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Welcome remarks:

John Orchard Chief Executive Officer OMFIF

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Keynote Address:

Frank Scheidig Global Head of Senior Executive Banking DZ Bank

Moderator

Ludger Schuknecht Deputy Secretary-General, Fiscal Policy and International Financial and Monetary Policy OECD

Speaker

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Presentation of key findings:

Danae Kyriakopoulou Chief Economist & Director, Research OMFIF

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Total global public assets rise across all institution types, by a joint $1.9tn

Assets under management of GPI 750, by institution type, $tn

13.1 12.3 12.1 13.4 13.5 14.1 14.4 14.0 14.5 15.5 16.0 17.0 6.3 6.9 7.1 7.4 8.1 8.3 5 10 15 20 25 30 35 40 45 End-2014 End-2015 End-2016 End-2017 End-2018 End-2019 Central banks Pension funds Sovereign funds

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European GPIs biggest winners, Chinese fund holdings fall

Assets under management of GPI 750, by region, $tn

2 4 6 8 10 12 14 16 Asia Pacific North America Europe Middle East Latin America Caribbean Africa End-2014 End-2015 End-2016 End-2017 End-2018 End-2019

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Five funds responsible for almost a third of total increase

Increase in total assets, 2018-19, $bn and % of total

GPIF, NBIM, CBR, ABP, and MRF, $571.3bn 30% Remaining Top 10 funds, $334.9bn 18% 11-750, $965.4bn 52%

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Booming stock market and rising gold price contribute to increases

Jan 2019=100

90 95 100 105 110 115 120 125 130 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 S&P 500 Euro Stoxx 50 FTSE 100 Gold price ($/t oz) Source: Refinitiv Eikon, OMFIF analysis

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But US bull market also takes global imbalances to new heights

Net international investment positions, creditors vs debtors, % of global GDP

• 25%
• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 20% 25% 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Creditors Debtors

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Gains most prominent for GPIs that have diversified into equities

Comparison of asset composition of GPIs covered in allocation analysis, % of total portfolio

51.9 66.3 18.9 45.4 22.3 8.0 51.7 30.4 9.9 11.0 5.8 10.3 4.1 0.1 12.3 6.4 3.0 5.7 0.4 2.8 3.9 0.7 2.1 2.6 0.4 9.2 2.9 3.3 4.5 1.4 2.3 10 20 30 40 50 60 70 80 90 100 Allocation Central banks Sovereign funds Pension funds Government bonds Equities Corporate bonds Real assets** Gold Other

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** Includes real estate, infrastructure and private equity

This has primarily been motivated by low yields on traditional assets

‘How has the low level of yields on traditional reserves assets in recent years affected your decision-making?’, % of responses

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Others We have reduced our risk budget as risk is no longer properly compensated We have reduced our reserves as holding reserves is costly for us (ie. our reserves have negative carry) We have tried to maintain the absolute level of return by increasing the size of the reserves Our decision making has not been affected We have tried to maintain the absolute level of return by increasing

• ur risk budget/diversifying into higher yielding assets

We have maintained our traditional risk approach and have accepted a lower return Pension funds Sovereign funds Central banks

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But looking ahead, flight to safety is expected

‘In the next 12-24 months do you plan to increase, reduce or maintain your allocation?’, % of responses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cash Gold Other Real estate Infrastructure Corporate bonds Government bonds Equities Significantly increase Increase Stay the same Reduce Significantly reduce

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Global economic uncertainty raises dollar popularity

‘In the next 12-24 months do you plan to increase, reduce or maintain your exposure?’, % of responses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% GBP CHF JPY EMFX CNY USD EUR Significantly increase Increase Stay the same Reduce Significantly reduce

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Overall little appetite for digital currency baskets

‘Would you be open to using a sovereign digital basket of currencies/SDR in a greater share of your reserves?’, % of responses

13% 11% 88% 89% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Pension funds Central banks Sovereign funds Yes No

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Weighting safety and risk (1): GPIs seek returns in technology investments

‘What has been the motivation behind any potential investments in the technology sector?’, % of responses

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Following Leaders/trends Remaining competitive Development mandate (e.g. support domestic innovation) Preparing for disruption risks Other High Returns

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Weighting safety and risk (2): GPIs seek to understand foreign markets

Number of institutions with offices or representation, 2019

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GPIs rediscover public ethos (1): Focus on sustainability

‘How do you rank the following risks as material to your investment in the horizon of the next 10 years?’, % of responses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Social risks Governance risks Localised environmental risks Geopolitical risks Financial risks Systemic environmental risks Very Important Important Moderately Important Low Importance Not at all important

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GPIs rediscover public ethos (2): Public engagement through art

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GPIs rediscover public ethos (3): Supporting government pandemic responses

Selected examples of sovereign fund responses to the Covid-19 crisis

1. Government drawing on sovereign fund reserves to finance Covid-19 response or sovereign fund buying local currency to support its value and provide funds to government: Azerbaijan, Chile, Nigeria, Norway 2. Central bank transferring funds to sovereign fund to enable flexible investments: Saudi Arabia 3. Sovereign funds directly supporting struggling industries, e.g. airlines: Singapore, Malaysia, United Arab Emirates, Turkey 4. Sovereign funds issuing bonds to fight the pandemic: Italy, France 5. Creation of special pandemic-focused vehicles and funds: US, Ireland 6. Donations/investments in healthcare: Russia, Malaysia

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Keynote Address:

Anshula Kant Managing Director and CFO The World Bank Group

Speaker

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Panel discussion:

David Marsh Chairman OMFIF

Moderator

Sevinc Acar Investment Director PGGM

Speakers

Christopher Smart Chief Global Strategist and Head Barings Investment Institute Luigi Federico Signorini Deputy Governor Banca d'Italia Martin Wieland Head of Market Intelligence Division Bundesbank Didier Borowski Head of Global Views Amundi

First Respondent

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Closing remarks:

Frances Barney Managing Director and Head of Global Risk Solutions BNY Mellon

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Thank you for joining. To download the report please visit

• mfif.org/gpi2020