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Scoring the Santiago Principles as they turn 10

The Santiago Principles have elevated governance in sovereign wealth funds – but not consistently across its membership.


Among the many crisis-related anniversaries that are passing by in October, one should not be forgotten

On October 11 it will be 10 years since a press conference at the IMF annual meeting in Washington DC unveiled the Santiago Principles, designed to reframe international perceptions of sovereign wealth funds around the world and to elevate them to a greater level of governance. 

It is a useful moment to take stock of what they did and didn’t achieve, and what ought to come next. Indeed, the constituents of the Santiago Principles have produced a study themselves evaluating the last 10 years.

First the plus side. 

It is easy to forget now the scale of suspicion that existed around sovereign wealth through 2007 and early 2008. The oil price was high, foreign exchange reserves were soaring and these little-understood state vehicles were placing more and more of their assets across borders, notably in the US. Who were they and what were their intentions?

Initial design

The Santiago Principles, which grew originally from US Treasury official Clay Lowery asking Singapore’s GIC and the Abu Dhabi Investment Authority (ADIA) to help draft a combined statement of practices, were initially designed to reassure the world that these vast funds understood their systemic significance and would behave accordingly. 

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