activity. But the Forum now represents a group of more than 30 sovereign wealth funds from all corners of the globe, with a variety of mandates and at various stages in their development. As a result, the Forum’s focus has evolved. In addition to encouraging ongoing commitment to the Santiago Principles, the Forum also undertakes research, facilitates peer assistance exercises and holds workshops and seminars to help members enhance their existing investment capabilities. The IFSWF also undertakes to represent its members to the global financial and policy communities. For more information, visit www.ifswf.org.

About the New Zealand Superannuation Fund

The New Zealand Superannuation Fund is a NZ$30 billion sovereign wealth fund established by the New Zealand Government to partially pre-fund the future cost of universal pension payments. A long-term, growth-oriented investor, the Fund has returned 9.7 per cent p.a. since inception in 2003. The Fund is managed by the Guardians of New Zealand Superannuation, a Crown entity. For more information, visit www.nzsuperfund.co.nz.

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