IFSWF Santiago Principles

Oslo Statement of the International Forum of Sovereign Wealth Funds

Oslo Statement of the International Forum of Sovereign Wealth Funds

The International Forum of Sovereign Wealth Funds (IFSWF or Forum) met for its fifth annual meeting in Oslo, Norway on October 2-3, 2013. Hosted by the Ministry of Finance in Norway, the Forum advanced on the commitments made in Mexico in September 2012.

The Forum reviewed progress on the application of the Santiago Principles, agreed on internal governance arrangements and discussed a range of issues, including:

(i) selecting and monitoring external managers;

(ii) latest trends in investment management;

(iii) asset allocation in a lower-return world; and

(iv) corporate governance and exercise of ownership rights.

It issued the following release ("Oslo Communiqué").

1. Application of the Santiago Principles We discussed the results of the 2013 Report on members’ experiences of the application of the Santiago Principles, and compared with the findings of the 2011 Report. The key findings are: There is a high degree of observance of the Generally Accepted Principles and Practices. (GAPPs) number 1-5 addressing the legal framework, objectives and coordination with macroeconomic policies; Institutional framework and governance structure are largely consistent with GAPPs 6-9, and accountability frameworks have improved (GAPPs 10-17); and More members are developing their investment and risk management framework to contribute to financial stability and meet generally agreed asset management practice (GAPPs 18-24). Members agreed that it is very important to provide more case studies, both on how Sovereign Wealth Funds implement the Santiago Principles, and how they institutionalize the activities in practice. Members agreed to put emphasis on development of a set of case studies, which will form part of the 2014 work program.

2. Investment Risk Management and External Managers

We considered three member-provided case studies focusing on: Selecting and monitoring of external fund managers Latest trends in investment management; and Asset allocation in a lower-return world. A report on members’ experience in the application of the Santiago Principles and the case studies will be made available on www.ifswf.org.

IFSWF Internal Governance Arrangements

We adopted the IFSWF Charter and Constitution that addresses the internal governance arrangements of the Forum. In this regard, Members agreed, inter-alia, to establish a Board to provide continued leadership and ensure responsibility for the general management of the affairs of the Forum.

The Board comprises: Mr. Bader Al Sa’ad, Managing Director, Kuwait Investment Authority, as the new Chair of the Forum. Mr. Adrian Orr, Chief Executive Officer of New Zealand Superannuation Fund, as the new Deputy Chair. Mr. Jin Liqun, former Chair of IFSWF - former Chairman of the Board of Supervisors, China Investment Corporation (CIC), and current Chairman of China International Capital Corporation Ltd. - as Honorary Chair. Two more members of the Forum, who will be selected in due course.

We thank Mr. David Murray - former Chairman, Australia Government Future Fund Board of Guardians - for his crucial role since inception of the Forum, both as the Inaugural Chair of the Forum and subsequently as Honorary Chair of the IFSWF. David has provided strong leadership, and had a critical role, both in terms of shaping the Forum, and in terms of executing its purpose and mandate as a platform to facilitate a better understanding of the Santiago Principles and SWF activities.

Special guests and speakers

The Norwegian Minister of Finance, Mr. Sigbjørn Johnsen, addressed the Forum and emphasized Norway’s commitment to the work of the Forum. Mr. Yngve Slyngstad (CEO of Norges Bank Investment Management) gave a special address, while Mr. Christopher Towe, (Deputy Director of the Monetary and Capital Markets Department of the International Monetary Fund) discussed the outlook for the global economy.

The application of the Santiago Principles was discussed in a panel chaired by Mr. Jin Liqun (Honorary Chair of IFSWF) including: Mr. Israfil Mammadov (Deputy CEO, State Oil Fund of Azerbaijan), Mr. Rintaro Tamaki (Deputy Secretary-General of the OECD), Mr. Edwin Truman, (Senior Fellow of the Peterson Institute) and Mr. Kristian Flyvholm (Deputy Secretary-General of the IFSWF). The Investment strategy for long-term owners was discussed by a panel chaired by Elroy Dimson, Professors Emeritus (London Business School). Panelist included: Professor Andrew Ang (Columbina Business School), Professor Kenneth French (Tuck School of Business), Dr. Leslie Teo (Chief Economist and Director, Economics & Investment Strategy, GIC) and Mr. Adrian Orr (CEO, New Zealand Superannuation Fund). Dr. Patrick Soon-Shiong (CEO, NantWorks) gave a special lecture on the future of innovation in a session chaired by Mr. Bader Al Sa’ad (Chair of IFSWF); while Ms. Hilde Singsaas (Norwegian State Secretary) and Mr. Svein Gjedrem (Secretary General, Norwegian Ministry of Finance) - ended two interesting days of the discussion at the IFSWF Annual Meeting 2013 in Oslo - by giving their special addresses to the Forum members. Next Meetings

The Forum will meet in Doha in 2014. The meeting will be hosted by Qatar Investment Authority.

Note to editors

The International Forum of Sovereign Wealth Funds (IFSWF) was established by the International Working Group of Sovereign Wealth Funds (IWG) in Kuwait City on April 5-6, 2009 (see "Kuwait Declaration"). IFSWF is a voluntary group of Sovereign Wealth Funds (SWFs), which will meet, exchange views on issues of common interest, and facilitate an understanding of the Santiago Principles and SWF activities.

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