Sovereign Wealth Funds: The Good Guy Investment Actors?
George Gilligan, Justin O’Brien and Megan Bowman*


ABSTRACT

Sovereign wealth funds (SWFs) have been portrayed in some quarters as potential bad guys 
in global financial markets due to their supposed political as opposed to commercial 
intentions and influence. However, two key international developments during and since the 
2008/2009 Global Financial Crisis have prompted some abatement in the hostility and 
mistrust displayed towards SWFs. First, SWFs provide substantial and growing sources of 
much-needed liquidity in global capital markets. Secondly, the Generally Agreed Principles 
and Practices – GAPP (The Santiago Principles) were created in 2008, which are a 
multilateral initiative to directly address governance issues associated with SWFs. Thus, 
SWFs have become a more accepted element of global financial markets and more is now 
known about how they operate and where their investment priorities tend to lie. However, 
there is still much to learn about the important roles that SWFs are likely to play in global 
markets, particularly how they may contribute to the public good. Accordingly, this article 
considers the good guy potential of SWFs by elucidating how SWFs may not only be a 
facilitative economic mechanism but also an important tool for societal benefit. In so doing, 
this article focuses on the role that they might play in domestic investment in order to 
stimulate the growth of social capital and nation building in their home country, as well as 
progress made by SWFs themselves to improving their standards and processes of 
governance