Executive Decision - March/April 2008 - (Page 29)

strategies Investments from sovereign wealth funds in United States corporations may require regulatory approval. For instance, the Committee for Foreign Investment in the United States (CFIUS) may have to give a stamp of approval if the industry relates to military, national security or technology, or, other fields. Some investments in banks may require regulatory approval from the Federal Reserve. Sovereign wealth funds are—for the most part—like everyone else: They want to make money. In this way, they are similar to pension funds or private equity funds. The individuals running the funds are professionals—as is the case with other types of funds. You treat them like anyone else. But the political dimension could make them different. Sovereign wealth funds tend to have a longer time horizon to see return on their investment. It is not the more typical three to five years. This may benefit some companies. You may be better going through an investment bank with whom you already have an existing relationship—to reach out to representatives from sovereign wealth funds when you are looking for potential investment. Otherwise, to get in front of Bigger companies can make presentations themselves. They may have a team in place and may already be familiar with the part of the world where they are making the pitch. It is very important for companies trying to raise cash to have good advice—both legal and banking. Each country is different. Each fund needs to be assessed on its own. For instance, in Middle Eastern countries and in Singapore there may be an interest mainly in finance. But with the Chinese, there may be additional issues of government Party control as well as military control. Be wary about the potential resurgence of protectionism in the United States. There could also be greater scrutiny of sovereign wealth funds by regulatory bodies. Both Sen. Hillary Clinton and Sen. Barack Obama, the leading candidates for the Democratic nomination for president, have made public comments about sovereign wealth funds—urging for more transparency and greater scrutiny. America’s relatively strong devotion to free trade could start to slip, particularly if the economic crunch continues. XD TA K E AWAY VA L U E TV A TM Sovereign Wealth Funds 1. Sovereign wealth funds tend to have a longer time horizon to see a return on investment. 2. Investments from sovereign wealth funds in United States corporations may require regulatory approval. people representing the sovereign wealth fund can take a considerable amount of time. A senior officer of your company, such as a chief 3. financial officer, treasurer or board member would have to lead the conversation. You really need to have someone who knows what they are doing on tactics and financial issues. Or, you may run into problems when presenting your case. Each country is different. Each fund needs to be assessed on its own. 4. Be wary about the potential resurgence of protectionism in the United States. EXECUTIVE DECISION I March-April 2008 29

Table of Contents Feed for the Digital Edition of Executive Decision - March/April 2008

Executive Decision - March/April 2008 Contents Index of Advertisers Contributing Editors From the Editor's Desk Publisher's Note You Be the Judge - Unionization Thought Leader - Pitney Bowes Management - Flying High for Long-Term Results Strategies - Sovereign Wealth Funds Cover Story - In Whom Do We Trust? The Movement for Greater Accountability & Disclosure Finance/Legal - The New Boycott Model Green At Work - Transforming for Sustainability Technology - Embracing Risk Leadership - Executive Reputation Management The Global Village - China Moves to Curb Prices Economic Profile - California Gold Rush Transformations - I Can See Clearly Now, The Brain Is Gone Marketing - Effectively Using Market Research The Bottom Line - Brands: A Shrinking Advantage or Shifting Advantage? Pulse - Pandemic: Not If But When SPECIAL SECTION - Living On the Green: Luxury Golf Destinations

Executive Decision - March/April 2008

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