The Financial Committee of Sovereign Wealth Funds (FC) met for the fourth time this year on Friday July 13th, 2018. On this opportunity, the FC reviewed the implementation status of the new strategic investment policy for the Pension Reserve Fund (PRF), among other topics.
In particular, the FC Secretariat informed FC members about the hiring of RVK, Inc. (RVK) which occurred earlier in May this year. This consulting firm will support the Central Bank of Chile in the external managers’ selection process, required to implement the new investment policy of the PRF. RVK will also collaborate supervising the current and future managers of Chile’s Sovereign Wealth Funds. RVK was chosen through a selection process carried out by the Central Bank of Chile in its role as Fiscal Agent of the Sovereign Wealth Funds following best international practices.
FC members reviewed the different stages of the external managers’ selection process which is being carried out for the US Agency MBS mandate and the Global High Yield Bonds mandate. These mandates are expected to be implemented at the beginning of 2019. In this context, the FC approved a new version of the investment guidelines for both asset classes which included RVK’s feedback.
The FC was informed about the Ministry of Finance’s decision to carry out a new study on the investment policy for the Economic and Social Stabilization Fund (ESSF). This decision took into account the time elapsed since the last study, which was carried out in 2011, and also the best investment practices which recommend periodical reviews.
Finally, FC members analyzed the performance of the entities responsible for managing the investments of the Sovereign Wealth Funds as well as their main exposures.
The FC, which is external and autonomous, is composed of six professionals and experts with vast experience: Jose De Gregorio (Chairman), Cristian Eyzaguirre (Vice Chair), Ricardo Budinich, Jaime Casassus, Martín Costabal and Igal Magendzo.