Query: Sovereign wealth fund pdf

title: Portfolio Choice for a Resource Based Sovereign Wealth Fund: An Analysis of Cash Flows
abstract: We consider the portfolio choice of a government with a Sovereign Wealth Fund (SWF) when government revenues depend on exhaustible resources, such as oil and gas. The question is whether the SWF portfolio should underweight shares in the resource industry. Some studies have found that these share prices correlate more closely with the overall stock market than the resource price, which would seem to weaken the case for underweighting. However, equity price movements depend not only on changes in expectations of future cash flows, but also on time variation in discount factors. We analyze cash flows directly, rather than trying to disentangle these effects. We have collected cash flow data for the companies in all of the major industries of the FTSE Global All Cap index, the basis for the strategic index of the Norwegian Government Pension Fund Global. Subsequently, we look at the correlations between each industry's cash flow and the Norwegian government's cash flow from oil and gas. We find a close, statistically significant, and persistent correlation for the oil and gas industry. The correlations for other industries are small and mostly insignificant. We believe that our findings can be used to support proposals for SWFs in countries with significant petroleum revenues to underweight shares in this industry.

title: A Sovereign Wealth Fund for South Africa
abstract: Sir, In his 2020 South African budget, the Minister of Finance, Dr Tito Mboweni has targeted R30bn to establish a Sovereign Wealth Fund (SWF) The Fund would be financed as follows: 'There are a variety of possible funding sources such as the proceeds of (broadband) spectrum allocation, petroleum, gas or mineral rights royalties, the sale of noncore assets, future fiscal surpluses and money we set aside'  In a budget that shows a 6.8 percent of GDP deficit  that is to be financed from loans, this is a bold move. Part of the plan is to finance the SWF from royalties from South Africa's dwindling mineral wealth. Attracting elusive foreign direct investment (FDI) is needed to open new mines rather than relying on the aged, existing inventory. Royalties from the latter are already allocated. This FDI would be sought in an economic environment, overhung with the oppressive cloud of imminent changes to Section 25 of the Constitution to legalise land expropriation without compensation  But these drawbacks notwithstanding, saving for future generations is not a bad principle, so it might be instructive to examine an existing case, one of the world's largest SWFs, that of Norway. Norway has reinvested part of the resource rent from its share of North Sea oil notably from the Ekofisk oil field (discovered in 1969) The sovereign wealth fund (Government Pension Fund Global GPFG) reached 10 000 billion NOK in 2019  The fund is exclusively invested outside Norway, mainly to avoid overheating the Norwegian economy but also not to interfere with the state pension fund (Government Pension Fund Norway GPFN) Currently GPFG adheres to a policy of investing up to 70 percent of the fund in equity, up to 30 percent in fixed income and up to 7 percent in unlisted landholdings. The GPFN is invested within the country (85 percent) and the Nordic region (15 percent)  In 2019, the GPFN was worth 254.8 billion NOK, with 60.3 percent of the Fund invested in equities and the balance invested in fixed income securities [6] The current value of the GPFG is 7.3X government expenditure as Norway spends money at a rate of 1 377.1 billion NOK pa according to its 2019 budget [7] The GPFG is to be used by the present generation as well as to save for future generations in Norway [4] At present, Norway uses the interest and dividends generated by the GPFG to pay for the budget deficit. For 2019 'The non oil deficit is projected at NOK 232.5 billion. This deficit is fully financed through a transfer from the Government Pension Fund Global' [7] By financing the budget deficit, earnings from the CPFG enable the government to expand the economy. As the Norwegian Minister of Finance has stated, 'By cutting taxes and duties, we provide businesses and families with more economic leeway. In addition, lower taxes encourage job creation and make work more attractive. We are constructing roads and railways at a rapid pace, and we continue to promote research, innovation and INTERNATIONAL JOURNAL OF ENVIRONMENTAL STUDIES 2020, VOL. 77, NO. 3, 367 369 https:/doi.org/10.1080/00207233.2020.1759306

title: Sustaining wealth: Simulating a sovereign wealth fund for the UK's oil and gas resources, past and future
abstract: Exhaustible resources and the revenues they generate present a number of broad problems for macroeconomic management. For example, tax revenues can be large and highly volatile, and the stream of revenues is finite. An increasing number of countries now view resource funds and/or fiscal rules for resource revenues as the answer to these challenges. In this paper, we explore the consequences for the UK if past revenues arising from the depletion of subsoil assets had been channelled into a sovereign wealth fund. We show that had a decision been made to establish such a fund in 1975, this could have been substantial in size by 2018 (about GBP 354 billion) and, moreover, would have had a number of benefits such as a reduction in volatility of resource revenues flowing to the Treasury. Crucially, the fund's value would have substantially boosted the size of the government balance sheet, yielding corresponding fiscal benefits. We argue this missed opportunity is underlined further by considering the current debate about shale gas development in the UK. Notwithstanding considerable uncertainties, favourable and optimistic projections for key parameters are required for any shale based fund to match what we simulate based on past experience for conventional subsoil assets.

title: Regulating the State Capitalism: Is There an Optimal Regulatory Model for Sovereign Wealth Fund Investment?

title: Sovereign Wealth Fund (SWF) A Tool for Diversifying Nigeria's Emerging Economy

title: Investing in Sustainability: Ethics Guidelines and the Norwegian Sovereign Wealth Fund

title: Sovereign Wealth Fund or State Capitalism: Nigeria's Search for a Stable Economic Order
abstract: For quite some time now, the Sovereign Wealth Fund (SWF) has become an issue in the front burner of Nigeria's national debate. The manner it was handled by the federal government became suspicious because there was serious disagreement among the stake holders, starting with the source of funding. But the whole idea of SWF in itself has remained controversial especially with regard to the problem it is meant to solve. The paper makes a contribution to this debate with an analysis of the extant literature and theoretical framework. It cites examples of successful experiences of the SWF and the circumstances that back up their results and suggests that Nigeria's search for a stable economic order does not lie in the SWF but more importantly to take care of all the necessary structural changes and erect a new political framework for a viable and durable economic development.

title: New wealth, New wisdom: Updating the narrative of sovereign wealth fund creation
abstract: *Conventional wisdom about the types of countries that create SWFs no longer hold.*International reserve balances are not a significant predictor of SWF creation.*Evidence that current account surpluses lead to SWF creation is limited.*Resource dependence remains the most predictive indicator of SWF creation.*GDP growth is also a robust predictor of SWF creation.

title: The long term impact of sovereign wealth fund investments
abstract: In this study, we examine the long term impact of sovereign wealth fund (SWF) investments on target firms' value, return volatility, and crash risk. We find that SWF investments generally underperform stock markets in the long run. Furthermore, the effect of SWF ownership critically depends on the level of investor protection in recipient countries. We show that domestic SWFs impart a stabilizing effect on the stock price of target firms in countries with low investor protection, but the effect is weaker for foreign SWFs. Moreover, SWF investments during the non crisis period increase the crash risk of target firms, but the effect reverses during the crisis period.

title: State ownership, sovereign wealth fund and their effects on firm performance: Empirical evidence from Vietnam
abstract: This study investigates the effects of state ownership on firm performance using data on listed firms in Vietnam. We find that state ownership of listed firms is positively related to firm performance. In addition, we find that the effects of state ownership vary depending on the type of state ownership. Firms perform best when controlled by a state owner in the form of a sovereign wealth fund. We also find that the relationship between state ownership and firm performance is nonlinear. Overall, the study contributes significantly to the growing body of evidence on the effects of state ownership, the impact of the type of state owner, and the role of controlling shareholders in corporate governance frameworks.