Giant Funds Are a Model for the Post-Coronavirus Future
Sovereign wealth funds would be a simple way for governments to attach strings to Covid-19 state aid, while ensuring they can influence corporate policy for the future.
It’s never too early to figure out how we’re going to get out of all this.
Photographer: Bloomberg
Governments are helping businesses survive the debilitating effects of the coronavirus by allocating state funds to various rescue packages to keep companies alive and preserve as many jobs as possible. With unprecedented amounts of economic stimulus planned to combat an unparalleled situation, it’s essential that the authorities spare at least some attention to what a post-pandemic exit strategy might look like.
Once the virus is subdued and the lockdowns end, governments should convert a chunk of the aid they’ve distributed into equity stakes in the recipients, with the ensuing portfolio of holdings assembled into sovereign wealth funds.