In 2016, the International Forum of Sovereign Wealth Funds (IFSWF) requested each of its member institutions to complete a self-assessment of their implementation of the Generally Accepted Principles and Practices (GAPP, or Santiago Principles) adopted by members of the IFSWF. These Principles address issues pertaining to legal and governance structures, organisational design, and operational practices.
A review of the self-assessments reveals the breadth and depth of diversity across member countries and funds. While there are common structures and approaches to applying the Santiago Principles, no single model – or even small cluster of models – emerges from the reports. Rather, the self-assessments reflect local traditions, particularly in terms of legal and governance structures.
Despite this diversity, there are some clear themes that emerge in structures and approaches to implementation across funds and countries. Here we identify and highlight some of those themes and offer specific illustrations from the self-assessments.
We have organised this analysis into the three pillars consistent with those in the GAPP. Pillar I addresses the legal framework and objectives of funds, as well as how they coordinate investment activities with macroeconomic policies. Pillar II defines the institutional framework of a fund, as well as governance structures. Finally, Pillar III concentrates on the investment and risk framework of funds.