Mobilizing the potential of GCC Sovereign Wealth Funds for the Mediterranean Partner Countries - Overview
European Investment Bank (supervision)
External Consultants
The Boston Consulting Group
- Markus Massi, Partner and Managing Director
- Mohamed El Abbouri, Principal

Over the last five years, Sovereign Wealth Funds (SWFs) have played an increasingly important role in
providing capital globally. By attempting to maximize investment returns, SWFs have enhanced their
traditional investment approaches by increasing direct investments, increasing their exposure to selective
emerging markets and diversifying their portfolio across industries. Hand in hand with these developments the
SWFs have built up in-house investment capabilities.
The GCC SWFs are among the largest SWFs in the world with an appetite for direct investments, including
infrastructure investments. However, three challenges limit infrastructure investments by GCC SWFs in the
FEMIP region. Firstly, SWFs seek to invest with equity (instead of debt). Secondly, SWFs favour investments in mature markets and selective emerging markets which provide more stable cash flows with lower regulatory and political liability (e.g. Asia and Latin America). Thirdly, most GCC SWFs require an internal return rate (IRR) of 15% and a minimum equity stake of at least USD 50 million. Despite a healthy pipeline of infrastructure-related projects in Egypt, Jordan, Tunisia and Morocco, only a handful match GCC SWF requirements. This third challenge is even more important as there are investment opportunities in mature markets and in emerging markets (e.g. Asia and Latin America) offering similar yields, while having more stable investment environments.
Since the early 2000s the number of SWFs in the Gulf region has grown substantially. The rise in oil prices
provided the GCC countries with substantial wealth. At the same time, the relatively small size of their
economies and concerns about fuelling inflation meant a large proportion of their revenue had to be invested
abroad and managed through SWFs.
Out of the sixteen SWFs operating in the GCC, eight have been selected to assess the potential for investmentsin infrastructure projects in the Mediterranean partner countries. As shown in table 5, these eight funds wereselected as they are investing directly in infrastructure projects and they are investing beyond their homecountry.

--------------30--------------

This BLOG  looks at pensions and their impact on what are called Public Private Partnerships or P3’s these are not really about private funding at all but about two streams of public funding, pensions and government with private capital a third partner.
We will also deal with other pension matters, such as Defined Contribution Plans (DC) vs Defined Benefit (DB) PLANS, the weakness in private plans, the need for pension reform in public pensions to have shareholder rights, directorships and ethical investment directives and policies. 
Finally taking the long view we will show how these funds are forms of evolving social capital that is dominating private capital as we evolve into socialization of capital. 
Click HERE to read more....