Treat sovereign funds equally


Sovereign wealth funds should be treated like any other institutional investor and not have special rules imposed on them, Henry Azzam, head of Deutsche Bank in the Middle East, told a conference on Sunday.

“It doesn’t make sense to impose rules on them not imposed on others. If we do this discrimination, there will be a lack of even-handedness in financial regulation,” he said.

He was responding to concerns in some Western economies that such funds may lack transparency and may have political agendas.

“They have been investing very intelligently and selectively,” Azzam said. “No matter what happens, not allowing sovereign wealth funds to operate like any institutional investor means there is less capital around the world.”

The comments from the top Middle Eastern executive at Deutsche – Germany’s flagship bank – come amid heightened fears in Germany that sovereign funds may force firms to cut jobs or harbour hidden political agendas.

The International Monetary Fund (IMF) and 25 sovereign wealth funds earlier this year established an international working group to draft guidelines for the state-owned funds.

Azzam said that emerging countries in Asia and South America welcome investments from Gulf sovereign wealth funds and were unlikely to view them as having a political agenda.

Swollen by windfall oil revenues and foreign currency reserves, sovereign wealth funds hold assets of between $1.9 trillion and $2.9 trillion, the US Treasury Department estimates.



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