Introducing the HIC

Ashby Monk

Saudi Arabia has unveiled plans to set up a new public investment fund–the Hassana Investment Company–to invest pension fund assets in global stock markets. Indeed, it will manage the assets of the General Organization for Social Insurance.

The initial set-up reminds me of the Canada Pension Plan Investment Board or even the Government Pension Investment Fund in Japan rather than a typical SWF.  We’ll need to get a few more details about this institution before we can understand whether it is a SWF or not.   

In any case, setting up a new, risk seeking investment vehicle is a break with traditional Saudi conservatism; it is estimated that 85% of the Kingdom’s assets are in dollar denominated, fixed income securities.

4 Responses to “Introducing the HIC”

  1. 1 rien huizer August 25, 2009 at 12:49 pm

    Any pool of state owned assets with no other claimant than the state itself could be called a SWF, as long at that state accepts (temporarily) that it be governed and managed in accordance with the Santiago rules. That does not make it a non-state actor in international law. But it may make it out of bounds for some in certain non-democratic societies where the ruling elite lives by intra-elite rules. That is fine, but SWFs should not be respected by OECD gvts as a legitimate way to avoid barriers to protectionism, despite their attractiveness for investments banks (an importtant interest group in the US and UK).Even if some gvts derive opportunistic benefits from SWF investment.

  2. 2 Ashby Monk August 25, 2009 at 1:16 pm

    Rien: I agree with your simplified definition of SWFs. I’m always perplexed when analysts (and the US treasury) define SWFs as only having “foreign assets”. Temasek? France’s FSI?

  1. 1 Sanabil al-Saudia « Oxford SWF Project Trackback on April 28, 2009 at 2:06 pm
  2. 2 Saudi’s New SWFs Are “Stuck” « Oxford SWF Project Trackback on July 22, 2010 at 11:12 am

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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