In a survey on SWFs by research and communications strategy consultants Hill & Knowlton and Penn Schoen Berland, respondents from wealthy countries were most receptive to the possibility of these funds investing in these sectors in their nations.
Conversely, there was near-unanimous opposition to SWFs investing in the defence sectors of other countries, with the most opposition expressed by Germany and the UK.
Andrew Laurence, senior corporate counsel and chairman for Hill & Knowlton’s global corporate practice committee, explained that whenever it came to assets viewed as “strategic”, there would always
be public resistance to a deal, regardless of the purchasing country. He said: “Generally the message is that most countries are favourable to sovereigns investing in a range of assets, but definitely not defence.”
In Mr Laurence’s view, the best thing a SWF can do is be transparent, both in its investments and governance – this will create more trust between the funds and the public and ultimately expand the SWF’s investment universe.
The report also showed that while some respondents welcomed foreign investment from SWFs in certain sectors, the country the SWF came from was also highly important. Those surveyed were less enthusiastic about investment from SWFs located in regimes considered to be autocratic, particularly Algeria, Botswana, Brunei, Kazakhstan, Libya and Nigeria. There was concern that SWFs from these countries were less predictable and reliable.