Sovereign wealth funds: The new rulers of finance
Financial institutions weigh up the opportunities
Fight on for Aussie’s future prizes
Temasek: A fund apart? Often sovereign funds call on investment management consultants, such as Watson Wyatt and Mercer, as well as other advisory outfits, to help them. "There’s a huge need for helping sovereign funds build the infrastructure, the risk models and the asset allocation," says Afsaneh Beschloss, a former treasurer and chief investment officer at the World Bank, who is now chief executive and president of the Rock Creek Group, a firm that provides advisory services to sovereign funds as well as managing money on their behalf. "These are the areas that need the greatest consideration. The investing part is almost easier."
Getting the basics right is the secret to success, adds Beschloss, who during her time at the World Bank started a project to advise and manage money for a number of sovereign wealth funds and central banks. "Investment management is all about asset allocation and allocation of risk capital. But how does a fund do that and how does it measure performance? The basics are something that the established funds understand but the newer ones less so," she says.