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Sovereign Wealth Funds Briefing - Category | Financials more

Khazanah says ‘too early to tell’ if MAS revamp will be successful

Posted on 24 April 2015 by VRS  |  Email |Print

Malaysian state-owned investment arm Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar said it was still “too early to tell” if loss-making Malaysian Airline System (MAS) would be successfully turned around under its restructuring.
Khazanah had privatised and delisted MAS in December 2014 to restructure the airline within five years. MAS’s revamp follows two aviation mishaps involving the airline last year. These mishaps had resulted in MAS posting a net loss of RM1.33 billion in the nine months ended September 30, 2014 from a net loss of RM830.25 milllion a year earlier………………………………….Full Article: Source

Malaysia to have world’s largest syariah pension fund

Posted on 24 April 2015 by VRS  |  Email |Print

Malaysia’s state pension fund will offer a syariah-compliant investment option for its members by 2017, Prime Minister Datuk Seri Najib Razak said. This would create the largest syariah fund of its kind in the world, Najib said at the launch of an investment conference here. He did not specify how big he thought the syariah-compliant standalone fund could be.
Malaysia’s sovereign wealth fund Khazanah Nasional will add to the government efforts by issuing a RM1 billion socially responsible Islamic bond, which has now received regulatory approval, Najib added. The moves could help boost Malaysia’s economy, which has faced weakness due to the slump in oil prices and rising debt………………………………….Full Article: Source

Dr M: 1MDB is not sovereign wealth but sovereign debt

Posted on 24 April 2015 by VRS  |  Email |Print

Tun Dr Mahathir Mohamad pointed out today that Putrajaya will have to bear the losses incurred by 1 Malaysia Development Berhad (1MDB), noting it was the government that had invested in the troubled state-owned firm to begin with.
The former prime minister said 1MDB was “wrong” from the beginning, pointing out that the sovereign wealth fund was not put before Parliament. “If 1MDB loses money, the government will bear the loss,” Dr Mahathir wrote on his blog. “Yet the operation of 1MDB is not overseen by government officers responsible for the management of government funds,” he added………………………………….Full Article: Source

What the BNY Mellon Forex Settlement Really Means for SWFs

Posted on 24 April 2015 by VRS  |  Email |Print

Regulators and law enforcement extracted a hefty fine for fraud at one of America’s most respected financial institutions. Have sovereign wealth funds learned their lesson?
To be sure, despite the size of the settlement, the numbers involved may not seem big by sovereign wealth standards. “One question here, is it material?” asks Patrick Schena, Adjunct Assistant Professor and Co-Head of the Fletcher Network for Sovereign Wealth and Global Capital at the Fletcher School of Tufts University outside Boston, who advises on custodial issues………………………………….Full Article: Source

Australian sovereign fund joins Investa scrum

Posted on 23 April 2015 by VRS  |  Email |Print

The more than $109 billion Future Fund has waded into the contest for the Investa Property Group platform. It is highly likely Australia’s sovereign fund will partner with the ASX-listed DEXUS Property Group, sources said. However, the large sovereign funds and institutions have been advised not to enter exclusivity with managers such as DEXUS until the second round.
DEXUS has enlisted more than one capital partner. Sovereign wealth fund Abu Dhabi Investment Authority’s (ADIA) is also part of the consortium, it is understood. A shortlist for the $9 billion Investa Property Group will be drawn up by the end of next week with Morgan Stanley Real Estate Investing – which is exiting its Investa investment – keen to keep up the sale’s momentum……………………………………..Full Article: Source

Angola seeks $10bn for infrastructure despite oil price collapse

Posted on 23 April 2015 by VRS  |  Email |Print

Angola, Africa’s second-largest oil producer, is seeking to raise up to $10bn from foreign creditors as it attempts to push ahead with key infrastructure projects in the face of severe headwinds triggered by the collapse in crude prices. The southern African nation has slashed its budget for the year by a quarter, or about $15bn, after revising expenditure and halving its assumptions for oil price to $40 a barrel.
José Filomeno dos Santos, son of veteran president, José Eduardo dos Santos, and head of a $5bn sovereign wealth fund, adds: “Obviously there is a sense of worry . . . . [but there is] much more calm and more stability than we experienced in 2009. “We believe this situation will be managed much more smoothly.”…………………………………….Full Article: Source

WA future fund off limits despite budget woes

Posted on 22 April 2015 by VRS  |  Email |Print

WA has two years of financial pain to ride out but there’s no way the state government will raid its future fund, Premier Colin Barnett says. After Cabinet finalised the state budget on Monday, Mr Barnett said “large” deficits over the next two years could not be avoided.
But the future fund that was the centrepiece of the 2012/13 budget won’t be touched. Established with more than $1 billion in seed capital over four years using money from the Royalties for Regions fund, it aims to set aside cash from the state’s mineral resources for future generations…………………………………..Full Article: Source

Sovereign Wealth Funds Have an Active First Quarter 2015

Posted on 21 April 2015 by VRS  |  Email |Print

With recent noteworthy deals of sovereign wealth funds buying up massive real estate assets such as Norway’s SWF deal with Prologis on acquiring KTR Capital for US$ 5.9 billion or the Abu Dhabi Investment Council’s role in allocating to Spotify’s latest round, wealth funds continue to exhibit a greater role in direct investments.
Some notable first quarter deals in 2015 include the Qatar Investment Authority’s (QIA) role in buying the remaining portion of the Porta Nuova Development in Milan. The QIA, through Qatar Holding, bet big on the monumental urban rejuvenation development. Another colossal real estate deal in the first quarter 2015 is the China Investment Corporation (CIC) partnering with LaSalle Investment Management in acquiring the Meguro Gajoen complex in Tokyo for approximately 140 billion yen…………………………………..Full Article: Source

GE Holds Talks With Sovereign Funds for Finance-Assets Sale

Posted on 20 April 2015 by VRS  |  Email |Print

General Electric Co. has held talks with “a broad geographic spectrum” of sovereign wealth funds as part of the effort to sell the bulk of its lending business, Chief Financial Officer Jeff Bornstein said.
“We’re tracking every expression of interest inbound,” Bornstein said Friday in a telephone interview, declining to identify any suitors beyond saying that they included sovereign investors, banks, private-equity firms, hedge funds and insurers. “We have multiple, multiple pages of names. I think this is going to be very competitive.”…………………………………….Full Article: Source

World’s Biggest Wealth Fund Says Monetary Risks at Historic High

Posted on 20 April 2015 by VRS  |  Email |Print

For Norway’s $890 billion sovereign-wealth fund, the investment risks stemming from monetary policy have never been greater. Like most global investors, the Oslo-based fund is trying to navigate uncharted terrain as central banks across the world push out stimulus to protect economic growth and spur inflation.
“Monetary policy does affect pricing in today’s market to such an extent that monetary policy itself has been a risk you have to watch,” Yngve Slyngstad, chief executive officer of the fund, said in an interview on Wednesday at Bloomberg’s New York headquarters. “Investors are focused more on monetary policy changes than has been generally the case, than at any time, as far as I can remember.”…………………………………….Full Article: Source

Prologis Agrees to Acquire KTR Portfolio for $5.9 Billion

Posted on 20 April 2015 by VRS  |  Email |Print

Prologis Inc., the world’s largest owner of industrial real estate, agreed to acquire KTR Capital Partners for $5.9 billion to expand its presence in key U.S. markets. The purchase will be made by Prologis U.S. Logistics Venture, a joint venture with Norges Bank Investment Management, the San Francisco-based company said on Sunday in a statement.
Norges Bank Investment Management, Norway’s sovereign-wealth fund, made its first industrial property purchase in 2012 with the acquisition of a 50 percent stake in a European property portfolio from Prologis. The sovereign wealth fund became among the top foreign buyers of real estate in the U.S. last year, buying stakes in properties including three towers from Boston Properties Inc……………………………………..Full Article: Source

ADIA offloads stake in German residential giant

Posted on 20 April 2015 by VRS  |  Email |Print

Abu Dhabi Investment Authority (Adia) has sold a stake in German residential firm Deutsche Annington. The sovereign wealth fund reportedly took a €725m profit from the sale of a 6.6% stake.
Deutsche Annington, Germany’s biggest listed investor in the residential sector, said it has yet to receive official notification of the sale. It is, therefore, unclear whether the sale results in a complete withdrawal by ADIA…………………………………….Full Article: Source

SWFs Selling Out

Posted on 20 April 2015 by VRS  |  Email |Print

On Tuesday the China Investment Corp. (CIC) disclosed that it had sold more than 375.6 million shares in Shanghai-based Semiconductor Manufacturing International Corp. (SMIC) in a series of transactions over the first three months of 2015, lowering its stake to 10.5 percent of SMIC’s shareholder capital.
CIC had subscribed to purchase some HK$161.1 million ($20.6 million) in the company’s Hong Kong-listed shares in August 2014. However, SMIC’s share price has risen since then — its shares listed on the New York Stock Exchange have gained nearly 41 percent over the past 12 months — and the fund appears to have moved to cash in on the excess return…………………………………….Full Article: Source

Abu Dhabi Investment Authority to place remaining shares in Deutsche Annington

Posted on 16 April 2015 by VRS  |  Email |Print

Abu Dhabi Investment Authority to place remaining 23.5 mln shares in Deutsche Annington at 750 mln euros - source. Price range for Deutsche Annington between 30.80 euros and 31.79 euros - source.
BofAML sole bookrunner for placing of Abu Dhabi Investment Authority shares in Deutsche Annington - source……………………………………….Full Article: Source

Temasek launches up to $25 mln selldown in Shanghai Pharma - IFR

Posted on 15 April 2015 by VRS  |  Email |Print

Singapore state investor Temasek Holdings on Tuesday launched a selldown of up to $25 million in Shanghai Pharmaceuticals, IFR reported, citing a term sheet of the transaction.
Temasek is offering 8 million shares of Shanghai Pharmaceuticals in an indicative range of HK$23.55 to HK$24.30 each, equivalent to a discount of up to 3 percent to Tuesday’s close, added IFR, a Thomson Reuters publication. Goldman Sachs was hired as sole bookrunner of the selldown, the terms showed………………………………………..Full Article: Source

GIC in luck with $65m block as it exits Far East Horizon

Posted on 15 April 2015 by VRS  |  Email |Print

Singapore’s GIC made a complete exit from Hong Kong-listed Far East Horizon on the evening of April 13, netting HK$506.77m ($65m) in the process, with pricing driven by funds’ desire for a lucky number.
It wasn’t the first such stake sale by the Singapore government’s investment fund. Last July GIC, via Techlink Investment, raised HK$360m from a similar overnight block offering, according to Dealogic. That trade was led by sole bookrunner UBS……………………………………….Full Article: Source

Sovereign Wealth Funds increase assets in 2014, despite sharp drop in oil prices

Posted on 15 April 2015 by VRS  |  Email |Print

The majority of sovereign wealth funds globally have increased their assets under management over the course of 2014. The growth in assets, up from USD5.38tn in October 2013 to USD6.31tn in March 2015, has been driven by continued funding from governments and reserves, as well as from investment returns. This growth has also been in the headwind of falling oil prices, one of the main sources of funding for these institutions.
Alternative assets are also becoming an important part of these institutions’ portfolios, particularly as they seek to diversify their portfolios and acquire assets that can generate yield and help meet their long-term objectives. Seventy percent of sovereign wealth funds invest in at least one alternative asset class, with 60% of these institutions investing in real estate and infrastructure………………………………………..Full Article: Source

Angola’s sovereign fund pays $100 million to a shell company

Posted on 14 April 2015 by VRS  |  Email |Print

On 22 January 2015, Angola’s Sovereign Wealth Fund (FSDEA) transferred the sum of 9,948,750,000 kwanzas (equivalent at the time to US$100 million) to the company Kijinga S.A. This company is nothing more than a shell company set up as a front for shady transactions by Banco Kwanza Invest (BKI), a bank created by the 36-year-old José Filomeno dos Santos “Zenú”, the current chair of the FSDEA and the son of the president of the republic.
Kijinga S.A. shares an office with BKI at 150 Avenida Comandante Jika, next to the Maternity Hospital in Luanda. This address has only one business door, which opens into a small waiting room where there is a reception area and two chairs for visitors………………………………………..Full Article: Source

Bahrain SWF wants to double assets under management by 2022

Posted on 14 April 2015 by VRS  |  Email |Print

Bahraini sovereign fund Mumtalakat wants to double its $6.4 billion assets under management in the next seven years, preferably through partnerships with global investment firms, its chief executive told Reuters.
With stakes in some of the kingdom’s most high-profile firms including Aluminium Bahrain and Batelco as well as international names such as car firm McLaren, the fund currently has assets worth around 2.4 billion dinars ($6.37 billion)………………………………………..Full Article: Source

Deals raise oversight concerns at Abu Dhabi wealth fund

Posted on 14 April 2015 by VRS  |  Email |Print

The managing director of one of Abu Dhabi’s sovereign wealth funds used his private shell companies to secure deals with businesses closely connected to the fund, raising concerns about corporate governance. Khadem al-Qubaisi, managing director of state-owned International Petroleum Investment Company, used a Luxembourg-based company to take out a lease in Spain’s tallest building, according to documents seen by the Financial Times.
The building, owned by Bankia, the Spanish bank, became the headquarters of Cepsa, a Spanish energy group and subsidiary of Ipic, in July 2014, nine months after Mr Qubaisi closed the deal on the lease………………………………………..Full Article: Source

SOFAZ gains $79.5 million of profit from development project of Shah Deniz field

Posted on 14 April 2015 by VRS  |  Email |Print

Azerbaijan’s State Oil Fund (SOFAZ) gained $2.199 billion of profit from 2007 to April 1, 2015 by implementing the development project of the giant Shah Deniz gas condensate field in the Caspian Sea, AzerTag reports.
According to the Department of Public Relations of SOFAZ, it earned some $79.5 million as part of the Shah Deniz project from January 1 to April 1, 2015………………………………………..Full Article: Source

SWF assets surge by Dh3.3trn in 18 months: What’s behind the boost?

Posted on 14 April 2015 by VRS  |  Email |Print

Despite a drop in oil prices over the last year, sovereign wealth fund (SWF) assets have grown nearly 17 per cent. Alternative assets industry data collector Preqin said SWF assets under management expanded by more than $900 billion (Dh3.3 trillion) over the past 18 months, from October 2013 to March 2015, reaching $6.31 trillion (Dh23.15 trillion) by the end of last month.
SWF assets stood at $5.38 trillion (Dh19.74 trillion) in October 2013. The recent boost to SWF assets has come mainly from continued funding from governments and reserves as well as from investment returns, Preqin said………………………………………..Full Article: Source

Spotify to be worth $8.4bn after fundraising

Posted on 13 April 2015 by VRS  |  Email |Print

Goldman Sachs and Abu Dhabi’s sovereign wealth fund have agreed to invest in Spotify, according to reports. Spotify is nearing a deal to raise $400m (£273m), valuing the music streaming service provider at $8.4bn, according to reports.
The terms of the funding, Spotify’s seventh, have been set and the deal is expected to close in the coming weeks. Goldman Sachs and Abu Dhabi’s sovereign wealth fund have agreed to invest in the round and Spotify has also held talks with asset managers and venture-capital firms, the Wall Street Journal reported. Spotify and Goldman Sachs could not immediately be reached for comment………………………………………..Full Article: Source

Malaysia’s i-VCAP aims to double AUM to $550m in two years

Posted on 10 April 2015 by VRS  |  Email |Print

Sovereign wealth fund unit i-VCAP Management Sdn Bhd is targeting to double its assets under management (AUM) to over MYR2 billion ($550 million) in the next two years. i-VCAP has MYR1.1 billion assets under management, around MYR350 million of which is contributed by the exchange-traded funds (ETF).
Chief executive officer Mahdzir Othman said the fund management firm is targeting to double its AUM within the next two years, through more new ETFs as well as other fund structures. i-VCAP is a subsidiary of sovereign wealth fund Khazanah Nasional and has Malaysia’s Retirement Fund Incorporated’s (also known as KWAP) CEO Wan Kamaruzaman Wan Ahmad as its chairman………………………………………..Full Article: Source

Indonesia’s Bumi to post 2014 results by next week - director

Posted on 10 April 2015 by VRS  |  Email |Print

Indonesia’s largest coal producer PT Bumi Resources Tbk aims to release its 2014 financial results by next week after it confirms how much it owes to several creditors, a company director said on Thursday. Bumi could not report its results for the full year ended December yet as it was “still waiting for debt confirmation from several creditors,” the company said in a stock exchange filing on Wednesday.
The company’s creditors include Chinese sovereign wealth fund China Investment Corp, bondholders and “4-5 large banks”, Bumi’s director Dileep Srivastava told Reuters on the phone………………………………………..Full Article: Source

Qatar lends Palestinian gov’t $100 million to pay salaries

Posted on 10 April 2015 by VRS  |  Email |Print

The Palestinian Authority said it had received a $100 million loan from Qatar to help pay civil servants salaries and alleviate an economic crisis triggered by a row with Israel over taxes. President Mahmoud Abbas, who is visiting the Gulf state, issued a statement thanking Qatar for the loan. There was no immediate confirmation or comment from Qatari officials.
Deposits at the lender, which is 50-percent owned by sovereign wealth fund Qatar Investment Authority, grew 6.8 percent year-on-year to 369 billion riyals at the end of March………………………………………..Full Article: Source

BlackRock, Norway’s Wealth Fund to Gain From Shell’s BG Deal

Posted on 09 April 2015 by VRS  |  Email |Print

BlackRock Inc. and Norway’s sovereign wealth fund are poised to cash in after Royal Dutch Shell Plc agreed to buy BG Group Plc in the largest oil and gas deal in more than a decade.
BlackRock, the world’s largest asset manager, owns 257 million shares or about 7.5 percent of BG Group, according to data compiled by Bloomberg from a filing on March 19, 2014. Norges Bank Investment Management, Norway’s sovereign fund, owns about 5 percent of BG, figures compiled by Bloomberg show………………………………………..Full Article: Source

Gulf Air losses to fall sharply

Posted on 08 April 2015 by VRS  |  Email |Print

Gulf Air’s losses this year are expected to be less than a quarter of what they were just three years ago. Transportation and Telecommunications Minister Kamal Ahmed told MPs yesterday that was due to a major restructuring exercise launched in early 2013.
Ahmed was responding to a question on the losses of Bahrain Mumtalakat Holding Company, Bahrain’s sovereign wealth fund which oversees a portfolio of 36 companies including Gulf Air. The minister, who is also Mumtalakat chairman, also urged MPs to stop trying to portray the sovereign wealth fund as ‘corrupt’……………………………………….Full Article: Source

Kazakhstan Railways KZT 23 billion assets sale in 2014

Posted on 08 April 2015 by VRS  |  Email |Print

Kazakhstan Railways (KTZ), the largest subsidiary of Sovereign Wealth Fund “Samruk-Kazyna”, has tendered 35 subsidiaries and affiliated organizations, as part of the second wave of the privatization programme carried out by the fund.
Since the beginning of the assets sale in 2014, KTZ has sold 14 subsidiaries and affiliated organizations, for more than KZT 23.2 bn. On the 1st of April, KTZ signed a KZT 1.78 bn contract for the sale of 100% shares of JSC “Center of transport service” (CTS)………………………………………..Full Article: Source

Temasek Snaps Up Stake In UK’s Funding Circle

Posted on 07 April 2015 by VRS  |  Email |Print

A fast-growing peer-to-peer lending platform is to sell a stake in itself to Temasek, the Singaporean sovereign wealth fund, as part of a fundraising that will catapult it into the ranks of Britain’s most valuable technology start-ups.
Sky News can exclusively reveal that Funding Circle is in advanced talks with Temasek Holdings about plans to raise well over £50m in new capital to accelerate its expansion. Temasek, which has invested in some of the world’s most valuable technology companies, including China’s Alibaba, plans to invest roughly £30m as part of the deal, sources said on Thursday………………………………………..Full Article: Source

NSIA Records N15bn Income In 2014

Posted on 02 April 2015 by VRS  |  Email |Print

The Managing Director, Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji, said the fund recorded a net comprehensive income of N15.8 billion in 2014, up from N505 million in December 2013. Orji announced this while addressing newsmen on Authorities Financial Year report on Monday in Abuja.
“Total revenue during the period stood at N7.2 billion, up from N1.96 billion. “Change in fair value of assets was at N10.5 billion as opposed to a loss of N19.5 million during the 15 month period ended December 2013,’’ he said……………………………………….Full Article: Source

Russia Has Ukraine’s Economy in a Choke Hold

Posted on 01 April 2015 by VRS  |  Email |Print

The well-known military theorist Carl von Clausewitz once said that “War is a mere continuation of politics by other means.” Now, to paraphrase Clausewitz, while the Minsk II cease-fire continues to hold in eastern Ukraine, Russia looks set to use its financial leverage over Ukraine as a “continuation of war by other means.”
In December 2013, amid the ongoing Euromaidan demonstrations, Moscow promised then-Ukrainian President Viktor Yanukovych’s government $15 billion to support Ukraine’s economy. While government-to-government loans are common, Russia’s initial disbursement to Ukraine was actually in the form of a two-year, $3 billion eurobond purchased by one of the Kremlin’s sovereign wealth funds………………………………………..Full Article: Source

Kuwait Investment Authority will provide 550 million to an affiliate of Natural Gas

Posted on 31 March 2015 by VRS  |  Email |Print

Gas Natural Fenosa said Monday it has signed an agreement for the sovereign wealth fund Kuwait Investment Authority (KIA) make a capital of $ 550 million in Global Power Generation (GPG), a subsidiary of international generation Gas Natural Fenosa.
The Spanish group said the capital increase will be fully subscribed by KIA and in return, the Kuwaiti fund will have a 25 percent stake in GPG. In its press release, Natural Gas said the operation allows for an investor partner for boosting growth plans GPG, formed last year with the aim of entering new markets and boost the generation business abroad. (Translated)……………………………………….Full Article: Source

No dividend on Sovereign Wealth Fund till 2017

Posted on 31 March 2015 by VRS  |  Email |Print

The Nigerian Sovereign Investment Authority on Monday said it would not pay dividend on the Sovereign Wealth Fund until the end of the 2017 financial year. The Managing Director and Chief Executive Officer, NSIA, Mr. Uche Orji, disclosed this while addressing journalists in Abuja on Monday about the financial performance of the agency in the 2014 financial period.
He said the law setting up the Sovereign Wealth Fund did not allow the agency to pay dividend until the fund had posted profit for five consecutive years. The SWF, which was set up in 2012, is jointly owned by the federal, state and local governments. The three tiers of government are the shareholders that are expected to receive dividends from the fund………………………………………..Full Article: Source

Nigeria Sovereign Investment Authority earned N15.8bn in 2014

Posted on 30 March 2015 by VRS  |  Email |Print

The Nigeria Sovereign Investment Authority on Sunday said it earned a net income of N15.8bn in the 2014 financial year. The agency, in its annual report made available to our correspondent by the Managing Director/Chief Executive Officer, Mr. Uche Orji, said the amount was a significant improvement on the N505m recorded in the 2013 financial period.
The NSIA is the agency currently managing the Sovereign Wealth Fund, which was set up in March 2013 by the Federal Government following the injection of an initial investment of $1bn. The initial investment was later followed with an additional investment of $550m about nine months later………………………………………..Full Article: Source

Qatar’s QIA to partly fund Dufry’s purchase of WDF: sources

Posted on 30 March 2015 by VRS  |  Email |Print

Qatar Investment Authority is partly financing Swiss travel retailer Dufry’s 1.3 billion-euro purchase of a majority stake in smaller Italian rival World Duty Free, according to three sources close to the matter.
Edizione, the holding company owned by the Benetton family that controls World Duty Free (WDF), said on Saturday it was selling its 50.1 percent stake in the group to Dufry for 10.25 euros per share. The deal values the Italian firm at 3.6 billion euros ($3.8 billion) and will make the combined group the world’s biggest travel retailer by far………………………………………..Full Article: Source

An idea for Ring of Fire’s riches

Posted on 30 March 2015 by VRS  |  Email |Print

Ontario should look to socialist Norway if it wants to capitalize on the rich mineral deposits of the far north’s Ring of Fire. Like Canada, Norway has a resource-based economy, exploiting extensive reserves of oil, natural gas minerals and lumber. Half its export revenues come from oil and gas. The money was invested in financial markets outside Norway. It grew. Their sovereign wealth fund, created a mere 20 years ago, now controls about one per cent of all publicly traded shares in the world.
It’s a rainy-day fund, set up because oil won’t flow forever. And Norway’s oil production has dropped to one-half of what it was in 2001, according to Huffington Post business editor Daniel Tencer in a recent article. Alberta established a Heritage Trust Fund in 1976, but stopped contributing to it. According to a report last month by the Macdonald-Laurier Institute, the total topped out a $17 billion, about one-tenth what it could have grown to with a strategy like Norway’s………………………………………..Full Article: Source

London or Paris: which is the club for Russia’s Ukraine debt?

Posted on 30 March 2015 by VRS  |  Email |Print

Russia lent Ukraine the $3 billion in December 2013 out of its “rainy day” sovereign wealth fund, structuring the debt as a two-year Eurobond governed by London law. That, experts agree, was a canny move, firstly because of the complexity of restructuring Eurobond debt, and secondly, because of an unusual clause allowing Russia to demand repayment early if Ukraine’s debt exceeded 60 percent of annual economic output.
So far Moscow has not demanded the money even though it is probably entitled to do so. Instead it seems intent on tightening the screws in another way - by declaring the bond to be bilateral sovereign debt and therefore not subject to the private creditor “bail-in”………………………………………..Full Article: Source

Why Alberta is Not Like Norway

Posted on 27 March 2015 by VRS  |  Email |Print

Despite generating almost $190 billion in non-renewable resource revenues since 1980, the value of the Heritage Fund stood at $17.3 billion at the end of last year. And of the $33.4 billion in income that it’s thrown off, the Heritage Fund has retained just $4.6 billion.
Norway, in contrast, has managed to save much, much more of its non-renewable resource revenues. The value of its sovereign wealth fund sits at nearly $1 trillion, or $177,000 for every Norwegian citizen. Alberta’s per-capita figure? A shade over $4,300………………………………………..Full Article: Source

GIC bids to cash in on hot sector with $900m sell-off

Posted on 26 March 2015 by VRS  |  Email |Print

The Government of Singapore Investment Corporation is undertaking preparations to bring its $900 million Australian industrial and logistics property portfolio to market as it looks to capitalise on the surge in values in the sector. The group is poised to launch a portfolio offering in mid-2015 that could span about 25 properties across Australia, making it the ­nation’s largest direct industrial property portfolio sale.
The scale would be topped only by corporate deals, such as the Goodman Group-led consortium, including the Canadian Pension Plan Investment Board, Dutch pension group APG and China Investment Corporation, buying the $2.5 billion ING Industrial Fund in 2010………………………………………..Full Article: Source

Paladin Energy raises additional $50m from CIC

Posted on 26 March 2015 by VRS  |  Email |Print

Paladin Energy has raised an additional $US50 million by issuing convertible bonds to a unit of sovereign wealth fund China Investment Corporation (CIC). The proceeds will provide the company with additional funding flexibility.
The uranium miner (PDN) previously agreed to issue convertible bonds worth $US100m to CIC, with the funds to be used for the repurchase of existing convertible bonds due in November. The CIC investment will bolster Paladin’s cash position and reduce the need for any additional funding in the medium term, chief executive John Borshoff said in a statement………………………………………..Full Article: Source

Hutch agrees to buy O2, talks to SWFs

Posted on 26 March 2015 by VRS  |  Email |Print

Li Ka-shing-controlled Hutchison Whampoa has agreed to pay up to £10.25 billion ($15.2 billion) for UK mobile phone firm O2. The deal announced on Wednesday with Spanish parent Telefonica will create the UK’s biggest mobile operator, once O2 is merged with Hutchison 3G UK, and marks Hutchison Whampoa’s largest acquisition ever, as Hong Kong’s richest man Li doubles down on investments in Europe.
Hutchison Whampoa has not revealed any details of who the potential investors might be but, according to a source familiar with the matter, the company is in discussions with investors including sovereign wealth funds and private equity firms. There are a series of discussions going on with investors and a preference for sovereign wealth and pension funds. According to reports, Singapore’s GIC, Canadian pension funds, and Qatar’s sovereign wealth fund are among those that are in talks with Hutchison Whampoa………………………………………..Full Article: Source

Hutchison to buy UK mobile network O2 for £10.25 billion, “in talks with GIC on investing in enlarged business”

Posted on 25 March 2015 by VRS  |  Email |Print

Billionaire Li Ka-shing’s Hutchison Whampoa Ltd. agreed to acquire Telefonica’s O2 unit in the U.K. for more than £10.25 billion (S$20.80 billion) to create the country’s biggest wireless provider by customers. The price includes an initial sum of £9.25 billion in cash, with the remainder to be paid when certain financial targets are met, Telefonica said Tuesday.
Hutchison is selling 30 per cent of the enlarged business, a stake it values at as much as £3 billion, people familiar with the matter said. Hutchison is in talks with investors including Singapore’s sovereign wealth fund GIC and Canada Pension Plan Investment Board, and has also held discussions with potential partners including Qatar’s sovereign-wealth fund, they said………………………………………..Full Article: Source

Social security fund reports 139 bln yuan investment yields

Posted on 25 March 2015 by VRS  |  Email |Print

China’s social security fund gained 139 billion yuan (22.7 billion U.S. dollars) from investment in 2014, with an 11.4 percent return on investment, the National Council for Social Security Fund said on Tuesday. The rate of return outperformed the 6.2-percent return rate in 2013.
Founded in 2000, the fund is designed to solve the country’s aging problem as well as being a strategic reserve to support future social security expenditure. By the end of last year, the fund’s managed assets totaled over 1.5 trillion yuan………………………………………..Full Article: Source

No Risk Too Big as Bond Traders Plot Escape From Negative Yields

Posted on 23 March 2015 by VRS  |  Email |Print

In the negative-yield vortex that is the European bond market, investors are discovering just what lengths they’re willing to go to generate returns. Norway’s $870 billion sovereign wealth fund said this month that it added Nigeria and lifted its share of lower-rated company debt to the highest since at least 2006. Allianz SE, Europe’s biggest insurer, is shifting from German bunds to bulk up on mortgages. JPMorgan Asset Management is buying speculative-grade corporate debt to boost returns.
With the European Central Bank’s fight against deflation pushing yields on almost a third of the euro area’s $6.26 trillion of government bonds below zero, even the most risk-averse investors are taking chances on assets and regions that few would have considered just months ago. That’s exposing more clients to the inevitable trade-off that comes with the lure of higher returns: the likelihood of deeper losses………………………………………..Full Article: Source

1MDB: So where did the money go?

Posted on 23 March 2015 by VRS  |  Email |Print

At its annual report launch last week, Bank Negara deputy governor gave a relatively healthy assessment of the country’s economy. So glowing was the report, however, that several members of the audience felt compelled to ask his opinion of 1MDB, the proverbial elephant in the room.
He essentially responded by saying that “sovereigns” (meaning government-backed entities) are not monitored as closely as are “corporates” (meaning the private sector) in their respective issuance of bonds and similar financial instruments. This is presumably because a bond or debt obligation issued by a government authority is usually assumed as low-risk, given that they are backed by the taxing power of the said government………………………………………..Full Article: Source

Singapore fund declares big Dollar General stake

Posted on 20 March 2015 by VRS  |  Email |Print

A major global investment firm doesn’t appear too worried about the prospects for Dollar General following its failed bid for rival Family Dollar and the pending retirement of Chairman and CEO Rick Dreiling and CFO David Tehle. GIC Private, the former Government of Singapore Investment Corp., this week declared a 5.0 percent stake in Goodlettsville-based Dollar General.
The sovereign wealth fund manages more than $100 billion and employs about 1,200 people worldwide. Its stake in Dollar General, which has risen about 7 percent (Ticker: DG) so far this year, is worth about $1.1 billion………………………………………..Full Article: Source

Ghana to use part of $600m sovereign wealth fund to manage shortfall in crude revenue

Posted on 19 March 2015 by VRS  |  Email |Print

The Minister of Finance, Seth Terkper says the country would use part of its sovereign wealth fund, which has accumulated $600 million to manage current economic challenges brought about by the shortfall in projected oil revenue. Speaking at the opening of the Financing the Future Conference in Accra, Ghana, March 17, 2015, he said the stabilisation fund has accumulated $600 million so far.
Mr. Terkper noted that since the country attained its middle income status, access to concessional financing has decreased significantly. “Inflows from our development partners are highly volatile showing a cyclical effect (especially in election year when DPs adopt a wait-and-see approach to aid delivery)………………………………………..Full Article: Source

Orji: SWF Has ‘Good Year’ Tapping Dollar Investments

Posted on 19 March 2015 by VRS  |  Email |Print

Nigeria’s $1.55 billion sovereign wealth fund (SWF) had a “good year” after weighting its investments toward dollar assets, according to Chief Executive Officer, Mr. Uche Orji. “Our currency position was great as we were very long the dollar,” Bloomberg quoted Orji, a former Goldman Sachs Incorporated banker and head of the Nigerian Sovereign Investment Authority to have said in an interview in Geneva.
The Abuja-based wealth fund, set up by Nigerian President Goodluck Jonathan in 2011, gained exposure to the dollar through equities, private equity and fixed-income assets, said Harvard-trained Orji. The fund, which invests revenue generated when the OIL PRICE exceeds that budgeted by the government of Africa’s biggest crude producer, has adjusted to the market slump since June, he added………………………………………..Full Article: Source

Nigeria’s $1.55 bn SWF Has ‘Good Year’ Tapping Into Dollar Investments

Posted on 18 March 2015 by VRS  |  Email |Print

Nigeria’s $1.55 billion sovereign wealth fund had a “good year” after weighting its investments toward dollar assets, according to Chief Executive Officer Uche Orji. “Our currency position was great as we were very long the dollar,” Orji, a former Goldman Sachs Group Inc. banker and head of the Nigerian Sovereign Investment Authority, said in an interview in Geneva on Monday. “It was the only game in town.”
The Abuja-based wealth fund, set up by Nigerian President Goodluck Jonathan in 2011, gained exposure to the dollar through equities, private equity and fixed-income assets, said Harvard-trained Orji. The fund, which invests revenue generated when the oil price exceeds that budgeted by the government of Africa’s biggest crude producer, has adjusted to the market slump since June, he said………………………………………..Full Article: Source

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