Evaluating Investment Strategies in Sovereign Wealth Funds

In the context of sovereign wealth funds (SWFs), a prominent fund, the Global Saving Fund (GSF), is considering a substantial investment in emerging technologies as part of its strategic asset allocation. The board of GSF has set specific objectives that include achieving higher returns while also contributing positively to global innovation. However, the chief investment officer (CIO) must carefully assess several risks inherent in this investment, including illiquidity, sector volatility, and regulatory uncertainties. During a recent strategy meeting, the CIO presented three potential investment strategies. One involved direct investments in startups, another focused on venture capital funds, and the third was to create a public-private partnership that collaborates with established tech firms.

What should the board consider most critically when evaluating these options in the context of long-term funding objectives?