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2010 Global Sovereign Brands Study: attitudes to sovereign wealth funds and the countries that host them 15th June 2010

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Title: 2010 Global Sovereign Brands Study: attitudes to sovereign wealth funds and the countries that host them 15th June 2010


1
2010 Global Sovereign Brands Study attitudes to
sovereign wealth funds and the countries that
host them 15th June 2010
2
  • 3.5 trillion

3
SOVEREIGN WEALTH AND THE COMPETITIVE
LANDSCAPE
4
Sovereign Wealth Funds have the lowest
familiarity...
Q. How familiar are you with the following as
sources of investment? ( Very/somewhat familiar)
Base PSB Sovereign Wealth Study (among all) 1064
5
... but are viewed more favourably than hedge
funds while trailing rest of field
Q. In general how favourable are you to the
following sources of investment? ( Very
favourable)
Base PSB Sovereign Wealth Study (among all) 1064
6
Familiarity/Favourability a clear correlation
r2-0.8861
Base PSB Sovereign Wealth Study (among all) 1064
7
Low familiarity and favourability accompanied by
lower trust levels
Q. How trustworthy do you consider the following
sources of investment to be?(Very/somewhat
trustworthy)
Base PSB Sovereign Wealth Study (among all) 1064
8
The underlying level of concern with SWFs versus
other investments are significant
Q. How concerned, if at all, would you be if a
sovereign wealth fund were to invest in your
country compared with other forms of finance?
97
60
54
50
47
33
30
26
Base PSB Sovereign Wealth Study (among all) 1064
9
Key concern political motivation
Q. When compared with other sources of
investment, to what extent, if any, are you
concerned about the motives of sovereign wealth
funds from the following countries, for example,
that they might be trying to assert political
influence ? (Very/somewhat concerned)
10
Key concern political motivation
Q. When compared with other sources of
investment, to what extent, if any, are you
concerned about the motives of sovereign wealth
funds from the following countries, for example,
that they might be trying to assert political
influence ? (Very/somewhat concerned)
All UK US Egypt Brazil Germany China India
Russia 83 93 88 50 76 84 92 74
China 76 85 88 17 68 81 N/A 84
Libya 73 86 91 16 79 85 53 70
Kazakhstan 71 70 71 41 74 72 72 77
Algeria 68 73 82 68 61 70 63 63
Nigeria 68 77 84 48 57 73 65 62
Botswana 61 54 74 51 70 55 57 56
Kuwait 60 44 66 4 62 53 84 77
Qatar 58 53 75 4 53 49 74 61
Malaysia 56 47 61 10 56 51 77 64
Brunei Darussalam 54 44 61 43 67 53 45 68
Abu Dhabi 53 44 70 13 68 33 61 64
Mexico 52 40 55 40 58 32 84 59
Oman 52 42 67 12 56 46 60 57
Hong Kong 51 26 54 19 64 47 N/A 50
Bahrain 51 42 63 12 63 45 62 47
Dubai 50 43 70 8 48 39 73 53
Singapore 48 18 48 45 65 32 86 44
Norway 39 11 20 36 66 8 89 44
11
THE ECONOMIC DOWNTURN CREATES MORE INTEREST IN
SWFs
12
Elites are more favourable towards SWFs since the
global downturn
Q. How, if at all, has your favourability towards
sovereign wealth funds changed since the global
downturn?
Impact of downturn All UK US Egypt Brazil Germany China India
Much more favourable towards sovereign wealth funds 17 9 9 11 39 4 22 22
Somewhat more favourable towards sovereign wealth funds 34 30 20 27 41 24 56 41
No more or less favourable toward sovereign wealth funds 36 43 44 41 19 61 17 26
Somewhat less favourable towards sovereign wealth funds 11 15 23 15 0 9 5 9
Much less favourable towards sovereign wealth funds 3 3 5 6 1 2 1 1
Base PSB Sovereign Wealth Study (among all) 1064
13
Favourability particularly high in Brazil, India
and China...
Q. How, if at all, has your favourability towards
sovereign wealth funds changed since the global
downturn?
Impact of downturn All UK US Egypt Brazil Germany China India
Much more favourable towards sovereign wealth funds 17 9 9 11 39 4 22 22
Somewhat more favourable towards sovereign wealth funds 34 30 20 27 41 24 56 41
No more or less favourable toward sovereign wealth funds 36 43 44 41 19 61 17 26
Somewhat less favourable towards sovereign wealth funds 11 15 23 15 0 9 5 9
Much less favourable towards sovereign wealth funds 3 3 5 6 1 2 1 1
Base PSB Sovereign Wealth Study (among all) 1064
14
... and attitudes look set to become more
favourable as the global economy improves
Q. Are you likely to become more or less
favourable toward sovereign wealth funds as the
global economy improves?
Impact of recovery All UK US Egypt Brazil Germany China India
Much more favourable 18 5 9 24 45 1 26 16
Somewhat more favourable 40 34 39 28 46 23 56 53
No change 35 53 44 32 8 72 15 20
Somewhat less favourable 7 7 7 15 1 4 2 10
Much less favourable 0 1 1 0 0 0 1 0
Base PSB Sovereign Wealth Study (among all) 1064
15
THE OPPORTUNITY FOR SWFS IN THE FUTURE
16
SWFs are viewed among least likely to have
contributed to market turmoil
Investment form
Sovereign Wealth 40
Investment banks 65
Hedge funds 65
  • Sovereign Wealth is not seen as responsible for
    market turmoil compared to other forms of
    investment
  • 68 of Elites think Sovereign Wealth funds invest
    for the long term

Q. Based on your impressions, to what extent do
you agree or disagree that the investment
activities of the sources of investment below
contribute more to market turmoil and uncertainty
than other forms of investment?
(Strongly/somewhat agree)
Q. Would you say most sovereign wealth funds tend
to invest more for the long term or short term?
Base PSB Sovereign Wealth Study (among all) 1064
17
SWFs are seen as more reliable than private
equity and hedge funds
Q. How reliable do you consider the following
sources of investment compared to other sources
of investment? (Much more reliable)
Base PSB Sovereign Wealth Study (among all) 1064
18
SWFs have high approval to invest in a range of
industries excluding defence
Q. To what extent do you approve or disapprove of
sovereign wealth funds investing in the following
sectors of your countrys economy?
Strongly/somewhat approve
Base PSB Sovereign Wealth Study (among all) 1064
19
SWF IMAGE IS TIED TO HOST COUNTRY IMAGE
20
Country reputation is key in shaping perceptions
of SWFs
  • 98 say country of origin reputation is very /
    somewhat important in driving SWF reputation

Q. In your opinion, how important is the
reputation of the country of origin of a
sovereign wealth fund in terms of how positively
or negatively you might view that sovereign
wealth fund? ( Very important)
Sources of investment All UK US Egypt Brazil Germany China India
Very important 68 68 63 94 63 56 62 72
Somewhat important 30 29 35 5 37 41 37 25
Somewhat unimportant 1 3 2 1 0 3 1 1
Not at all important 0 1 0 0 0 0 0 1
Don't know 0 0 0 1 0 1 0 1
Base PSB Sovereign Wealth Study (among all) 1064
21
Country reputation is highly correlated to
perceptions of SWFs
r2-0.95
saying very important in driving positive
perception of country
saying very important in driving positive
perception of SWF
Base PSB Sovereign Wealth Study (among all) 1064
22
SWF RANKINGS
23
Approval of SWFs investment from different
countries
Q. To what extent do you approve or disapprove of
sovereign wealth funds from the following
countries investing in your country?
Base PSB Sovereign Wealth Study (among all) 1064
24
Cross country approval ratings of SWFs
Q To what extent do you approve or disapprove of
sovereign wealth funds from the following
countries investing in your country? (
strongly/somewhat approve)
Sources of investment All UK Germany US India Egypt Brazil China
Norway 88 97 100 97 79 50 100 96
Singapore 83 95 85 81 100 43 84 97
Hong Kong 83 86 72 79 90 71 83 95
Kuwait 74 74 74 57 59 89 75 85
Dubai 73 55 73 52 78 96 86 66
Abu Dhabi 72 81 74 51 72 100 67 61
Malaysia 69 64 57 54 73 84 75 77
Bahrain 69 67 74 46 60 91 76 71
Qatar 63 57 64 42 49 90 63 75
Russia 62 45 47 49 70 60 78 87
Mexico 62 46 57 69 68 41 82 83
China 62 54 37 50 46 99 81 0
Oman 61 50 53 35 61 77 58 84
Brunei Darussalam 44 46 42 32 39 29 55 65
Kazakhstan 42 14 32 36 32 27 64 72
Libya 35 13 12 16 17 78 63 52
Algeria 33 15 19 34 28 11 52 67
Botswana 33 26 19 25 28 20 48 62
Nigeria 30 11 19 17 16 27 54 58
Base PSB Sovereign (each respondent sees 9 of
19) total 500 approx. Chinese respondents were
not asked about China.
25
CORE REPUTATIONAL METRICS
26
Key SWF metrics transparency and accountability
Q. How important to you are the following factors
in deciding whether you would approve or
disapprove of a sovereign wealth fund investing
in your country and industries?
Very important
Base PSB Sovereign Wealth Study (among all) 1064
27
Sovereign Wealth comparison Transparency
Q. What is your impression of how transparent
these sovereign wealth funds are or would be in
terms of their decision-making compared with
other sources of investment?
Very/somewhat transparent
Base PSB Sovereign Wealth Study (among all)
1064 (respondents see 9 of 19 countries)
28
Sovereign Wealth comparison Accountability
Q. To the best of your knowledge, which of these
factors do you think apply to the following
country sovereign funds accountability? (
Applies)
Very/somewhat transparent
Base PSB Sovereign Wealth Study (among all)
1064 (respondents see 9 of 19 countries)
29
SUMMARY IMPLICATIONS
30
Summary
  • Low familiarity with SWFs driving
  • Low favourability
  • Low trust
  • Underlying concerns, e.g., political agenda
  • Interest increasing through the downturn
  • Less blame for market turmoil
  • Seen as long term investors
  • Accelerating BRIC interest
  • SWF image currently tied to host country image
  • Political, economic stability, rule of law,
    international standards are key drivers for
    country image and therefore SWF approval
  • Transparency and Accountability key SWF metrics
  • Highest performers on key country and SWF
    metrics Norway, Singapore, Hong Kong achieve

31
IMPLICATIONS
32
The competitive challenge
  1. SWFs are set to face greater competition from
    each other as well as other sources of funding
    for the best assets and investments
  2. SWFs may face resistance, and in some cases
    protectionism, founded on continuing concerns
    over their behaviour and
  3. The pace of their adoption of global standards of
    corporate accountability and their ability to
    communicate progress will be a factor in both
    the above

33
The communications challenge
  1. Expectations will increase with importance
  2. Need to act to combat protectionism
  3. Competition for assets will become keen
  4. Building trust at home
  5. Building trust abroad
  6. Country image business inhibitor or competitive
    advantage?

34
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

35
Adopt international standards of corporate
behaviour
36
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

37
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

38
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

39
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

40
Practical strategies for Sovereign Wealth Funds
  • Adopt international standards of corporate
    behaviour
  • Open a real dialogue
  • Build reputation in the round
  • Focus stakeholder and country based
    communication
  • Tackle the country challenge
  • Leaders exceed societal expectations

41
QA AND DISCUSSION
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