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February 17, 2008

"China Investment Corp. is Most To-Be-Feared SWF"

Breakingviews.com has created a "Risk Index" that ranks the top 20 prominent Sovereign Wealth Funds (SWFs)" according to the potential risk they present to western interests". The index scores each fund on three criteria: Transparency (or the lack of it), Strategic Control (or the intent to acquire) and Political Threat. The higher the no. of points, higher the risk.

China Investment Corporation, the giant $200bn fund that recently acquired stakes in Morgan Stanley and Blackstone is top with 11 points. Anything in double digits is considered a high potential risk to western investor interests. But only two other funds are placed in this category: the Qatar Investment Authority and Venezuela's National Development Corporation both scored 10 points. All three scored high marks for lack of transparency.


Interestingly, the SWFs active in India - GIC & Temasek (Singapore), Istithmar (Dubai), Dubai International Capital and Khazanah Nasional (Malaysia) - figure quite low on the list. Click Here to read what Breakingviews.com has to say about them.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.