Oman poised as global investment hub

MUSCAT: The Sultanate of Oman will host the largest-ever assembly of sovereign wealth funds (SWFs) as Muscat becomes the focal point of the global investment community from November 3 to 6. This International Forum of Sovereign Wealth Funds (IFSWF) gathering, organised by the Oman Investment Authority (OIA), will bring together heads and members from over fifty sovereign wealth funds across forty-six countries. It marks a pivotal moment for Oman’s aspirations to strengthen its position on the global investment map, with a conference featuring prominent speakers, including Tesla and SpaceX CEO Elon Musk, and influential investors such as Robert Smith, the wealthiest African-American in the US.

The event promises to be a landmark in Oman’s journey toward diversifying its economy, fostering international partnerships, and attracting foreign capital. Speaking ahead of the event, Duncan Bonfield, Chief Executive of IFSWF Secretariat, in an exclusive interview with Oman Observer, highlighted the significance of Oman’s hosting role, emphasising its value as a platform for SWFs to network, collaborate, and share knowledge.

ENHANCING OMAN'S GLOBAL POSITION

Bonfield explained that hosting the IFSWF conference would amplify Oman’s visibility and reinforce its investment-friendly image internationally. “It’s a showcase not only for Oman but also for the Oman Investment Authority and the companies under its umbrella. Exposure to some of the world’s leading investors is certainly beneficial,” he said. However, Bonfield cautioned against expecting immediate financial returns, suggesting instead that the event is a strategic step in Oman’s long-term goal of enhancing its global reputation.

This reputation-building aligns well with Oman's political stability and governance standards, qualities that are attractive to global investors. “Oman is a well-governed country with a high degree of political stability,” he added. “That’s always appealing for international investors looking for secure, stable environments.”

ADOPTING AND STRENGTHENING GOVERNANCE STANDARDS

The IFSWF’s Santiago Principles, a voluntary set of standards promoting governance, transparency, and accountability among SWFs, will also take centrestage during the event. These principles are essential for members, allowing them to balance operational transparency with the confidentiality inherent to sovereign wealth management. Bonfield highlighted the forum’s role in promoting these principles, stating, “We help funds by allowing them to interact at events like this. They learn from each other about best practices and innovations in governance.”

A specific session on governance is scheduled during the conference, where members will explore trends and discuss effective implementations of the Santiago Principles. For Oman, this focus on transparency and governance is likely to enhance its attractiveness to international investors, who often prioritize these standards when evaluating investment opportunities.

SPOTLIGHTING KEY INVESTMENT SECTORS

Oman’s emerging sectors will be showcased to the assembled SWFs, including advanced technology and green hydrogen. These areas align closely with OIA’s priorities and Oman’s Vision 2040 economic diversification plan. Bonfield noted that the focus on sectors like technology and hydrogen reflects Oman’s commitment to sustainable development and aligns with global investment trends. “There’s a number of sectors, not just focused on Oman, but technology and green hydrogen are certainly areas where Oman is very involved,” he remarked.

Highlighting Oman’s green hydrogen initiatives is particularly timely, as Oman aims to establish itself as a key player in the renewable energy sector. The green hydrogen industry, backed by international partnerships and substantial investments, could serve as a lucrative opportunity for SWFs interested in environmentally responsible projects.

BALANCING TRANSPARENCY WITH CONFIDENTIALITY

With SWFs managing considerable resources on behalf of their citizens, transparency remains a critical topic. Yet, the Santiago Principles allow SWFs to operate within the legal frameworks of their respective countries, often imposing confidentiality on aspects like asset size. Addressing this, Bonfield noted, “Domestic law comes first... However, sovereign wealth funds today publish a lot more information about their activities and engage more with their citizens.”

This balancing act between transparency and confidentiality, according to Bonfield, is more about long-term trends than immediate shifts. The event will explore how SWFs can continue increasing transparency while respecting local regulations, thereby fostering trust with their home countries’ populations.

FOSTERING COLLABORATION AMONG SOVEREIGN WEALTH FUNDS

The gathering also underscores IFSWF’s objectives to encourage collaboration, knowledge sharing, and co-investment among SWFs. Through initiatives like this forum, IFSWF aims to facilitate a global investment environment where capital flows freely, maximizing returns for citizens. Bonfield outlined IFSWF’s strategic priorities: “We try to help our members cooperate, collaborate, and ultimately co-invest if they choose to... so the returns to their citizens are maximised.”

The willingness to co-invest in projects across borders strengthens the position of SWFs as crucial players in global economic development. For Oman, building relationships with these influential funds could translate into significant opportunities in sectors like renewable energy, logistics, and technology.

A LANDMARK FOR OMAN'S INVESTMENT FUTURE

With Oman set to welcome such an influential gathering, the IFSWF conference could prove transformational for the nation’s investment landscape. The event reflects OIA’s strategy of attracting capital by enhancing transparency, adopting best governance practices, and showcasing Oman’s emerging sectors. As sovereign wealth fund executives gather in Muscat, Oman’s position as a viable, stable, and forward-looking investment destination is likely to receive a substantial boost.

The IFSWF gathering will not only establish new opportunities for Oman but also foster international partnerships that could yield long-term economic dividends. For Oman, this marks a significant step in aligning its national objectives with the broader aspirations of the global sovereign wealth fund community.