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Sovereign Wealth FundsLegitimacy, Governance, and Global Power$
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Gordon L. Clark, Adam D. Dixon, and Ashby H.B. Monk

Print publication date: 2013

Print ISBN-13: 9780691142296

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691142296.001.0001

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The Virtues of Long-Term Commitment: Australia’s Future Fund

The Virtues of Long-Term Commitment: Australia’s Future Fund

(p.46) 4 The Virtues of Long-Term Commitment: Australia’s Future Fund
Sovereign Wealth Funds

Gordon L. Clark

Adam D. Dixon

Ashby H. B. Monk

Princeton University Press

This chapter presents the first case study, looking past the geopolitical concerns that have plagued sovereign wealth funds (SWFs) and focusing on the competing domestic political interests embedded in sponsoring countries. In other words, the chapter examines the domestic, political claims on SWFs and the principles and practice of governance used to discipline those interests. It shows that there is an ever-present temptation that faces SWF sponsors: the option of spending the assets for current political advantage. Through the case study of Australia's Future Fund (FF), it examines how governance can, in effect, tame political temptation. Indeed, the Australian government specifically addressed the question of political temptation in its design of its SWF. The chapter focuses on the principles used to design the FF and references recent research on the principles of best-practice investment management.

Keywords:   sovereign wealth funds, domestic politics, governance, Australia, Future Fund, political temptation, investment management

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