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 my 2016 book China's Mobile Economy (among “best 2016 business books for CIOs” by i-CIO.com), and we are working together on another new book “The Digital Woe” as a sequel (forthcoming December 2020). The managing editor Purvi Patel and copyeditor Caroline McPherson contributed substantially to the final shape of the book. Special thanks to Gladys Ganaden for her design of the book cover and figures.
And last in the lineup but first in my heart, I thank my wife, Angela Ju-hsin Pan, who gave me love and support. You are a true partner in helping me frame and create this work. Thank you for the patience you had while I wrecked our weekends and evenings working on this book.
Acknowledgements
Paul Downs
A global pandemic puts much in perspective, summoning gratitude to the fore. As I write this in quarantine, the only sounds punctuating the odd, pervasive silence of Manhattan are the sirens of the first responders. It is to them I must first acknowledge gratitude. Together with those who are keeping the logistics of food, medical care and basic services functioning as I sit safely at my laptop living the digital transformation that is the focus of this work.
Many others have been instrumental in bringing this book to fruition. My colleagues in the practice of law have imparted the knowledge on this topic that is not to be found in the server racks of the internet. Two, in particular, aided my understanding of the world portrayed in this book: Brett Dick, who authored the go-to book on the US tax treatment of sovereign investors and his successor in that role, Babak Nikravesh, who also accompanied me on countless visits to many of the sovereign investors who fill these pages, always offering insight and good company.
Thanks are due as well to Hogan Lovells who made possible the annual Sovereign Investor Conference that brought together thought leaders from the sovereign investors featured in this book. The panel participants and keynote speakers provided valuable, empirical insights to the themes of this book.
Reaching back in time, I must also recognize the contribution of two professors who contributed to my appreciation of international business transactions: Hal Scott, whose course at Harvard Law School provided the building