Legal Framework
TABLE 3.3
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55
Common features of primary SIF legislation: Operational elements
KEY ELEMENTS IN SIF-SPECIFIC LEGISLATION
IRELAND STRATEGIC INVESTMENT FUND
NIGERIA SOVEREIGN INVESTMENT AUTHORITY
MUBADALA INVESTMENT COMPANY
GAPP 10: Clearly define accountability framework for SWF’s operations in relevant legislation, charter, other constitutive documents, or management agreement. GAPP 16: Publicly disclose governance framework and objectives, as well as how SWF’s management is operationally independent from owner. GAPP 13: Clearly define professional and ethical standards and disclose it to members of SWF’s governing body(ies), management, and staff. Governance
Governing bodies
Agency board, CEO
Governing council, board, CEO, and executive management
Executive council, board of directors for company, board of directors for fund, managing group with managing director
Constitution, tenure of board members, and hiring of board (selection and criteria)a
9 members (3 government, 6 independent) appointed by Minister for Finance; 5-year terms and no more than 2 consecutive terms
9 members (3 executive, 6 independent) appointed by nomination committee; 4-year terms for nonexecutive directors and chairman, max. of 2 termsb
At least 5 members, including managing director and chairman; 4-year terms, renewed automatically unless Amiri Decree issued for reformation
CEO selection
NTMA CEO appointed by minister
Appointed by president
Appointed by board
Committees
Investment committee at minimum and other committees as considered appropriate by NTMA
At minimum, board must establish compensation committee, audit committee, and risk management committee.
Board may form committees composed of own members or third parties; Establishment Law does not mandate formation of any committees.c
GAPP 19: Investment decisions should maximize risk-adjusted financial returns consistent with investment policy and based on economic and financial grounds. GAPP 19.1: Clearly articulate in the investment policy, and publicly disclose, if investment decisions are subject to other than economic and financial considerations. Investment policy Alignment with national priorities
Investment strategy in accordance with mandate “to support economic activity and employment” and other functions in NTMA Act 2014, Section 39
NIF investments must to extent possible be aligned/consistent with “infrastructure priorities and plans developed by the appropriate ministries and agencies with responsibilities over the particular infrastructure asset sector.”
In alignment with Abu Dhabi’s “Vision 2030, the long-term plan for the transformation of Abu Dhabi’s economy, with a focus on knowledge-based industries and a reduced reliance on oil”
Double bottom line mandate
Must invest assets on a commercial basis in a manner designed to support economic activity and employment in Ireland; financial return target: >cost of Irish government debt.
Invest in infrastructure sectors that Economic diversification and contribute to growth and sustainability are key diversification of economy; principles. long-term return benchmark: US CPI + 3%. Allow 10% of investment in any fiscal year for social infrastructure projects with possibly lower financial returns.
Provisions on co-investment/ co-investors
Co-investment, joint ventures, partnerships permittedd
Co-investment permitted
Permits “participation with others”
GAPP 19.2: Manage SWF assets in a manner consistent with sound asset management principles. Investment strategy
Eligible investments / targeted sectors
Except for specific circumstances, may not directly invest in fossil fuel undertakings; indirect investment cannot invest more than 15% in fossil fuel undertaking.
Primarily infrastructure assets
Broad range of activities permitted
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