However, there may be legitimate concerns in case such a fund is observed to be operating in a non-transparent manner or with predominantly non-commercial considerations. It is argued that some of the asset funds are similar to hedge funds and they themselves invest in hedge funds, thus inviting regulatory concerns similar to those pertaining to hedge funds.
The major issue is whether there should be a presumption in favour of or against a foreign public sector vis-à-vis a foreign private fund. The critical issue relates to standards of governance and transparency that are adopted by such funds and the extent of comfort that investee countries have in this regard.