Putin-No sovereign wealth fund in Russia yet

MOSCOW, June 30 (Reuters) - Russia does not yet have a sovereign wealth fund (SWF) but is working to create one, Prime Minister Vladimir Putin told U.S. Treasury Secretary Henry Paulson on Monday.

Paulson, who is in Russia to discuss trade and investment, told Putin the United States welcomes Russian investment and both sides were working together to outline best practices for SWFs, owned by governments of cash-rich countries.

"Since we do not have a sovereign wealth fund yet, you are confusing us with someone else," Putin told Paulson during a meeting in the Kremlin, adding that Russia had indeed created "various funds".

"But we are ready to do it (create a SWF), especially if you want us to," Putin said, noting that all of Russia's $8 billion investment in the U.S. economy was of private nature.

Russia split its oil stabilisation fund this year into a $129 billion Reserve Fund, which will cushion the budget from a fall in oil prices, and a $33 billion National Wealth Fund (NWF) earmarked for riskier investments.

Both funds invest now in top-rated bonds, on which returns are low. The Finance Ministry, which runs both funds, and the central bank, which acts as the government's asset manager, have to draft proposals on the fund's investment strategy by Oct. 1.

Russia plans to set up a government agency which will manage its sovereign wealth fund and will resemble Abu Dhabi Investment Authority, which agreed last November to buy $7.5 billion of stock in Citigroup.

"We can discuss what you have called the 'various funds' but we very much welcome your investment," Paulson told Putin.

The International Monetary Fund is drawing up principles for best practice in governance and transparency for SWFs, amid worries in the developed world about politically-motivated acquisitions. A Russian delegation took part in the process. (Reporting by David Lawder, writing by Gleb Bryanski)