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The World’s Biggest Wealth Fund Is Unhappy With Volkswagen’s Leadership

Posted on 08 February 2016 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund criticized Volkswagen AG’s ownership structure, saying it concentrates too much power with the Porsche-Piech family and puts minority shareholders at a disadvantage amid the carmaker’s emissions crisis.
“This cannot be a role model for Germany,” Yngve Slyngstad, chief executive officer of Norway’s sovereign wealth fund, said in an interview published Saturday with Frankfurter Allgemeine Sonntagszeitung. Through family holding company Porsche Automobil Holding SE, the Porsche-Piech clan controls 50.73 percent of Volkswagen’s voting shares, while only owning 31.5 percent of the company equity………………………………………..Full Article: Source

Norway’s oil fund urges US banks to split CEO-chairman role

Posted on 08 February 2016 by VRS  |  Email |Print

The world’s largest sovereign wealth fund has warned the biggest US banks that time is running out for them to end the highly contentious practice of combining the roles of chief executive and chairman.
Yngve Slyngstad, chief executive of Norway’s $810bn fund, said that while the battle to split the roles in many US companies could take a generation, it was “not in a sustainable position”. “There is a special consideration for banks given that history of 2008 which makes it untenable for companies not to separate the roles,” he added………………………………………..Full Article: Source

India wants to leverage NIIF equity to boost infrastructure

Posted on 04 February 2016 by VRS  |  Email |Print

How much can Rs 20,000 crore be leveraged to raise more equity? Through an appropriate yet conservative structure, say experts, about 10 times or roughly Rs 2 lakh crore. Sprinkle it a bit thin, and it could be multiplied to over Rs 4 lakh crore. That is the kind of multiplier structure that the Narendra Modi-led NDA government is plotting through the National Infrastructure Investment Fund (NIIF), to obtain the maximum bang out what it can spare from its budget resources, realising that India’s infrastructure development needs more equity or risk capital.
Announced in the budget for FY16 by finance minister Arun Jaitley, the NIIF has been in the works for a while.”We have been working on this for almost a year now. As part of that exercise, we have spoken to all the global experts of all the major consulting companies, all the major investment banks,” said minister of state for finance Jayant Sinha………………………………………..Full Article: Source

Sovereign wealth funds drive turbulent trading

Posted on 02 February 2016 by VRS  |  Email |Print

Asset managers have blamed outflows from sovereign wealth funds for one of the worst starts to the year for markets. The collapse in the price of oil resulted in state-backed investment vehicles becoming “forced sellers”. The year began with a sharp drop in equity markets. UK and US stocks fell almost 10 per cent in the first few weeks of 2016 and emerging markets were hit even harder.
Philippe Ferreira, a director at Lyxor Asset Management, the €116bn fund house, said sovereign wealth funds have been driving the turbulent trading conditions. “We know the sovereign wealth funds are under pressure to sell and that is contributing to the market pressure we are seeing,” he said. “Sovereign wealth funds have become forced sellers,” added Guy Monson, chief investment officer of Sarasin & Partners, a UK boutique investment manager………………………………………..Full Article: Source

Kazakh large fund’s new staff approved

Posted on 01 February 2016 by VRS  |  Email |Print

The new staff of the board of the Kazakh Sovereign Wealth Fund Samruk-Kazyna joint-stock company has been approved, the Samruk-Kazyna Corporate Communications Department said Jan. 29. Umirzak Shukeyev retained his post of the chairman of the board. Kaur Baljeet was appointed managing director of strategy and portfolio management.
Previously, she held the position of Senior Advisor of the Development Program of the National Fund of the Asian Development Bank (ADB), Managing Director and Vice-Chairperson of the Kuwait Investment Authority & Kuwait Finance House, Vice President at ABN AMRO Bank, Maybank Malaysia and Deutsche Bank in various years………………………………………..Full Article: Source

GCC Economic Council for managing sovereign funds

Posted on 01 February 2016 by VRS  |  Email |Print

Many questions have been raised about the proper way to overcome the current economic crisis caused by the oil price decline in the global market. Each country in the GCC is presenting a solution that appears suitable, amid the absence of a unified strategy to help the organization as a whole, not only to surpass the current period but also to ensure not to get trapped in it in the future.
The GCC countries are known to own vast wealth in the form of sovereign funds — estimated at 45 percent of the total sovereign fund in the world, with a capital of about $2 trillion. Each of these countries works individually, so it is easy to entice one side and blackmail the other. This has been the practice for decades………………………………………..Full Article: Source

Norway accepts hostile takeover by Vonovia

Posted on 29 January 2016 by VRS  |  Email |Print

Norway said its $800billion sovereign wealth fund has accepted Vonovia’s hostile takeover bid for rival Deutsche Wohen. The fund holds 4.6% of the shares in Vonovia and 6.9% in Deutsche Wohen.
A spokeswoman for the Sovereign Fund said it thought the move was in “the best interest” of the shareholders. She said: “The rationale behind this is that we see advantages of scale, as well as cost benefits.”……………………………………….Full Article: Source

Govt does not monitor Temasek, GIC’s investments in haze-linked firms: MOF

Posted on 29 January 2016 by VRS  |  Email |Print

Mr Heng Swee Keat, Singapore’s Finance Minister, says that commercial decisions by GIC and Temasek Holdings are made independent of state involvement. The Government only monitors the performance of haze-linked companies that sovereign wealth fund GIC and investment firm Temasek Holdings have investments in, said finance minister Heng Swee Keat, and not their commercial decisions.
Nonetheless, both are fully supportive of zero-burning policies for land clearance, he said. “GIC has also the Government that the palm oil companies in Indonesia that GIC invests in have confirmed that they observe zero-burning policies for their plantations………………………………………..Full Article: Source

Sainsbury’s likely to find support from Qatar Investment Authority for Home Retail Group bid

Posted on 29 January 2016 by VRS  |  Email |Print

Qatar Investment Authority (QIA), which holds a 25% stake in Sainsbury’s, is believed to have backed the supermarket chain it revises its offer for the Home Retail Group acquisition. This backing from QIA seen as significant is important as the takeover process has to complete before 2 February, reported The Times newspaper.
Investors of Home Retail have expressed dissatisfaction as the board did not counsel them when the offer was first made by Sainsbury’s in November, reported. Toscafund and Schroders, among the primary five investors in Home Retail, are believed to have brought both the sides for a new deal………………………………………..Full Article: Source

Oxford, Abu Dhabi Investment Authority face off on EB-5

Posted on 28 January 2016 by VRS  |  Email |Print

Two of the largest foreign investors in New York City real estate are at odds over the value of EB-5 investment, a funding vehicle popular among developers that provides foreign investors a path to U.S. citizenship. Tom Arnold, head of real estate in the Americas for the Abu Dhabi Investment Authority, warned against falling into “quick assumptions” about the program’s benefits, calling it a “cheap ticket” to American citizenship.
“This EB-5 thing is really controversial,” Arnold, whose employer has invested more than $2 billion in Manhattan real estate according to Real Capital Analytics, said at a Wednesday conference hosted by the ULI New York. “It’s up there with abortion and global warming.”……………………………………….Full Article: Source

Qube seeks passive CIC role

Posted on 27 January 2016 by VRS  |  Email |Print

Chris Corrigan’s Qube Holdings has sought assurances from its partner Global Infrastructure Partners that Chinese sovereign wealth fund China Investment Corporation will play only a passive role in their joint bid for Asciano in the wake of the backlash against a Chinese company’s lease of the Port of Darwin.
As it emerged yesterday that CIC held a small stake in Asciano as part of its global infrastructure portfolio, well below the 5 per cent threshold requiring a substantial shareholding notice, it is understood Qube has taken active steps to ensure the involvement of CIC will not further stoke concerns about Chinese investment in key Australian infrastructure assets………………………………………..Full Article: Source

South Korea’s new SWF chief sets sights on ‘top ten’

Posted on 26 January 2016 by VRS  |  Email |Print

Former World Bank executive director takes office as CEO of the Korea Investment Corporation; sets out desire to grow assets under management beyond $200 billion The new chief executive officer of the Korea Investment Corporation has set his sights on making the sovereign wealth fund (SWF) one of the “top 10″ in the world, since taking office last week.
Sung-Soo Eun, formerly an executive director at the World Bank, joined the fund, which oversees around $85 billion in assets………………………………………..Full Article: Source

Temasek brings in top European advisers

Posted on 21 January 2016 by VRS  |  Email |Print

Temasek, the Singaporean state investment company, has established a panel of European corporate luminaries to advise it on dealmaking in the region. Ian Davis, chairman of Rolls-Royce, and the chairmen of Diageo and Italian insurer Generali are among members of the European advisory panel, which first met in London on Tuesday, writes Joseph Cotterill, private equity correspondent.
Temasek said the panel – and versions in other regions which will follow – would help it “on issues relevant to Temasek’s activities across Europe, and to facilitate closer collaboration with key business stakeholders.”……………………………………….Full Article: Source

Korea Investment Corp. taps World Bank executive as CEO

Posted on 20 January 2016 by VRS  |  Email |Print

Sung-Soo Eun joined Korea Investment Corporation Tuesday as CEO as well as chairman of the sovereign wealth fund’s board of directors, said Jeongjin Lim, a spokeswoman for the $85 billion, Seoul-based fund.
Eun replaces Hank Ahn, who resigned as CEO late last year shortly before the Korea Board of Audit and Inspection released a report critical of the fund’s management. Eun comes to KIC from the World Bank, where he served as an executive director representing a number of countries in the region, including Korea, Australia, New Zealand, Cambodia and Mongolia………………………………………..Full Article: Source

Korean Sovereign-Wealth Fund Names New CEO

Posted on 19 January 2016 by VRS  |  Email |Print

South Korea’s sovereign-wealth fund has said it has hired a World Bank director as its new chief executive following the resignation of its previous leader in November. Korea Investment Corp., which had $84.7 billion of assets at the end of 2014, appointed World Bank executive director Sung-Soo Eun to start Tuesday.
He was previously deputy minister for international affairs at South Korea’s Ministry of Strategy and Finance. His predecessor resigned after leading a controversial and unsuccessful bid to purchase a stake in the Los Angeles Dodgers baseball team………………………………………..Full Article: Source

Kazakh wealth fund fires senior executive

Posted on 18 January 2016 by VRS  |  Email |Print

Sovereign wealth funds are notoriously secretive. Contact 10 for a story and you are guaranteed that most, if not all, will decline to comment. Even consultants and researchers who specialise in state-owned investment vehicles are often reluctant to speak on the record about specific sovereign funds, which are set up to save money for a rainy day or to ensure stable social and economic growth of a country.
This veil of secrecy is one of the reasons Berik Otemurat’s recent actions are exceptional. This month, while he was still a senior official at oil-rich Kazakhstan’s central bank, the 35-year-old warned that the country’s $64.2bn national fund could fold………………………………………..Full Article: Source

What If Norway’s Sovereign Fund Replicated the Yale Endowment Model

Posted on 18 January 2016 by VRS  |  Email |Print

Sovereign wealth funds are known for their long-term investment horizon and preference toward harvesting the illiquidity premium. Many wealth funds are engaged in co-investments and direct investments such as the Abu Dhabi Investment Authority (ADIA) and Singapore’s GIC Private Limited.
However, some sovereign funds are restricted to a smaller universe of asset classes. What if Norway’s sovereign wealth fund were able to generate the returns of the Yale Investment Office. How big would the sovereign wealth fund be today? Norway’s Government Pension Fund Global (GPFG) has major allocations to fixed income and equities and a sliver to overseas institutional real estate. The Yale endowment model is copied by a plethora of sovereign funds, endowments and pensions, focusing on a high allocation to illiquid investments………………………………………..Full Article: Source

TIFF snags another investment exec from Alaska Permanent Fund

Posted on 18 January 2016 by VRS  |  Email |Print

David R. Fallace was named managing director at The Investment Fund for Foundations, said spokesman Paul Horvitz. It is a new position. Mr. Fallace, who starts Jan. 19, will oversee TIFF’s diversifying strategies, which includes conducting manager research, selectio, and monitoring; directing the hedge fund component of TIFF’s outsourced CIO strategies; and expanding TIFF’s investment efforts across special opportunities.
He will report to Jay Willoughby, chief investment officer. Messrs. Willoughby and Fallace previously worked together at the $50 billion Alaska Permanent Fund Corp., Juneau, where Mr. Willoughby was CIO and Mr. Fallace was director of investments-special opportunities………………………………………..Full Article: Source

Kazakhstan Fires Wealth Fund Manager Who Criticized Strategy

Posted on 14 January 2016 by VRS  |  Email |Print

The chief executive of Kazakhstan’s National Investment Corp., which was set up to help manage the country’s $64 billion oil fund, has been fired. Berik Otemurat’s departure comes less than a week after he told The Wall Street Journal that he was concerned the oil fund could run out of money within six or seven years as slumping oil prices cut revenue and the government spends its savings.
The 35-year-old executive was replaced by his predecessor, Yeszhan Birtanov, the National Investment Corp. said in a statement. Mr. Birtanov most recently led Kazakhstan’s stock exchange. He previously worked at the central bank and was chief executive of the National Investment Corp. between 2012 and 2014………………………………………..Full Article: Source

Norwegian oil fund gives grants for portfolio, engaged ownership research

Posted on 14 January 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund has awarded two research grants, one for a project on portfolio choice for long-term investors and another for an investigation of the effectiveness of engaged ownership.
The grants are for three years and were awarded as part of the Norwegian Finance Initiative’s (NFI) research programme. US-based National Bureau of Economic Research (NBER) has been granted funding to carry out a series of research conferences on topics within long-term asset management………………………………………..Full Article: Source

Abu Dhabi Investment Authority hires head of private equities

Posted on 14 January 2016 by VRS  |  Email |Print

Sherwood Dodge was named global head of private equities at the Abu Dhabi Investment Authority, said a spokesman for the sovereign wealth fund. The role was previously held by James Kester, who left in 2013. Further details could not be learned by press time.
Mr. Dodge is responsible, alongside members of the senior management team, for setting ADIA’s private equity strategy, overseeing the private equity program, and for making investment recommendations to the investment committee. His responsibilities encompass private equity funds, principal investments, secondary fund investments and private credit………………………………………..Full Article: Source

Sovereign Wealth Funds Can Be Management Leaders

Posted on 14 January 2016 by VRS  |  Email |Print

The rise of the activist investor is typically seen as a challenge to existing management. An outside investment fund, often coming in as part of a hostile takeover, forces management to cut costs and reins in the company’s ambition, frequently seeking to boost its stock price and sell.
But what if, instead, activist investors followed a business model based on figuring out the capabilities of companies they wanted to buy and improving them for long-term success? They would have to change the way they operated, building relationships with the existing management of the companies in which they bought a stake, and assuming that the best results come from collaborative learning between the investors and the enterprise………………………………………..Full Article: Source

Use GIC returns as component in CPF OA rate: NUS prof

Posted on 13 January 2016 by VRS  |  Email |Print

The Singapore government can consider partially pegging the interest rate paid by the Central Provident Fund (CPF) Ordinary Account (OA) to returns generated by sovereign wealth fund GIC, an academic has suggested.
National University of Singapore (NUS) economics associate professor Chia Ngee Choon acknowledged that GIC returns are already distributed to Singaporeans indirectly through, for example, Budget top-ups to CPF accounts. But linking GIC to the CPF OA interest rate allows for a more direct channel for Singaporeans to enjoy GIC returns should the fund do well, she said………………………………………..Full Article: Source

Is it okay to include GIC returns when determining CPF interest rate?

Posted on 13 January 2016 by VRS  |  Email |Print

Experts believe the interest rate for the Central Provident Fund (CPF) Ordinary Account (OA) could be tweaked in the light of rising interest rates in the United States. One option raised at a forum yesterday was to include the returns of the sovereign wealth fund GIC when devising the formula that determines the OA rate.
Interest on OA funds is adjusted quarterly. It is either the legislated minimum 2.5 per cent a year or the average three-month rates at the three local banks, whichever is higher. GIC publishes five-, 10- and 20- year returns for all its investments of government assets, including CPF funds. The annualised 20-year real rate of return for the year ended March 31, 2014, was 4.1 per cent………………………………………..Full Article: Source

Sovereign Wealth Fund Samruk-Kazyna announces changes in composition of Board of Directors

Posted on 12 January 2016 by VRS  |  Email |Print

Sovereign Wealth Fund Samruk-Kazyna JSC (Astana), whose bonds are officially listed on Kazakhstan Stock Exchange (KASE) has by an official letter of December 31, 2015 informed the KASE of the following:
“Following the Government Resolution No. 1113 of December 29, 2015 the composition of the Board of Directors of Samruk-Kazyna JSC changed, according to which the new members are the Assistant to the President of the Republic of Kazakhtsan, Alikhan Smailov, and Dekamp Olivier Edward Emmanuel as the independent director, and the members dismissed are Y. Orynbayev and N. Stapleton”……………………………………….Full Article: Source

Norway Group to Study Equity-Share Change for $815 Billion Fund

Posted on 11 January 2016 by VRS  |  Email |Print

Norway set up a committee to review whether to change the $815 billion sovereign wealth fund’s equity share and possibly allow the investor to boost the current 60 percent allocation as it struggles to reach return targets.
Knut Anton Mork, a senior economist at Svenska Handelsbanken in Oslo, will lead the effort along with Sigbjoern Johnsen and Kristin Halvorsen, the predecessors of Finance Minister Siv Jensen, the ministry said in a statement. It will analyze the fund’s expected return and risk with different equity allocations and can propose changes in a report due by Oct. 15. That will be addressed by a government white paper the following spring………………………………………..Full Article: Source

Sovereign Wealth Funds for critical infrastructure

Posted on 11 January 2016 by VRS  |  Email |Print

Nigeria got to a giddy height of low crude oil prices which negatively affected our economy and the currency. Foreign Sovereign Wealth Funds (SWF) are now being sought to upgrade critical mass transit and energy infrastructure worth about N25 billion.
Vice President, Professor Yemi Osibajo who oversees President Muhammadu Buhari’s economic policies, late October 2015 said that other SWFs have indicated interest in the fund which would be used to address the nation’s dilapidated roads, rail and power infrastructure………………………………………..Full Article: Source

Dubai-Based SWF Hunts for Public Markets Chief

Posted on 07 January 2016 by VRS  |  Email |Print

A multi-billion sovereign wealth fund in the United Arab Emirates is seeking a director of public markets to be based in Dubai. According to a job posting on eFinancialCareers, the unnamed fund is looking to hire a “highly strategic” investor with extensive experience in global equities to take over its public investments in more than 30 countries.
The ideal candidate will be able to work with not only public equities, but also fixed income, multi-asset strategies, and short-term assets. There is one multi-billion sovereign fund based in Dubai: the Investment Corporation of Dubai. The estimated $165.6 billion fund and recruiting firm Madison Pearl did not respond to CIO’s requests for confirmation by time of press………………………………………..Full Article: Source

Alaska Permanent taps DHR International to conduct search for CIO

Posted on 06 January 2016 by VRS  |  Email |Print

Alaska Permanent Fund Corp., Juneau, hired DHR International to conduct a search for a new chief investment officer, said a spokeswoman for the $52 billion sovereign wealth fund. Jay Willoughby, CIO, left the fund in the fall to become CIO of the The Investment Fund for Foundations, which manages about $11 billion.
Jim Parise, director of fixed income, is currently acting chief investment officer at the permanent fund while continuing to fulfill his fixed-income responsibilities………………………………………..Full Article: Source

The Overblown Threat to Money Managers

Posted on 05 January 2016 by VRS  |  Email |Print

The sound of sovereign wealth funds sucking money back home is whistling through the asset management industry. But the direst forecasts for asset managers may be overblown. Sovereign funds have ballooned, from $3.3 trillion in 2007 to $7.2 trillion by the middle of 2015, according to the Sovereign Wealth Fund Institute, a research firm.
At the end of 2014, SWFs — many of them from commodity-rich countries — had $1.9 trillion in equities, $900 billion in fixed income and short-term liquid assets and $400 billion in alternative investments, including real estate, hedge funds and private equity, according to a Bloomberg News report last month based on Moody’s research………………………………………..Full Article: Source

Have the sovereign wealth billions been found?

Posted on 05 January 2016 by VRS  |  Email |Print

While the debate on Nigeria’s sovereign wealth fund debacle raged sometime in December, 2013, available statistics on the spiraling figures did not add up then with reasons adduced in government circles.
A member of the committee then, Senator Ita Enang and former Coordinating Minister for the Economy and Finance Minister, Mrs. Ngozi Okonjo-Iweala, had quoted different figures of funds accruing to the Excess Crude Account (ECA) during the Joint Senate Committee of Finance and Appropriations on the 2013 budget and federal revenue-generating agencies. Senator Enang, quoting from records available to the committee, said so far, $14.06 billion inflow was recorded into the ECA with a $9 billion outflow, leaving a balance of $5.06 billion………………………………………..Full Article: Source

Oman to raise tax and cut subsidies as oil rout hits sultanate hard

Posted on 04 January 2016 by VRS  |  Email |Print

Unlike the UAE, which has reserves of more than 275 per cent of its GDP, and Saudi Arabia, with reserves of about 100 per cent of GDP, the Oman Investment Fund, the sultanate’s sovereign wealth fund, has 5.4 billion rials (Dh5.28bn) in assets under management, equivalent to 40 per cent of GDP.
The Omani fund is dwarfed in size by the sovereign wealth funds of its neighbours. The Abu Dhabi Investment Authority and Saudi’s SAMA Foreign Holdings each have more than US$600bn in assets under management. Standard & Poor’s has cut Oman’s credit rating twice this year, as the oil rout had a greater effect on the country’s fiscal and trade positions than previously forecast………………………………………..Full Article: Source

The key to the success of NIIF, India’s new SWF, will be governance

Posted on 30 December 2015 by VRS  |  Email |Print

India now has a sovereign wealth fund. The National Investment and Infrastructure Fund (NIIF) will soon get a chief executive even as negotiations are on with strategic investors to put in capital above the Rs.20,000 crore a year that the government has promised. This money will be leveraged through debt.
Governments are generally bad at picking investment opportunities. The key to the success of NIIF will be governance. Money is to be put not just into asset management companies that buy infrastructure assets but also private projects, both new and stalled. It is thus important that the fund managers are given operational freedom to invest in the most attractive opportunities………………………………………..Full Article: Source

SOFAZ not to cut expenditures

Posted on 30 December 2015 by VRS  |  Email |Print

Azerbaijan’s oil fund SOFAZ has no plans to cut budget expenditures for 2016, the fund told Trend. “The budget of the fund, as well as the state budget, is approved by the decree of the president of Azerbaijan in manats and is a financial document, expenditures of which should be executed,” the fund said. “In this regard, regardless of income level in the next year, SOFAZ is obliged to fulfill the expenditure budgeted.”
The revision of the budget expenditures of the fund due to the fact that expenditures of the SOFAZ are linked to expenditures of the consolidated budget, the limit of which is approved by law on the state budget, will be possible only in case of revision of the state budget of the country, according to the fund………………………………………..Full Article: Source

ADIA, Portuguese insurer garner bulk of QFII quota awards for December

Posted on 29 December 2015 by VRS  |  Email |Print

China’s State Administration of Foreign Exchange extended another $1 billion in quota capacity to the Abu Dhabi Investment Authority on Dec. 25, lifting the sovereign wealth fund’s total under the state’s qualified foreign institutional investor program to $2.5 billion, according to SAFE’s latest monthly listing of QFII quotas Monday.
The Christmas top-up leaves ADIA on par with Norges Bank and the Hong Kong Monetary Authority as the QFII participants with the biggest quotas, $2.5 billion apiece………………………………………..Full Article: Source

The Trouble With Sovereign-Wealth Funds

Posted on 28 December 2015 by VRS  |  Email |Print

Kazakhstan’s $55 billion sovereign-wealth fund helped pull the country through the global financial crisis and offered funding for the country’s bid to host the 2022 Winter Olympics. But the collapse in oil prices has hit Kazakhstan and its fund, Samruk-Kazyna JSC, hard.
In October, the fund borrowed $1.5 billion in its first syndicated loan to help a cash-strapped subsidiary saddled with a troubled oil-field investment. “Our oil company lost lots of its revenues,” says the fund’s chief executive, Umirzak Shukeyev. “Currently, we are trying to adjust to the situation.”……………………………………….Full Article: Source

SOFAZ not to cut expenditures in 2016

Posted on 28 December 2015 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) has no plans to cut budget expenditures for 2016, the fund told Trend. “The budget of the fund, as well as the state budget, is approved by the decree of the president of Azerbaijan in manats and is a financial document, expenditures of which should be executed,” the fund said. “In this regard, regardless of income level in the next year, SOFAZ is obliged to fulfill the expenditure budgeted.”
The revision of the budget expenditures of the fund due to the fact that expenditures of the SOFAZ are linked to expenditures of the consolidated budget, the limit of which is approved by law on the state budget, will be possible only in case of revision of the state budget of the country, according to the fund………………………………………..Full Article: Source

Gov’t, private reps likely to manage Wealth Fund

Posted on 28 December 2015 by VRS  |  Email |Print

The David Granger administration hopes that the proposed Sovereign Wealth Fund (SWF) will be managed by a hybrid of government and private individuals, according to Minister of Governance Raphael Trotman.
“It is a well-known phenomenon that where governments are too involved in managing funds, they don’t always function at an optimum level especially if these are funds to be invested. It is best when funds are managed partially between government and private sector professionals. Some countries even have funds managed out of the country,” he said………………………………………..Full Article: Source

How 1MDB overpaid for its power assets

Posted on 21 December 2015 by VRS  |  Email |Print

Most of 1MDB’s power assets were acquired within a 16-month time frame between March 2012 and July 2013. The spending spree raised many questions at the time, which remain unsatisfactorily unanswered as at writing time. The underlying logic of buying over independent power producers (IPPs), as understood by market observers, would likely be the strong cash flow.
In simple terms, IPPs have a steady stream of cash flow by virtue of their power purchase agreements (PPAs), which are iron-clad agreements that guarantee a steady stream of money in exchange for a steady level of power generation as stipulated in the agreement………………………………………..Full Article: Source

Samruk Kazyna Top Management to Be Reduced by Nearly Half as Fund Undergoes Transformation

Posted on 21 December 2015 by VRS  |  Email |Print

The top management of the Samruk Kazyna Sovereign Wealth Fund will shrink from 16 to 9 managing directors as part of its transformation process, Chair of the Samruk Kazyna Board Umirzak Shukeyev announced Dec. 8 at the congress dedicated to transformation of the state-owned fund, its website reported.
While presenting the new functional model of the fund, Shukeyev focused his attention on the fact that Samruk Kazyna will have three basic directions in the future: commercial unit, including portfolio management of current assets; corporate unit, including finance, human resource management and operational support; and monitoring, which will incorporate compliance as a new function………………………………………..Full Article: Source

The Future Fund should not be used to pay off deficits

Posted on 18 December 2015 by VRS  |  Email |Print

The government’s budget update was an occasion to despair about the point of the Future Fund, Australia’s $118 billion sovereign wealth fund set up by the Howard government in 2006 mainly from the proceeds from the sale of Telstra. It seems it’s going to be largely wasted, and not invested in the proper sense of the word.
It turns out — highly conveniently for the government — that the first year of the Turnbull government’s (tiny) scheduled budget surplus in the financial year ending June 2021 is the same year the Future Fund’s assets are able to legally be drawn down………………………………………..Full Article: Source

Top investor Temasek willing to give StanChart time for turnaround

Posted on 17 December 2015 by VRS  |  Email |Print

Temasek is willing to give Standard Chartered time to work on its turnaround before deciding on the fate of its underperforming $4 billion (3 billion pounds) stake in the UK bank as part of a portfolio reshuffle, people familiar with the matter said.
Pressured by weak returns from low interest rates and a commodities rout, the Singapore state investor is taking a hard look at its $190 billion portfolio and may exit unprofitable assets, these people told Reuters. This approach was evident last week when Temasek sold at below book value a controlling stake in shipping firm Neptune Orient Lines (NOL) , its biggest disposal since 2009………………………………………..Full Article: Source

China to Move Wealth Fund HQ to N.Y., Signaling Increased Focus on U.S.

Posted on 15 December 2015 by VRS  |  Email |Print

China Investment Corp, the government’s $747bn (£493.2bn) sovereign wealth fund, is shifting its focus to US investments and broader global ambitions as it prepares to move its North American headquarters to New York from Toronto early next year, according to reports.
With its major Canadian investments in the red as energy and mining companies reel from tumbling oil and metal prices, CIC is looking to cut its exposure, and could move to New York as early as March 1, it is claimed. It came as China joined the European Bank for Reconstruction and Development, handing the world’s second biggest economy investment routes into Europe, Africa and Middle East………………………………………..Full Article: Source

This is the secret strategy behind GIC’s million-dollar returns

Posted on 15 December 2015 by VRS  |  Email |Print

Acting as a cornerstone investor in bond deals is helping GIC Pte boost returns on its fixed-income portfolio as yields persist near record lows and risks start to increase in the bond market, according to Singapore’s sovereign-wealth fund.
Companies that issue bonds directly to GIC when it acts as an anchor investor save on underwriting fees and part of those savings are passed on to the wealth fund, Chief Investment Officer Lim Chow Kiat said in an interview with the London-based Sovereign Wealth Center published Tuesday………………………………………..Full Article: Source

Saudi eyes spending cuts, new revenue sources

Posted on 14 December 2015 by VRS  |  Email |Print

Saudi Arabia’s government is expected to announce spending cuts and a drive to raise revenue from new sources as it lays out a strategy to cope with an era of cheap oil, people familiar with Saudi policy-making said.
Increasing non-oil exports would happen only slowly, so Riyadh should also consider introducing new policies to preserve its foreign assets and create a sovereign wealth fund to increase returns on them……………………………………….Full Article: Source

Chaos in Libya: It’s the oil, stupid

Posted on 14 December 2015 by VRS  |  Email |Print

There is seems no end to the bad news coming out of Libya. UN-led negotiations to unite the divided country — it has two parliaments, two governments, two militia coalitions that have been competing for control of a rapidly failing state since summer 2014 — are stalling. Fighting continues apace in Benghazi, the city that was the first to rebel against the rule of Muammar al-Gaddafi in 2011 and is now a byword for extremism.
The assets of the Libyan Investment Authority, the sovereign wealth fund that owns shares in businesses (including the Italian football club Juventus) and real estate across Europe, are being fought over in courts by the rival governments………………………………………..Full Article: Source

Bypassing investment banks in bond sales helps GIC boost returns

Posted on 10 December 2015 by VRS  |  Email |Print

Acting as a cornerstone investor in bond deals is helping GIC boost returns on its fixed-income portfolio as yields persist near record lows and risks start to increase in the bond market, according to Singapore’s sovereign-wealth fund.
Companies that issue bonds directly to GIC when it acts as an anchor investor save on underwriting fees and part of those savings are passed on to the wealth fund, Chief Investment Officer Lim Chow Kiat said in an interview with the London-based Sovereign Wealth Center published Tuesday………………………………………..Full Article: Source

How Norway’s SWF Plans to Benchmark Real Assets

Posted on 10 December 2015 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund has published proposals to overhaul its benchmarking process in preparation for entering infrastructure markets for the first time. Norges Bank Investment Management (NBIM), which runs the $846 billion Norwegian Government Pension Fund—Global, has also formally recommended that the country’s finance ministry permit doubling the SWF’s real estate allocation and buy infrastructure assets.
“The benchmark model is not well-suited to the fund’s investments in unlisted assets,” NBIM wrote in its submission to the ministry. “NBIM’s proposed changes aim to address the challenges this presents, while also retaining the key features of the current division of responsibility between the ministry and NBIM.”……………………………………….Full Article: Source

The Strategy Helping Boost Returns for Singapore State Fund GIC

Posted on 09 December 2015 by VRS  |  Email |Print

Acting as a cornerstone investor in bond deals is helping GIC Pte boost returns on its fixed-income portfolio as yields persist near record lows and risks start to increase in the bond market, according to Singapore’s sovereign-wealth fund.
Companies that issue bonds directly to GIC when it acts as an anchor investor save on underwriting fees and part of those savings are passed on to the wealth fund, Chief Investment Officer Lim Chow Kiat said in an interview with the London-based Sovereign Wealth Center published Tuesday………………………………………..Full Article: Source

Temasek looking to clean-up its portfolio

Posted on 09 December 2015 by VRS  |  Email |Print

In the latest chapter to sell-off its debt ridden assets, Singapore’s S$266 billion (US$189 billion) sovereign wealth fund Temasek agreed this week to relinquish its 67% stake in shipping company Neptune Orient Lines (NOL) to French container shipping giant CMA CGM for an estimated US$2.4 billion.
Once clear of antitrust regulations, CMA CGM will launch an offer price of S$1.30 (US$0.92) per share which represents a 49% premium to NOL’s unaffected share price and a 33% premium to NOL’s three-month, volume-weighted average share price. This will be the biggest transaction for the container shipping industry since Maersk bought Royal P&O Nedlloyd NV for US$2.9 billion in 2005……………………………………….Full Article: Source

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