The phrase “Know Your Client”, “Know Your Customer”, or “KYC” for short is becoming a more important term as an increasing number of global institutions are entering the fray, engaging in more alliances and transactions and working together on capital-intensive efforts. KYC is becoming increasingly vital as regulations sprout and fiduciaries should know what kind of party with whom they are dealing. As KYC compliance proliferates, we have witnessed a dramatic increase in our corporate subscription business. Record-breaking fines issued by financial regulators globally, especially in the West, is making KYC compliance a center point issue. Scandals can destroy a financial institution.
KYC is not just about regulation. It’s also about with whom a fiduciary plans on undertaking transactions. Will this institutional entity be a fair partner in a club deal? Do they have substantial assets? Counterparty risk? Who owns the institution, and what is their governance like?
SWFI provides detail on more than 275 institutional entities including people, external fund managers, assets and other important information that cannot be gleamed from the top layer. SWFI is committed to covering more institutional entities. In addition, we also permit our clients, at times, to request institutional entity inclusion, a tremendous benefit that allows the customer to set the menu, versus the provider.
SWFI is investing more into our research area which, again, is growing fast.
With that being said, SWFI foresees more cross-border investment in the years to come, despite growing nationalism in certain countries. Big brother and little brother, terms referenced between the U.S. and China, will continue a push-and-pull relationship in the decades to come. Russia, China, India and Europe are not going anywhere, which is why periods of conflict and resolution will vacillate.
Institutional investors should attend conferences and meetings in other countries, or at least make sure the delegation of attendees is somewhat international. This is what SWFI tries to do when we host our summits and forums. We try to get as many international high-level delegates as possible, even in Scottsdale, Arizona. Getting a world view, not just from a “consultant”, but from actual practitioners and policymakers are paramount when making decisions regarding your portfolio. Lastly, SWFI tries to get a diverse point of view. We bring together ESG believers and non-believers, smart beta lovers and haters, and even optimists and doomsayers. Dialogue, respect and debate are core tenets of SWFI conferences.
The views in this article are expressed by Michael Maduell.
Michael Maduell is President of the SWFI.
The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.
According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”
NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.
“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.
The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.
[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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