CHRONOLOGY-Sovereign wealth funds and their developments

LONDON, Oct 12 (BestGrowthStock) – Sovereign wealth funds, which
manage windfall revenues for future generations, are set to
double their assets in less than 10 years to $7 trillion.

Following is a chronology of some of the key events for
sovereign wealth funds.

1953 – Kuwait Investment Authority is set up with the aim of
investing surplus oil revenues to reduce the reliance of Kuwait
on oil resource.

1981 – Government of Singapore Investment Corp is set up to
achieve long-term returns for the government — a risk-adjusted
rate above global inflation over 20-year investment horizon.

1990s – Norway sets up the Government Pension Fund Global as
a fiscal policy tool to support long-term management of Norway’s
petroleum revenue. The fund gets its first capital transfer from
the Ministry of Finance in 1996.

May 2005 – The term “sovereign wealth fund” was coined by
then State Street executive Andrew Rozanov in his paper “Who
holds the wealth of nations?” in the Central Banking Journal.

July 2005 – Korea sets up Korea Investment Corp with $17
billion from FX reserves and $3 billion from government funds.

2006 – Dubai-owned DP World acquires UK ports operator P&O,
which owns U.S. ports, creating a storm in the United States
among politicians who see that as a security threat. DP World is
later forced to sell the port assets.

July 2007 – The U.S. Senate votes to tighten rules for
approving foreign takeovers of American companies, prompted by
the DP World saga. The government is required to spend an extra
45 days examining deals with foreign state-owned companies for
national security concerns.

September 2007 – China creates China Investment Corp (Read more about U.S. companies investment into China) after
the Finance Ministry issues 1.55 trillion yuan in special bonds
to buy about $200 billion of forex reserves from the People’s
Bank of China.

October 2007 – French President Nicholas Sarkozy hits out at
SWFs, saying: “We’ve decided not to let ourselves be sold down
the river by speculative funds, by unscrupulous attitudes which
do not meet the transparency criteria one is entitled to expect
in a civilised world.”

November 2007 – Abu Dhabi Investment Authority pays $7.5
billion for a 4.9 percent stake in Citigroup.

December 2007 – GIC invests 11 billion Swiss francs ($9.75
billion) into Swiss bank UBS. CIC buys $5 billion in equity
units which are convertible to stock in the brokerage.
Singapore’s Temasek buys a $4.4 billion stake in Merrill Lynch.

January 2008 – As the crisis hits major economies, sovereign
wealth funds are billed as saviours of global finance, having
injected nearly $60 billion into Western banks. Heads of
sovereign wealth funds, a central bank governor, former and
present finance ministers debate the rise of sovereign wealth
funds at the World Economic Forum. Former U.S. Treasury
Secretary Lawrence Summers says national element in sovereign
funds gives potential grounds for concern. Bader Al Sa’ad, head
of Kuwait Investment Authority, says all the fear about SWFs has
no real basis.

March 2008 – Stephen Jen, then economist at Morgan Stanley
and an expert on sovereign funds, releases an estimate that SWFs
could reach $12 trillion in total assets by 2015. The report is
widely used as a benchmark to show rapid growth of the industry.

June 2008 – Qatar Investment Authority (QIA) and Sheikh
Hamad bin Jassim bin Jabr al-Thani, a member of the Qatari royal
family, invest up to 1.8 billion pounds and 533 million pounds
respectively in British bank Barclays Plc.

August 2008 – Germany approves a law concerning takeovers of
domestic companies by SWFs and other outside investors which
could exert political influence. The government can review and
veto purchases of stakes of 25 percent or more in German firms
made by buyers outside the EU or European Free Trade Association
if it deems German security is at risk.

September 2008 – The International Working Group of
Sovereign Wealth funds, a group of 26 SWFs, issue a set of
voluntary practice guidelines designed to calm fears that they
invest with political motives.

2007-2009 – Various estimates show assets of sovereign
wealth funds may have shrunk 15-20 percent during the financial
crisis.

2009 – Russia withdraws 3.1 trillion roubles ($102 billion)
from the Reserve Fund, one of Russia’s two oil wealth funds, to
plug the country’s first budget deficit in a decade. The fund is
expected to run out in 2011.

March 2010 – Sheikh Ahmed bin Zayed al-Nahayan, 41-year-old
head of the Abu Dhabi Investment Authority, dies in a glider
crash in Morocco. In April, his brother Sheikh Hamed Bin Zayed
Al-Nahayan succeeds in a move that emphasises the ruling
family’s role in what is known as the world’s biggest SWF.

September 2010 – Africa’s biggest oil producer Nigeria
submits a bill to parliament to create a sovereign wealth fund
with $1 billion in seed capital. The wealth fund would replace
the current Excess Crude Account, which fell to $500 million
from $20 billion in 2007.

October 2010 – Japanese ruling Democratic Party proposes
setting up a sovereign wealth fund similar to China and
Singapore. It also suggests Japan should take advantage of a
strong yen to invest in overseas resource development, including
rare earth minerals.

Source: Reuters, websites of various sovereign wealth funds

(Compiled by Natsuko Waki; editing by Stephen Nisbet)

CHRONOLOGY-Sovereign wealth funds and their developments