Sovereign funds get new research and advisory service

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The world of sovereign wealth funds has mushroomed in the past few years, growing in number and size. But compared with pension funds and some other categories of institutional investors, independent research on SWFs is hard to come by. Last year, Diego Lopez, a former corporate finance advisor with KPMG and PwC, launched Global SWF to help fill the void.

Perhaps the relative lack of research is because SWFs tend to be a lot bigger than the average pension fund and much more complex, favouring allocations to alternatives and most also having a big internal investment team. They also tend to be more recent arrivals on the investment scene. And, it seems, that no two SWFs are the same in terms of their aims and philosophies.

Global SWF joins the California-based SWF Institute, another commercial organisation, and Sovereign Wealth Center, which is part of the Institutional Investor media group, plus Preqin, a research and consulting firm specialising in alternative assets, as the main independent providers of information in the space. Lopez says he has dealt with the other three organisations for a long time, as a customer.

In July last year he decided, after 12 years at big accounting and corporate advisory firms, to “go independent”. His last role at PwC was as co-leader of the firm’s SWF and pension fund program. He was also the ‘financial sponsor coverage banker’ for the US M&A business.

His first roles after PwC involved a project with the World Bank, followed by work for the United Nations and the Asian Development Bank, including helping in the establishment of one of the newest SWFs, the Mongolian Fiscal Stability Fund, which looks to harness and invest some of the country’s mining royalties for future benefit.

Lopez tends to marry those experiences into his service offering at Global SWF. The New York-based firm provides traditional consulting and corporate advice, both for SWFs and big pension funds as well as managers who want to deal with them, and two new services: a premium option subscription service for research; and a placement agent service.

He publishes a quarterly newsletter. The latest one includes some interesting comments reflecting the different nature of SWFs compared with pension funds. One aspect is that SWFs tend to be more collaborative with like-minded investors amongst their cohort.

Lopez said last week: “It has certainly been an interesting year for the SWF industry, with better returns than 2018, significant investment activity and increasing efforts to be collaborative, sustainable and responsible. For the last newsletter of the year we have chosen to talk about people, i.e. the most important asset SWFs and pension funds have, and about the cost-efficiency of these investment organisations. We also refer to the thought leadership published during the past three months on low returns, on FDI [foreign direct investment]trends and on valuation issues for Sovereign Development Funds [funds which serve a dual purpose of a specific national goal as well as investing for the nation’s future in general].”

– G.B.

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