23 March 2012Dr. Adam Dixon has been awarded a small grant from the British Academy to investigate the locational and organisational dynamics of sovereign wealth fund (SWF) development outside of traditional financial centres in cities and states without any past claims to the global finance industry.
The project's main contention, which will be done in collaboration with Dr. Ashby Monk of Stanford University, is that SWFs and other large public institutional investors are finding novel ways of overcoming the asymmetric information, access and monitoring problems associated with investing at a distance through collaboration and co-investment with similar funds elsewhere. However, it is not clear whether and how these funds are attracting and retaining the required human capital to reduce their reliance on external asset managers and complementary services in the major financial centres. In effect, while the dramatic rise of SWFs outside the major financial centres suggests the potential of a ‘window of locational opportunity’ for partially remaking the map of global finance and investment management, a number of challenges remain.