Egypt Is Finalizing A New SWF

Ashby Monk

Reuters is reporting this morning that Egypt is finalizing a draft law for a new “asset management agency” that would operate like an SWF. According to Mahmoud Mohieldin, the outgoing investment minister, the new agency would bring “stability and efficiency to state owned-assets”. This is potentially a big deal for Egypt, as the new SWF (let’s just call it that) may be given purview over 147 (!) state owned firms and would ultimately be responsible for future privatizations and, ostensibly, managing the financial assets derived. Mohieldin also said that the inspiration for this new entity was Malaysia’s Khazanah.

For me, however, the most interesting bit comes at the very end of the Reuters article. Apparently, the new agency will be overseen by a committee of…wait for it…30 (!) members. I’m sorry to have to be the one to say this, but a 30 person committee is roughly 23 too many. I understand wanting to provide important stakeholders with representation on this decision-making body, but large and unwieldy committees are recipe for gridlock and decision-making failure. I’ve personally witnessed the fractured and heated debates that take place within public pension fund committees of 12 people, so I can only imagine what a 30-member committee will look like. Anyway, the law has not yet received parliamentary approval, so there is still time to limit the size of this committee to something more reasonable.

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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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