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$3.5 trillion

2010 Global Sovereign Brands Study: attitudes to sovereign wealth funds and the countries that host them 15 th June 2010. $3.5 trillion. SOVEREIGN WEALTH AND THE COMPETITIVE LANDSCAPE. Sovereign Wealth Funds have the lowest familiarity.

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$3.5 trillion

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  1. 2010 Global Sovereign Brands Study: attitudes to sovereign wealth funds and the countries that host them 15th June 2010

  2. $3.5 trillion

  3. SOVEREIGN WEALTH AND THE COMPETITIVE LANDSCAPE

  4. Sovereign Wealth Funds have the lowest familiarity... Q. How familiar are you with the following as sources of investment? (% Very/somewhat familiar) Base: PSB Sovereign Wealth Study (among all) 1064

  5. ... but are viewed more favourably than hedge funds while trailing rest of field Q. In general how favourable are you to the following sources of investment? (% Very favourable) Base: PSB Sovereign Wealth Study (among all) 1064

  6. Familiarity/Favourability: a clear correlation r2*-=0.8861 Base: PSB Sovereign Wealth Study (among all) 1064

  7. Low familiarity and favourability accompanied by lower trust levels Q. How trustworthy do you consider the following sources of investment to be?(Very/somewhat trustworthy) Base: PSB Sovereign Wealth Study (among all) 1064

  8. The underlying level of concern with SWFs versus other investments are significant Q. How concerned, if at all, would you be if a sovereign wealth fund were to invest in your country compared with other forms of finance? 97 60 54 50 47 33 30 26 Base: PSB Sovereign Wealth Study (among all) 1064

  9. Key concern – political motivation Q. When compared with other sources of investment, to what extent, if any, are you concerned about the motives of sovereign wealth funds from the following countries, for example, that they might be trying to assert political influence ? (Very/somewhat concerned)

  10. Key concern – political motivation Q. When compared with other sources of investment, to what extent, if any, are you concerned about the motives of sovereign wealth funds from the following countries, for example, that they might be trying to assert political influence ? (Very/somewhat concerned)

  11. THE ECONOMIC DOWNTURN CREATES MORE INTEREST IN SWFs

  12. Elites are more favourable towards SWFs since the global downturn Q. How, if at all, has your favourability towards sovereign wealth funds changed since the global downturn? Base: PSB Sovereign Wealth Study (among all) 1064

  13. Favourability particularly high in Brazil, India and China... Q. How, if at all, has your favourability towards sovereign wealth funds changed since the global downturn? Base: PSB Sovereign Wealth Study (among all) 1064

  14. ... and attitudes look set to become more favourable as the global economy improves Q. Are you likely to become more or less favourable toward sovereign wealth funds as the global economy improves? Base: PSB Sovereign Wealth Study (among all) 1064

  15. THE OPPORTUNITY FOR SWFS IN THE FUTURE

  16. SWFs are viewed among least likely to have contributed to market turmoil • Sovereign Wealth is not seen as responsible for market turmoil compared to other forms of investment • 68% of Elites think Sovereign Wealth funds invest for the long term Q. Based on your impressions, to what extent do you agree or disagree that the investment activities of the sources of investment below contribute more to market turmoil and uncertainty than other forms of investment? (Strongly/somewhat agree) Q. Would you say most sovereign wealth funds tend to invest more for the long term or short term? Base: PSB Sovereign Wealth Study (among all) 1064

  17. SWFs are seen as more reliable than private equity and hedge funds Q. How reliable do you consider the following sources of investment compared to other sources of investment? (Much more reliable) Base: PSB Sovereign Wealth Study (among all) 1064

  18. SWFs have high approval to invest in a range of industries – excluding defence Q. To what extent do you approve or disapprove of sovereign wealth funds investing in the following sectors of your country’s economy? % Strongly/somewhat approve Base: PSB Sovereign Wealth Study (among all) 1064

  19. SWF IMAGE IS TIED TO HOST COUNTRY IMAGE

  20. Country reputation is key in shaping perceptions of SWFs • 98% say country of origin reputation is very / somewhat important in driving SWF reputation Q. In your opinion, how important is the reputation of the country of origin of a sovereign wealth fund in terms of how positively or negatively you might view that sovereign wealth fund? (% Very important) Base: PSB Sovereign Wealth Study (among all) 1064

  21. Country reputation is highly correlated to perceptions of SWFs r2-=0.95 % saying very important in driving positive perception of country % saying very important in driving positive perception of SWF Base: PSB Sovereign Wealth Study (among all) 1064

  22. SWF RANKINGS

  23. Approval of SWFs investment from different countries Q. To what extent do you approve or disapprove of sovereign wealth funds from the following countries investing in your country? Base: PSB Sovereign Wealth Study (among all) 1064

  24. Cross country approval ratings of SWFs Q: To what extent do you approve or disapprove of sovereign wealth funds from the following countries investing in your country? (% strongly/somewhat approve) Base: PSB Sovereign (each respondent sees 9 of 19) total 500 approx. Chinese respondents were not asked about China.

  25. CORE REPUTATIONAL METRICS

  26. Key SWF metrics: transparency and accountability Q. How important to you are the following factors in deciding whether you would approve or disapprove of a sovereign wealth fund investing in your country and industries? % Very important Base: PSB Sovereign Wealth Study (among all) 1064

  27. Sovereign Wealth comparison: Transparency Q. What is your impression ofhow transparent these sovereign wealth funds are or would be in terms of their decision-making compared with other sources of investment? % Very/somewhat transparent Base: PSB Sovereign Wealth Study (among all) 1064 (respondents see 9 of 19 countries)

  28. Sovereign Wealth comparison: Accountability Q. To the best of your knowledge, which of these factors do you think apply to the following country sovereign funds: accountability? (% Applies) % Very/somewhat transparent Base: PSB Sovereign Wealth Study (among all) 1064 (respondents see 9 of 19 countries)

  29. SUMMARY & IMPLICATIONS

  30. Summary • Low familiarity with SWFs driving: • Low favourability • Low trust • Underlying concerns, e.g., political agenda • Interest increasing through the downturn • Less blame for market turmoil • Seen as long term investors • Accelerating BRIC interest • SWF image currently tied to host country image • Political, economic stability, rule of law, international standards are key drivers for country image and therefore SWF approval • Transparency and Accountability key SWF metrics • Highest performers on key country and SWF metrics: Norway, Singapore, Hong Kong achieve

  31. IMPLICATIONS

  32. The competitive challenge • SWFs are set to face greater competition from each other – as well as other sources of funding – for the best assets and investments • SWFs may face resistance, and in some cases protectionism, founded on continuing concerns over their behaviour; and • The pace of their adoption of global standardsof corporate accountability – and their ability to communicate progress – will be a factor in both the above

  33. The communications challenge • Expectations will increase with importance • Need to act to combat protectionism • Competition for assets will become keen • Building trust at home • Building trust abroad • Country image – business inhibitor or competitive advantage?

  34. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  35. Adopt international standards of corporate behaviour

  36. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  37. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  38. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  39. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  40. Practical strategies for Sovereign Wealth Funds • Adopt international standards of corporate behaviour • Open a real dialogue • Build reputation in the round • Focus: stakeholder and country based communication • Tackle the country challenge • Leaders exceed societal expectations

  41. Q&A AND DISCUSSION

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