Singapore, Inc.

Ashby Monk

Singapore seems to have the market cornered in SWF design; countries around the world are using either of Singapore’s two SWFs as models for their own SWFs.

For example, China has drawn inspiration from both Singapore’s funds: the CIC was based in large part on the Government of Singapore Investment Corporation, and CIC 2.0 is reported to be based on Temasek. Most recently, Bahrain’s SWF–Mumtalakat–is now modelling itself on Temasek.

What is it about Singapore’s SWFs that makes them so appealing to countries considering a new SWF? I’d argue the appeal is largely based on legitimacy. This intangible asset can be rather elusive for many new SWFs. Nevertheless, Singapore’s funds appear to have it, so it is natural that other SWFs–which will require international legitimacy in order to implement their investment strategies around the world–will seek to replicate the Singaporean models.

Another reason? These two funds have facilitated the accumulation of hundreds upon hundreds of billions of dollars within a tiny, island nation. That probably has some appeal too…

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About

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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