Gulf funds may respond to transparency calls

Gulf Arab sovereign wealth funds, worth at least $800 billion, may be willing to work with each other and the International Monetary Fund (IMF) to respond to calls for greater transparency, a US treasury official said on Monday.

The Group of Seven industrialised nations called this month for more accountability from the world's state-owned funds, including to ensure that their investments were driven by commercial rather than political motives.

Funds in the world's biggest oil exporting region, swollen a by quadrupling of crude prices in since 2002, may be willing to address those concerns, US Treasury Under Secretary for International Affairs, David McCormick told reporters.

"We are hopeful that the sovereign wealth funds will come together, in a dialogue and maybe through the IMF and perhaps in other ways that could be the basis for shared understanding," McCormick said in Abu Dhabi.

"A little more clarity on the funds will be useful for all parties, for those who are trying to invest sovereign wealth and those who are receiving it," he said.

The Abu Dhabi Investment Authority, which manages surplus revenues of the world's sixth-largest oil exporter, has at least $500 billion in assets, Washington-based Peterson Institute for International Economics estimated in a report in August. According to most estimates it is the world's largest sovereign fund.

The Qatar Investment Authority manages about $50 billion in assets, according to the Peterson Institute.

The Kuwait Investment Authority had about $213 billion on March 31, according to official figures.

Net foreign assets of the Saudi Arabian Monetary Agency, the central bank of the world's largest oil exporter, were worth about $251 billion at the end of July.

The International Monetary Fund has encouraged countries with wealth funds to voluntarily disclose investment information to allay concerns.

The world's sovereign wealth funds, including state investment arms set up by countries such as China, Norway and Russia, control more than $2 trillion in assets, according to the IMF.

Western countries have raised concerns that these such funds lack oversight and could destabilise global markets. They want rules in place to protect politically sensitive companies from takeover approaches.

Some wealth fund owners have said they were being unfairly singled out.

Russian Finance Minister Alexei Kudrin said sovereign wealth funds should be "subject to the general rules of the free movement of capital" and his country would object to any special restrictions.

Nasser Al Shaali, chief executive of Dubai International Financial Centre, said any regulations "should be uniform as opposed to being reactive to a region or a newly invented category of investment vehicles."

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