Abstract
Sovereign wealth funds were established to safeguard and grow a nation’s revenue base. The very term “sovereign” implies self-sufficiency and long-term resilience. In practice, every investment carries both risk and reward, and losses are inevitable. Such losses are not sins; they are part of the game. The sin begins when losses are concealed — worse still when concealment becomes a deliberate act to shift money elsewhere. Loss-masking is not new; financiers have long relied on playbooks such as novation. By transferring loans off their balance sheets, institutions may appear “clean,” but in truth, capital is lost under a new disguise. At that point, it is no longer about profit and loss, but about integrity. A sovereign wealth fund exists to preserve the integrity of capital management while compounding wealth for future generations. Novating losses away undermines this very mission, eroding the trust and sovereignty the fund was meant to protect.