Navigating Global Risks Series: Long-term Investing Perspective

For decades, policy-makers have grappled with the challenge of transforming commodity wealth and state assets into sustainable economic development. This challenge is most apparent in countries where levels of commodity wealth, and economic dependence on it, are highest. In other regions, governments are working to release capital trapped in underperforming legacy assets to drive economic growth. As the economic and social impact of a changing energy landscape, demographic shifts and climate change become more apparent, the need for sustainable growth solutions continues to grow.

 

Policy-aligned, long-term investors are uniquely suited to address these challenges because of their scale, horizon, and integration into economic policy.

 

Over the last decade and a half, the use of investment as an economic policy tool has increased, and sovereign funds now hold more than $8 trillion in assets worldwide. Their investment strategies continue to evolve and increasing sophistication has enabled a broader range of investment approaches. Commercially-oriented sovereign investors who seek to understand emerging global challenges from a financial perspective are increasingly joined by strategic investors who invest to address these economic challenges head-on.

As the sector continues to grow and as mandates become more complex, these funds will need to better communicate their role as a commercially-oriented, long-term focused class of investors. Additionally, the emergence of new Global Risks will require increased understanding of how their policy mandates and the financial implications of these risks interact. 

The project aims to build a permanent coalition of sovereign investor, investment management, and policy communities to promote a better understanding of the current and future uses of investment as an economic policy tool, with a focus on the interplay between emerging Global Risks, policy-oriented investment mandates, and investment strategy.