Prakash Mehta Quoted by Law360 on Best Practices for Counseling Sovereign Wealth Funds
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Akin Gump investment management practice co-leader Prakash Mehta has been quoted by Law360 for its article “What Attys Must Know To Steer Sovereign Wealth Funds.”
The article discusses the size and market impact of sovereign wealth funds (SWFs) and the challenges in finding a single way to advise these investment vehicles.
Mehta noted that there is no set strategy because no two SWFs are alike, adding that the adage about family offices’ uniqueness—“if you’ve met one family office then you’ve met one family office”—is equally applicable to SWFs.
He said that lawyers advising these funds need to learn why the fund was set up. Mehta noted that one of the most common reasons for these state-owned investment vehicles is to diversify from a resource-oriented economy.
Returning to the “why” of an SWF’s establishment, he stressed knowing the fund’s endgame: “The first thing to do is step back and say ‘Okay, what is the sovereign wealth fund in question trying to achieve?’”
One thing that lawyers need to understand as part of this inquiry, Mehta said, is which industries the fund is interested in, such as technology or infrastructure projects. He went on to note that funds are “largely sector-agnostic” and will look for opportunities that will provide the desired returns in a given asset class.
