At the end of a two-day meeting, the new group, the International Working Group of Sovereign Wealth Funds, issued a statement outlining its plan to agree on voluntary guidelines for best practices for SWFs by October.

'The IWG aims to agree on a common set of voluntary principles for SWFs, drawing on the existing body of principles and practices, to help maintain the free flow of cross-border investment and open and stable financial systems,' the group said.

The working group is co-chaired by Jaime Caruana, director of the IMF's Monetary and Capital Markets Department, and Hamad al Suwaidi, an Abu Dhabi finance official and director of the Abu Dhabi Investment Authority, the SWF that invested US$7.5 billion (S$10.2 billion) in US bank Citigroup in November.

The 25 member countries include Australia, Azerbaidjan, Bahrain, China, Iran, Libya, Norway, Qatar, Russia, Singapore, the United States and the United Arab Emirates.

Sovereign wealth funds today manage between two and three billion dollars in investments, according to the IMF, an amount that is projected to grow to up to US$10 trillion in the next five years.

The rapid rise in investment by SWFs, state-run investment funds mainly found in oil-exporting countries and Asian exporters, has raised concerns that governments could use them as political tools.

The IMF is expected to discuss a draft document on SWFs before the 2008 annual meetings of the IMF and the World Bank in October. -- AFP