Linaburg-Maduell Transparency Index Released

Posted on 03/31/2008

The Linaburg-Maduell Transparency Index was developed at the Sovereign Wealth Fund Institute by Carl Linaburg and Michael Maduell.

The Linaburg-Maduell transparency index is a method of rating transparency in respect to sovereign wealth funds. Pertaining to government-owned investment vehicles, where there have been concerns of unethical agendas, calls have been made to the larger “opaque” or non-transparent funds to show their intentions. As of March 2008, the Government Pension Fund-Global of Norway ranks second among the largest sovereign wealth funds with approximately US$ 380 billion, this fund also ranks among the highest in transparency.

Norway currently leads the pathway to reducing the need for a code of conduct, possibly to the benefit of all sovereign investors. This index of rating transparency was developed around this fund, as it is known to be the pinnacle of clear investment intentions.

This index is based off ten essential principles that depict sovereign wealth fund transparency to the public. The following principles each add one point of transparency to the index rating. The index is an ongoing project of the Sovereign Wealth Fund Institute. The minimum rating a fund can receive is a 1, however, the Sovereign Wealth Fund Institute recommends a minimum rating of 8 in order to claim adequate transparency. Transparency ratings may change as funds release additional information. There are different levels of depth in regards to each principle, judgment of these principles is left to the discretion of the Sovereign Wealth Fund Institute.

Point Principles of the Linaburg-Maduell Transparency Index
+1 Fund provides history including reason for creation, origins of wealth, and government ownership structure
+1 Fund provides up-to-date independently audited annual reports
+1 Fund provides ownership percentage of company holdings, and geographic locations of holdings
+1 Fund provides total portfolio market value, returns, and management compensation
+1 Fund provides guidelines in reference to ethical standards, investment policies, and enforcer of guidelines
+1 Fund provides clear strategies and objectives
+1 If applicable, the fund clearly identifies subsidiaries and contact information
+1 If applicable, the fund identifies external managers
+1 Fund manages its own web site
+1 Fund provides main office location address and contact information such as telephone and fax

Developed by Carl Linaburg and Michael Maduell