A newly-formed NZ government-backed research consortium will review Pacific Island sovereign wealth funds (SWF) as part of an in-depth study of the region.
The SWF review is one of five initial projects targeted by the NZ Institute for Pacific Research (NZIPR), which launched late last month under the auspices of the Ministry of Foreign Affairs and Trade (MFAT).
Aaron Drew, co-leader of the SWF project, said the Pacific Island funds covered by the study – including Papua New Guinea, Samoa, Kiribati and Tuvalu – have supported the initiative.
“Many of the [Pacific SWFs] recognise there is a need to improve in areas such as governance, legislation and transparency,” Drew said.
He said there was an almost “complete bifurcation” in the investment strategies adopted by the various Pacific Island SWFs.
“Some SWFs have decided that their own markets are too small to invest in so they put everything offshore,” Drew said. “Or else the invest mostly at home because they think no-one else will invest in their economies.
“Part of our research will be to establish if there is a better balance in how the Pacific SWFs invest.”
The NZPIR website says the SWF research will produce recommendations “for best practice, and [an] implementation plan”.
Drew, who is also helping with the NZPIR private sector investment project, said the SWF report may be presented at the International Forum of Sovereign Wealth Funds conference scheduled for Auckland this November.
The organisation was formed to “promote and support excellence in Pacific Research”, according to the NZPIR website.
NZPIR taps into the academic resources of three NZ universities as well as a broader network of regional institutions including the Australian National University (ANU).
The privately-owned New Zealand Institute of Economic Research (NZIER) acts as the “execution partner”, Drew said.
Prior to his current roles as NZIER principal economist and chief investment officer for Hastings-based advisory firm Stewart Financial Group, Drew was head of macro-strategy for the NZ Superannuation Fund.