Sovereign wealth funds seen a boon to UK asset mgt

By Laurence Fletcher

LONDON, March 10 (Reuters) - Sovereign wealth funds present little threat to the fund management industry, despite fears over their strategic intentions, but rather offer opportunities for asset growth, British fund executives said on Monday.

Sovereign funds, which in total run an estimated $1.9 trillion to $2.9 trillion, such as Temasek and the Government of Singapore Investment Corp (GIC) have made high-profile investments in U.S. financial institutions such as Citigroup (C.N: Quote, Profile, Research) and Merrill Lynch (MER.N: Quote, Profile, Research), who sought billions of dollars after suffering huge subprime-related losses.

The investments have raised concerns that foreign governments might be investing for political rather than financial gain, and might at some point use those stakes to advance their own national interests.

However, speaking at the Future of Fund Management conference in London, Robin Geffen, managing director of Neptune Investment Management, said he would welcome investment by sovereign wealth funds either in the firm's funds or in the firm itself. "We have absolutely no fear of them at all ... We'd be delighted to have them as clients. They show every sign of wanting to tap into Western expertise, as in the case of Blackstone (BX.N: Quote, Profile, Research) (in which China Investment Corp made a $3 billion investment)," he said.

"We hope to get calls saying they want to invest, or maybe buy a small stake in us." Last week U.S. officials testifying before a U.S. House of Representatives financial services subcommittee said sovereign wealth funds were a good thing but could be more transparent.

Edward Bonham Carter, chief executive and chief investment officer of Jupiter Asset Management, said London should benefit as foreign governments look to learn from its position as a hub for the funds industry.

"A lot of them (sovereign wealth funds) have been around for a very long time. It's just that we've only noticed them recently. By and large they want to make good risk-adjusted returns for investors.

"Will they have an effect on the asset management industry? I'm sure they will, but I think it will largely be positive ... In London at the moment there's a lot of expertise in fund management ... and people want to learn about that expertise."