The Road to the SDGs

comprising a global equity smart beta strategy, a private equity growth strategy, a broad sukuk strategy and a low-duration sukuk strategy. So far, the project has achieved positive returns, both relative to the benchmark portfolio and in absolute terms. X IsDB selected Cambridge Associates as an Outsourced Chief Investment Officer for the Waqf Fund. Cambridge Associates will manage a large part of the Waqf Fund by constructing a portfolio through best-in-class fund managers in the public equity, Real Estate Investment Trust and Shariah- compliant Fixed Income space. The mandate will see Cambridge Associates appoint passive and active public strategies, combining both separately managed accounts and co-mingled fund vehicles to meet the return objectives of the Waqf Fund. X INV has selected world-class asset managers and top-tier fiduciary managers to implement the overall IsDB-related fund investments portfolio using innovative open architecture, with respect to cost optimisation and superior return objectives. X To enable the asset management model, IsDB has procured global custody and reporting services for the Waqf Fund, Pension Fund, and ISFD. This project culminated in appointing two global custodians, HSBC and SocGen, for the safekeeping and servicing of assets of the Funds as well as other required services relating to compliance, accounting and reporting. X With both HSBC and SocGen on board, IsDB will be able to ensure access to global markets and encourage a high quality of service —a key consideration in enabling the strategic shift towards the asset management model. Specifically, with the global custodian on board, IsDB can rapidly scale up its investment operations capabilities to match the substantially more complex back-office operations required to support active, globally diversified investment strategies employed by EFMs. Further, the custodian banks provide IsDB with analytic and reporting functionalities for portfolio monitoring and evaluation, namely performance attribution, risk reporting, compliance, and fund accounting and reporting services. X IsDB followed a prudent and meticulous procurement and selection process in the hiring of the global custodians. Thomas Murray, a custody procurement specialist advisor, was appointed to manage the RFP process. INV convened a bid evaluation committee, with representatives from all the relevant departments (FCD, RMD, IMDT and Treasury), to evaluate and select the global custodian. ACHIEVEMENTS X IsDB has successfully developed the investment policies of Waqf Fund, Pension Fund and ISFD. Strong investment policies are now in place for all the funds and are now being implemented. X The reform package of the Waqf Fund has been pushed forward with the appointment of Cambridge Associates, who will deliver on the terms of the IMA and achieve superior returns for the Fund. X IsDB successfully implemented a multi-asset portfolio for the STI Transform Fund. This first-of-a- kind project for IsDB has seen it procure a global custody solution for the STI Transform Fund from Standard Chartered that enabled the investment of the endowed capital of the Transform Fund with Franklin Templeton. The investment performance in 2020 is encouraging and IsDB is on track to achieve the medium-term return objective of the Fund. INVESTMENT X IsDB will be able to boost returns on the investments of all the related funds (ISFD, Waqf, Pension Fund and STI) and the OCR long- term equity portfolio, unlocking additional resources to deploy in IsDB operations. In this regard, IsDB set a medium-term target of 6% for the STI Transform Fund with existing endowed resources of US$ 100m. That translates to an average US$ 6m annual operations envelope in support of STI start-ups and proof of concept funding in MCs. The ISFD has set similar target returns and with US$ 1.5 billion earmarked for investments, an average of US$ 95m of resources will be available for the concessional window of IsDB, which will be used to alleviate abject poverty in least developed MCs. X The new asset management model will provide an additional quality assurance for donor partners to bolster the resource mobilisation efforts of IsDB. This reflects the P5P objective to increase off-balance sheet financing. I S F D T A R G E T R E T U R N S US$1.5 billion are earmarked for investments and an average of US$95 million of resources will be available to alleviate abject poverty in the least developed MCs [ 203 ] T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S