authors' extensive, hands-on involvement in the deals and operations of this little-known world lends vibrancy as they recount practical, illustrative examples in a non-pedantic style. The book benefits from the contrasting backgrounds of its authors. Ma is a Chinese-born Wall Street veteran and was most recently the North America office head of China Investment Corporation (CIC), one of the world's largest sovereign wealth funds. He brings a depth of insight from his background as a lawyer, as a dealmaker, and as an institutional investor. Downs is American, formerly a partner in global law firm Hogan Lovells and has long acted as outside counsel for many sovereign funds across continents, bringing to bear on this book his decades of experience working on deals, governance and training. Together, their unique perspectives and differing approaches have produced a nuanced roadmap to the little known past and exciting prospects of these giants.
The book's timely message is clarion clear: the world's sovereign investors, the “trillion dollar club” in the authors' parlance, have shaken off their traditional, passive investor roles and stepped into the vanguard of the digital transformation we are all living through. No longer simply channeling their trillions through Wall Street handlers, these super asset owners have instead become active ESG guardians, fintech powerhouses, sustainability champions and – the authors propose a new leading role – digital diplomats. Thanks to the authors, we are now able to see clearly the perceived threat and – hopefully – the opportunity they present.
Margaret Franklin, CFA
President and CEO
CFA Institute
Charlottesville, Virginia
Authors' Notes and Acknowledgments
Winston Ma
At the early days of the global financial crisis 2007-2008, I was an investment banker and equity-linked products trader on Wall Street in New York, and China Investment Corporation (CIC), the sovereign wealth fund (SWF) of China, was established in Beijing to manage a part of China's trillion dollar foreign reserve. At that time, SWF was a new entrant to the global capital markets. I was among the first group of overseas hires by CIC, so I moved to Beijing and started the exciting journey with the sovereign investors, in China as well in all continents of Asia, Africa, Australia/Oceania, Europe, North America, and South America.
After 10 years with CIC, in 2019 I moved back home to New York and private capital markets. By then the sovereign funds were already recognized as important participants in the international monetary and financial system. In fact, it was hard to avoid the headlines their activities attract. As such, I have become an adjunct professor at New York University (NYU) School of Law, teaching a course on sovereign investors, capital markets, and regulatory challenges. When I was finalizing the script of this book in the spring of 2020, the coronavirus pandemic broke out, and the sovereign funds, with their massive portfolios of financial assets, were active (again) at the front line of capital markets turmoil and global financial crisis.
Therefore, this book of sovereign investment funds and their global tech investments is added with a new context – world economy downturn and international tensions. A book on such a complex and fast-moving topic would not have been possible if I had not been blessed to partner with an industry leader like Paul, who has practiced international law for more than four decades, and learn from an amazing group of mentors in finance/investments, law and tech.
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My deepest thanks go to Dr. Rita and Gus Hauser, the New York University (NYU) School of Law, and John Sexton, the legendary Dean of NYU Law School when I was pursuing my LL.M degree in Comparative Law. My PE/VC investing, investment banking, and practicing attorney experiences all started with the generous Hauser scholarship in 1997. During his decade-long tenure as the President of NYU, John kindly engaged me at his inaugural President's Global Council as he developed the world's first and only GNU – the “global network university.” My NYU experience was the base for my future career as a global professional working in the cross-border business world.
My sincere appreciation to Mr. Lou Jiwei and Dr. Gao Xi-qing, the inaugural Chairman and President of China Investment Corporation (CIC), for recruiting me at the inception of CIC. One of the most gratifying aspects of being part of CIC is the opportunity to be exposed to a wide range of global financial markets' new developments. The unique platform has brought me to the movers and shakers everywhere in the world, including Silicon Valley projects that linked global tech innovation with the China market.
The same thanks go to Chairman Ding Xue-dong, President Li Ke-ping, and Supervisory Chairman Jing Liqun who I reported to at CIC in recent years. Chairman Jing is now the President of Asian Infrastructure Investment Bank (AIIB). He educated me about the works of Shakespeare, as well as guiding me professionally. The readings of Hamlet, Macbeth, and King Lear improved my English writing skills, and hopefully the writing style of this book is more interesting and engaging than my previous finance textbook “Investing in China.”
For such a dynamic book topic, I benefited from the best market intelligence from a distinctive group of institutional investors, tech entrepreneurs, and business leaders at the World Economic Forum (WEF), especially the fellows at the Council on Long-Term Investing, the Council for Digital Economy and Society, and the Young Global Leaders (YGL) community. Professor Klaus Schwab, founder and executive Chairman of the World Economic Forum, has a tremendous vision of a sustainable, shared digital future for the world, which is an important theme of this book.
The WEF Council on Long-Term Investing has gathered the most forward-thinking leadership from major SWFs and public pensions, and I learned so much from the dynamic discussions with them, including Alison Tarditi (CIO of CSC, Australia), Adrian Orr (CEO of NZ Super, New Zealand), Gert Dijkstra (Chief Strategy of APG, Netherlands), Hiromichi Mizuno (CIO of GPIF, Japan), Jagdeep Singh Bachher (CIO of UC Regents, USA), Jean-Paul Villain (Director of ADIA, UAE), Lars Rohde (CEO of ATP, Denmark), Lim Chow Kiat (CEO of GIC, Singapore), Reuben Jeffery (CEO of Rockefeller & Co., USA), and Scott E. Kalb (CIO of KIC, Korea).
I have a special friendship with the leadership figures at major Canadian pensions, because for a few years I was the Head of CIC North America office based out of Toronto, Canada. Blake Hutcheson (CEO of OMERS/Oxford Properties) was the landlord of my office on the Bay Street. Michael Sabia (CEO of CDPQ), Ron Mock (CEO of OTPP), Andre Bourbonnais (CEO of PSP), and I were together for the investment panel of Bloomberg 2015 Canada Summit. Mark Machin and Mark Wiseman, the current and former CEO of CPPIB, have been friends of long standing and kindly supported my NYU program on SWFs, pensions and other asset owners, for which I am enormously grateful.
My gratitude goes to many other outstanding friends, colleagues, practitioners and academics, who provided expert opinions, feedback, insights and suggestions for improvement. For anecdotes, pointers, and constant reality checks, I turned to them because they were at the front line of industry and business practices. I would particularly like to thank the friends at the West Summit Fund, which I set up at CIC in 2009 for cross-border investments between Silicon Valley and China. For the past 10 years, we had a fun journey together.
Special thanks to Frank Guarini (NYU'50, LL.M.'55), the seven-term New Jersey congressman and a long-term friend from the NYU law school community. With incredible vision and generosity, he continues to give me invaluable guidance, even when he is in his 90s. The time with this admirable leader has reshaped my way of thinking as well as me as a person. He has been a tremendous mentor and I thank him for continuously being a great cheerleader.
On its journey from a collection of ideas and themes to a coherent book, the manuscript went through multiple iterations and a meticulous editorial and review process by the John Wiley team led by the book commissioning editor Gemma Valler. Our long-term collaboration started with
