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Singapore's Temasek Holdings and Norway's Finance Ministry have made their testimony to the US Congress.
They are two of the world's largest sovereign wealth funds. This is the first time that sovereign wealth funds have been invited to appear on Capitol Hill.
Both funds sought to allay fears that recent large cash injections into the US could be non-commercially motivated. They stressed that they sought only commercial gains from their investments and are transparent in their operations.
American President Lines (APL) operates ports in three western states and is the US Defence Department's second largest cargo carrier.
This in itself may hardly raise an eyebrow, but APL is owned by Neptune Orient Lines, which is in turn two-thirds owned by Singapore's Temasek Holdings.
There have been concerns in the US that strategic national assets like these are being controlled by a foreign country. In a testimony before Congress, Temasek's Executive Director Simon Israel stressed that the fund's over-riding consideration is commercial.
He said: "Temasek fully appreciates and supports the Congress's goal to maintain the right balance in protecting national security in ways that continue the traditional welcoming attitude of the United States towards foreign investment."
Temasek was also set up with the aim of separating "the regulatory and policy making function of the government from its role as a shareholder of commercial entities".
Temasek stressed that it places emphasis on good institutional governance, invests in long-term emerging trends and is also a good corporate citizen. The investment firm does not discuss its investment and divestment activities with the Singapore government, and invests on a commercial basis.
Amid calls for greater transparency, the International Monetary Fund is working on a voluntary code of conduct for sovereign wealth funds. Both Temasek and Singapore's other sovereign fund - the Government of Singapore Investment Corporation - have expressed support for the move.
In recent months, Singapore's top ministers have weighed in on the debate, including Prime Minister Lee Hsien Loong, Senior Minister Goh Chok Tong and Minister Mentor Lee Kuan Yew. They also pointed out that GIC and Temasek were transparent in their disclosures and pursued long-term returns.
Concerns over sovereign funds are more commonly directed at countries like China, Russia, and Middle Eastern states.
David McCormick, US Treasury Department's Under-secretary for International Affairs, noted that funds "are increasingly aware that the increase in the number and size of these funds has... raised reputational issues for them all".
Regardless, it is apparent to many that such funds have been a critical source of support to banks affected by the sub-prime loans crisis. In all, about US$30 billion have been pumped into banks like Citigroup, Merrill Lynch and UBS.
Sovereign wealth funds are increasingly common government vehicles that seek to preserve surplus money through long term investments. Together, these 40 or so funds worldwide are estimated to control about US$2.5 trillion in assets. That amount is projected to hit US$12 trillion by 2015.
Temasek has about US$110 billion in assets and owns stakes in many US companies. The investment company has two Americans on its advisory board, according to Mr Israel.
They are William McDonough, a former president of the Federal Reserve Bank of New York, and David Bonderman, founder of the private equity firm Texas Pacific Group. - CNA/ch
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