Assets under management by public funds, including sovereign wealth funds and sovereign pension funds, continues to grow at a strong pace. As funds grow larger and new sovereign funds come into the market, the identification of suitable investments in an increasingly crowded marketplace becomes correspondingly more difficult. The universe of potential investments is narrowed by a trust deficit between many sovereign funds and the regulators in countries in which these funds invest; this trust

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... ficit can result in higher transactional costs that price public funds out of the market, or can create unacceptably high regulatory risks that deter funds from considering certain investments. Because transparency can foster trust, this paper seeks to remedy the trust deficit by outlining a disclosure framework for investment policies that are most relevant to recipient country regulators.