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Sovereign Wealth Funds Briefing - Category | Financials more

Sovereign funds sold equities across the board in 2015, fleeing broad indices

Posted on 02 March 2016 by VRS  |  Email |Print

Sales by sovereign wealth funds of $46.4 billion of assets in 2015 involved heavy redemptions of “passive” or index-tracking equity strategies in both developed and emerging markets, new data showed on Tuesday.
Following a report last week of the headline $46.4 billion outflows from external managers, research firm eVestment this week revealed a detailed breakdown. It shows sovereign wealth fund (SWF) withdrawals were concentrated in equities, largely indiscriminate, and from the most liquid segments of their investments………………………………………..Full Article: Source

Oil Has Sovereign Wealth Funds Hitting Sell Button

Posted on 02 March 2016 by VRS  |  Email |Print

The last thing Libya needs is low oil prices. Racked by a civil war that’s ground the economy to a halt, the nation, which holds the largest proven crude reserves in Africa, is burning through its cash reserves. The longer the conflict lasts, the more Omar (Masinessa) Khattaly, head of the Libyan Investment Authority’s $5 billion real estate and hotel portfolio, fears for the future of the $67 billion sovereign wealth fund.
“I’m afraid if the situation remains at the level that it is at this point, I think we might see some trophy buildings out for sale in the market in the future,” Khattaly said. “But I think LIA will not be the only sovereign wealth fund that will have to take that route. I think many sovereign wealth funds out there will have to do the same.”……………………………………….Full Article: Source

SOFAZ gets 9.5% decline in assets

Posted on 02 March 2016 by VRS  |  Email |Print

Budget revenues of the State Oil Fund of the Republic of Azerbaijan (SOFAZ) for the period of January-December, 2015 reached 7,721.1 million manats, while budget expenditures constituted 9,187.7 million manats.
SOFAZ told APA-Economics that revenue of 7,385.5 mln. manats was received from implementation of oil and gas agreements, including 7,369.6 mln. manats from the sale of profit oil and gas, 2.2 mln. manats as acreage fees, 2.1 mln. manats as bonus payments and 11.6 mln. manats as transit payments………………………………………..Full Article: Source

Olam posts losses but food business still robust

Posted on 01 March 2016 by VRS  |  Email |Print

Temasek Holdings-controlled Olam International posted a loss in the fourth quarter due to a one-time hit, although the commodities trader remains upbeat on its core food business despite the rout in markets.
In a filing to the Singapore Exchange on Monday, Olam reported a loss of S$221.3 million ($157.2 million) in the fourth quarter, including a one-time fair value loss of S$192.6 million from Olam’s investment in PureCircle, which produces the natural sweetener stevia………………………………………..Full Article: Source

110 Billion Decline in Petroleum Revenues of Norway

Posted on 01 March 2016 by VRS  |  Email |Print

General government surplus is estimated at NOK 180 billion in 2015. Due to a substantial decrease in petroleum revenues, this is close to NOK 100 billion NOK lower than the previous year. Petroleum revenues totalled NOK 184 billion in 2015, according to preliminary figures.
General government revenue excluding petroleum is calculated at slightly less than NOK 1 500 billion in 2015 – an increase of almost 7 per cent from 2014. Income from interest and dividends in the Government Pension Fund Global, as well as taxes from households and companies in Mainland Norway, were contributing factors to this………………………………………..Full Article: Source

Mubadala is said to explore SR Technics sale, Satellite IPO

Posted on 29 February 2016 by VRS  |  Email |Print

Mubadala Development Co, the Abu Dhabi investment fund, is considering the sale of Swiss aircraft-maintenance business SR Technics and an initial public offering of Yahsat Satellite as the emirate reviews its largest state- owned companies, according to four people with knowledge of the matter.
The government-backed fund has held talks on the possible transactions with banks and any deal will depend on market conditions, the people said, asking not to be identified because the talks are private. Mubadala is also seeking the sale of a stake in US chipmaker Globalfoundries Inc, one of the people said………………………………………..Full Article: Source

GIC backs Blackstone in Rundle Place purchase

Posted on 25 February 2016 by VRS  |  Email |Print

Singapore’s sovereign wealth fund GIC has backed Blackstone’s $400 million acquisition of Rundle Place in Adelaide with financing. The Australian Financial Review understands the fund provided mezzanine debt for the private equity giant, which bought the property in early January in what was South Australia’s largest commercial property transaction to date.
The deal demonstrates there is opportunity for foreign providers to be competitive on providing loans at a time when domestic banks and lenders are tightening conditions for property investors………………………………………..Full Article: Source

Khazanah and Temasek battle it out for bond investors

Posted on 24 February 2016 by VRS  |  Email |Print

Two of Asia’s rarest quasi-sovereign credits choose the same day to launch landmark bond deals on Tuesday, with a $750 million global sukuk issue from Malaysian sovereign wealth fund Khazanah Nasional Berhad and a €1.1 billion deal from its Singaporean counterpart Temasek.
Both deals were ground breaking transactions in their own right given that Khazanah was bringing its first straight dollar sukuk and Temasek has never issued in euros before. However, some market participants queried why Temasek decided to press the button on its deal knowing that Khazanah was already in the market………………………………………..Full Article: Source

Swiss bank linked to 1MDB sold for US$1.3b

Posted on 24 February 2016 by VRS  |  Email |Print

EFG International AG has agreed to pay 1.33 billion Swiss francs (US$1.34 billion) for Grupo BTG Pactual SA’s Swiss private-banking unit BSI Ltd in a deal that could catapult it into the nation’s top-five money managers for the wealthy.
The acquisition, which comes five months after Brazil-based BTG Pactual (BBTG11.SA) sealed a deal to buy BSI for 1.25 billion francs, will be paid for in cash and stock. Under terms of the deal, EFG will incorporate BSI, making BTG Pactual the No 2 partner in the combined firm after Greece’s Latsis family………………………………………..Full Article: Source

SWFs of oil-rich countries are selling stocks big time

Posted on 23 February 2016 by VRS  |  Email |Print

Sovereign wealth funds of oil-rich countries like Norway, Saudi Arabia, Russia and Qatar sold more than $213 billion worth of stocks in 2015, a report by Sovereign Wealth Fund Institute said. With oil prices staying low, the global sell-off is likely to continue in 2016. Wealth funds could withdraw more than $404 billion from global stock markets if oil prices remain between $30 and $40 per barrel this year, the SWFI said.
Crude prices collapsed more than 70% in the last 18 months. The plunge means many oil countries are facing growing holes in their budgets. Rather than raising taxes or cutting spending, many have resorted to tapping their rainy day funds………………………………………..Full Article: Source

SOFAZ sells about $177M to Azerbaijani banks Feb. 22

Posted on 23 February 2016 by VRS  |  Email |Print

Azerbaijani state oil fund SOFAZ sold $177.45 million to 13 local banks through auctions held by Azerbaijan’s Central Bank (CBA) Feb. 22. “Despite that SOFAZ offered $200 million for sale through auctions, $177.45 million were sold to the banks,” the fund has said.
Thus, SOFAZ will continue selling foreign currency through auctions in 2016. The foreign currency is sold as part of SOFAZ’s transfers to Azerbaijani state budget, which are envisaged to stand at six billion Azerbaijani manats in 2016………………………………………..Full Article: Source

Sovereign wealth funds pull at least $46.5bn from asset managers

Posted on 22 February 2016 by VRS  |  Email |Print

Asset managers suffered record outflows from sovereign wealth funds in 2015 and have been warned to expect even greater redemptions this year as the oil price collapse drives governments to raid their state-owned investment vehicles.
State funds pulled at least $46.5bn from asset managers in 2015 — far greater than the sovereign outflows recorded at the height of the financial crisis — in a bid to prop up their economies, according to figures given exclusively to FTfm by eVestment, the data provider………………………………………..Full Article: Source

Thailand’s $2.8b Future Fund may increase corpus. China’s CIC among potential investors

Posted on 19 February 2016 by VRS  |  Email |Print

The Thai government is looking to raise the corpus of the 100 billion baht ($2.8 billion) Thailand Future Fund (TFF), after overseas investors, including China Investment Corporation, expressed interest in investing in this vehicle, officials aware of the development said.
Thai government officials said several institutional investors had shown interest in committing capital towards this infrastructure fund, that is scheduled to launch later this year, with the most prominent being China Investment Corporation (CIC), the Chinese sovereign wealth fund responsible for managing part of that country’s foreign exchange reserves………………………………………..Full Article: Source

Norway oil fund close to peak, uncertain returns ahead

Posted on 19 February 2016 by VRS  |  Email |Print

The size of Norway’s $810 billion sovereign wealth fund, the world’s biggest, may have peaked as oil prices collapsed and Oslo gets ready for its first net cash withdrawal, the central bank said.
Built from oil and gas revenues over a 20-year period, the fund is invested in foreign stocks, bonds and real estate to share the country’s hydrocarbon wealth with future generations and avoid creating asset bubbles at home. The fund’s rules allow the government to withdraw up to four percent of its value annually and its growth in previous years had always exceeded the level of withdrawals………………………………………..Full Article: Source

Norway clears Iran debt purchases by massive govt fund

Posted on 19 February 2016 by VRS  |  Email |Print

Norway said on Thursday it had authorised its pension fund, the world’s largest sovereign wealth fund, to resume Iranian government bond purchases in the wake of a deal phasing out sanctions against Tehran.
The fund, which is worth nearly 7 trillion kroner (€735 billion, $814 billion) and targets a 35-percent share of bonds in its portfolio, had been barred from buying into Iranian debt since January 2014 because of sanctions over Iran’s nuclear programme. North Korea and Syria, also hit by sanctions, remain off limits to the fund. But since a deal on Iran’s nuclear programme, signed in July 2015, economic sanctions against Iran are being phased out, the Norwegian finance ministry noted in a statement………………………………………..Full Article: Source

KIC CEO promises to expand asset trust to $200 billion by 2020

Posted on 18 February 2016 by VRS  |  Email |Print

Having reported a negative return last year, South Korea’s sovereign wealth fund Korea Investment Corp. (KIC) decided to up the scale of asset trust by 2.5 times from current levels to $200 billion by 2020. The corporation will install the offices of auditor and risk management officer to reinforce oversight of the state asset agency.
KIC CEO Eun Sung-soo said KIC will incrementally increase its asset from last year’s $80 billion to $200 billion by 2020 to raise efficiency in asset management………………………………………..Full Article: Source

Temasek Pares Alibaba Stake While Adding Rival JD.com

Posted on 18 February 2016 by VRS  |  Email |Print

Temasek Holdings Pte pared its holdings in China’s biggest online retailer Alibaba Group Holding Ltd. in the fourth quarter while buying shares of other Chinese online companies, including Alibaba’s biggest competitor, JD.com Inc. Singapore’s state-owned investment firm sold 548,769 American depositary receipts in Alibaba, leaving it with 47.5 million.
The value of the holding increased by $1.03 billion to $3.86 billion as the shares gained 38 percent in the period. Among Temasek’s new acquisitions were 6.1 million ADRs in Chinese online retailer JD.com and 8.2 million ADRs in Chinese online travel company Tuniu Corp………………………………………..Full Article: Source

Track the missing sovereign wealth billions

Posted on 18 February 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………………………………………..Full Article: Source

Middle East funding for Indian roads

Posted on 17 February 2016 by VRS  |  Email |Print

Funding from the Middle East looks set to help develop new Indian highway projects. Some $15.6 billion from the Abu Dhabi Investment Authority (ADIA), a UAE-based sovereign wealth fund, will be directed towards highway projects in India. This will be used for 50 highway projects in India on a toll-operate-transfer (TOT) basis.
The Indian Government is planning to award 104 highway projects under the TOT model that will allow investments by private equity firms, infrastructure developers and institutional investors such as pension and wealth funds. The TOT model will also allow the government to hand over operations of tolled roads to the private sector………………………………………..Full Article: Source

Temasek cut Alibaba stake in fourth quarter after shares gained

Posted on 17 February 2016 by VRS  |  Email |Print

Temasek Holdings Pte Ltd cut its stake in Alibaba Group Holding Ltd in the fourth quarter as the biggest Chinese e-commerce company’s shares rallied. Singapore’s state-owned investment firm sold 548,769 American depositary receipts in Alibaba, leaving it with 47.5 million, according to a filing with the US Securities and Exchange Commission on Tuesday.
The value of the holding increased by US$1.03bil (RM4.32bil) as the shares gained 38% in the period. Temasek also increased its stakes in pharmaceuticals maker Gilead Sciences Inc by 1.4 million shares, and added 888,545 shares in BioMarin Pharmaceutical Inc, a maker of therapeutic enzyme products………………………………………..Full Article: Source

Alaska Permanent returns 2.1% for quarter, missing its benchmark

Posted on 17 February 2016 by VRS  |  Email |Print

Alaska Permanent Fund Corp., Juneau, returned 2.1% for the quarter ended Dec. 31 and -2.2% for the first half of its fiscal year, said a news release from the $52 billion sovereign wealth fund. The permanent fund’s performance benchmark returned 3.1% and -2.6%, respectively, during the same periods. The sovereign wealth fund’s fiscal year started July 1.
“A rally this fall helped make up some of the ground lost in the first quarter, but in the end it wasn’t enough to bring the permanent fund back to positive performance for the first half of the fiscal year,” said Angela Rodell, CEO/executive director, in the news release. “The slowdown in the Chinese economy and drops in commodity prices, including oil, have weighed on global markets, bringing a several-year period of growth to an end.”……………………………………….Full Article: Source

Are Sovereign Wealth Funds Roiling Global Financial Markets?

Posted on 16 February 2016 by VRS  |  Email |Print

We’ve all be witnessing incredible selling pressure on financial markets all over the world, with new multi-year lows showing up in equities and various asset classes. After years of relentless bull market action, we’re seeing a substantial change in the way that markets behave.
The one question that many investors have been asking as of late is how did equity markets become so closely correlated with the price of crude oil? Enter Sovereign Wealth Funds into the picture. There has been some recent speculation regarding large sovereign wealth funds (SWF’s) heavily liquidating assets. If true, it’s not difficult to imagine which ones are doing the selling………………………………………..Full Article: Source

Malaysia: The 1MDB money trail

Posted on 16 February 2016 by VRS  |  Email |Print

The chief executive of BSI, the Swiss private bank, was jubilant about its foray into Asia. So much so that he wrote to a star employee in Singapore who had helped lead the effort. “I wanted to personally thank you for your immense contribution not only to the growth of our new Asia business, but to BSI Group as a whole,” enthused the December 2011 letter from Alfredo Gysi, who is now BSI’s honorary chairman.
What a difference four years makes. Today that same bank official in Singapore, Yak Yew Chee, is battling a criminal investigation by the city-state’s authorities on suspicion that he benefited “from criminal conduct”………………………………………..Full Article: Source

UAE federal bonds issue to bolster country’s banks, says Arqaam Capital

Posted on 16 February 2016 by VRS  |  Email |Print

The UAE’s forthcoming fed­eral bond issue is good news for the country’s banks, which have endured falling deposits as government-related entities withdraw cash, said the investment bank Arqaam Capital yesterday in a research note.
“In 2015, the UAE funded its deficit shortfall through the drawdown of government deposits, sale of foreign assets and a credit line from its sovereign wealth fund,” said Jaap Meijer, head of research at Arqaam Capital. The Abu Dhabi government, which is the largest contributor to the federal budget, has a long-standing arrangement with the Abu Dhabi Investment Authority that allows it to withdraw cash from the sovereign wealth fund to fund its deficit………………………………………..Full Article: Source

Raid Future Fund ‘at your peril’

Posted on 15 February 2016 by VRS  |  Email |Print

Current turbulent world markets are a reminder that governments should have some financial “insulation” such as sovereign wealth funds for when times are tough, says Future Fund chairman Peter Costello.
The comments come as the former federal treasurer steps up calls for future governments not to raid the $120 billion fund when the cashflow becomes available from 2020. The government has access to the assets of the fund from July 2020 to pay out the superannuation liabilities of public servants, which could come to about $9bn a year………………………………………..Full Article: Source

NIIF may pick up stake in infra financing PSUs

Posted on 15 February 2016 by VRS  |  Email |Print

Government is considering a proposal to dilute its stake in a host of infrastructure financing institutions such as REC, PFC and IIFCL through the newly created National Investment and Infrastructure Fund (NIIF).
“It is at a very preliminary stage. Among various things, the Finance Ministry is also looking at a issue if NIIF can pick up stake in state-owned entities that are into infrastructure financing,” official sources said. A sub-fund of NIIF could pick up stake in companies like Rural Electrification Corporation (REC), Power Finance Corporation (PFC) and India Infrastructure Finance Company Ltd (IIFCL), sources said………………………………………..Full Article: Source

Sovereign Wealth Funds: This Could Trigger a Stock Market Crash in 2016

Posted on 15 February 2016 by VRS  |  Email |Print

Who or what is triggering the sell-off in the markets? The first weeks of 2016 have been turbulent at best. Nobody can take the blame exclusively. Yet there are distinct market forces that have been liquidating large positions. Among those responsible, the oil-producing countries’ sovereign wealth funds (SWFs) may be the ones to blame for the stock market crash in 2016.
Rothschild & Sons Deputy Chairman Paolo Scaroni told Bloomberg, “They [SWFs] are selling, they are selling a lot… This is a key reason I believe that the stocks of the big financial institutions have been hit so hard in the market selloff.”……………………………………….Full Article: Source

SOFAZ earns 27 million pounds on real estate in London

Posted on 12 February 2016 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ earned around 27 million pounds on real estate in London as of January 1, 2016. The real estate, located at Saint James Street in London, was purchased by SOFAZ for 177.35 million pounds in 2012, the Company reported on February 10.
“After the real estate was leased until late 2015, SOFAZ received income worth about 27 million pounds,” the statement said. “Currently, this real estate is estimated at 213 million pounds. Taking into account the high liquidity on the real estate market in London, this asset can be sold at a specified price within a short period.”……………………………………….Full Article: Source

Sovereign funds’ selling could hit $700 billion of European stocks

Posted on 11 February 2016 by VRS  |  Email |Print

Up to $700 billion (481.70 billion pounds) of European stocks, including major banks, could be in the firing line as the slump in oil prompts some producer countries’ sovereign wealth funds to offload investments.
Fund managers and investors say recent sharp selloffs in global markets and especially European stocks may have been exacerbated by national rainy-day funds selling parts of their equity portfolios to ease squeezed public finances. That might also help explain why European bank stocks have lost nearly a quarter of their value since the start of the year, a $240 billion wipe-out more brutal than at the start of the financial crisis in 2008………………………………………..Full Article: Source

GIC increases stake in Dollar General Corporation in $382m deal

Posted on 11 February 2016 by VRS  |  Email |Print

GIC Private Ltd has increased its stake in NYSE-listed Dollar General Corporation, a chain of US-based stores that targets segments of the market not served by the US retailer Walmart.
Dollar General Corporation is a discount retailer which focuses on retailing a selection of merchandise that includes consumables, seasonal, home products and apparel. To date, its merchandise includes national brands and private brands selections within the US market, where it operates approximately 11,879 stores located in over 43 US states………………………………………..Full Article: Source

SOFAZ discloses income earned on real estate in London

Posted on 11 February 2016 by VRS  |  Email |Print

As of January 1, 2016, the State Oil Fund of Azerbaijan (SOFAZ) earned around 27 million pounds on real estate in London, SOFAZ said Feb. 10. The real estate, located at Saint James Street in London, was purchased by SOFAZ for 177.35 million pounds in 2012, the statement said.
“After the real estate was leased until late 2015, SOFAZ received income worth about 27 million pounds,” the statement said. “Currently, this real estate is estimated at 213 million pounds. Taking into account the high liquidity on the real estate market in London, this asset can be sold at a specified price within a short period.” In total, as of January 1, 2016, the yield on this asset amounted to more than 30 percent………………………………………..Full Article: Source

Azeri state fund sees smaller 2016 revenues, says will support manta

Posted on 10 February 2016 by VRS  |  Email |Print

Azeri state oil fund SOFAZ expects less revenue this year than envisioned and a lower assets valuation due to falling oil prices, but will continue to support the country’s ailing manat currency, its deputy CEO said on Tuesday. The Caucasus nation of about 10 million people relies on oil and gas exports to cover 75 percent of its revenues, but the oil price nosedive has triggered a plunge in the manat.
In a budget approved earlier, SOFAZ, a $34 billion sovereign wealth fund, projected revenue of $4.2 billion in 2016. “Taking into account that the average price of oil is expected to be lower than the budget assumption of $50 per barrel, (our) revenues are expected to be lower for 2016,” deputy CEO Israfil Mammadov said in an e-mailed answer to Reuters questions………………………………………..Full Article: Source

India, UAE to scale up trade to $100 bn

Posted on 10 February 2016 by VRS  |  Email |Print

India and the UAE will be looking to majorly scale up their bilateral trade to $100 billion in the coming years during the visit of Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan to New Delhi beginning Wednesday. India is the UAE’s largest trading partner while the UAE is India’s third-largest trading partner. In the 1970s, trade was valued at $180 million annually.
The Abu Dhabi Investment Authority has a sovereign wealth fund of about $800 billion, which India is seeking to tap for its infrastructure sector. The UAE is the 10th biggest foreign investor and the biggest Arab investor in India, with investments of roughly $10 billion………………………………………..Full Article: Source

Temasek launching new $150m ‘Red Dot’ fund for mature Israeli technology startups

Posted on 08 February 2016 by VRS  |  Email |Print

Temasek Holdings, Singapore’s state-owned investment firm, will soon close a a new $150-million fund to invest in mature Israeli high-tech companies. Temasek Holdings will serve as the anchor investor with other investors joining the fund, DEALSTREETASIA has learnt.
The new fund is called the Red Dot fund, a nickname for the Southeast Asian city-state, and it will invest between $10 million and $15 million in each company in its portfolio. This fund is different from the vehicles used by Temasek Holdings‘ wholly owned investment arm – Vertex Venture Holdings………………………………………..Full Article: Source

Blackstone, GIC, others eye DLF promoters’ 40% stake in rental arm

Posted on 08 February 2016 by VRS  |  Email |Print

Blackstone, GIC, Canada Pension Plan and Qatar Investment Authority are among the 25 global investment firms that have shown interest in buying DLF promoters’ stake in its rental arm, a deal estimated at about $2 billion (Rs 13,532 crore). DLF, the country’s largest realty firm, had in October last announced that its promoters will sell their 40% stake in the DLF Cyber City Developers Ltd (DCCDL).
According to sources, global investment firm Blackstone, Singapore’s sovereign wealth fund GIC, Canada Pension Plan Investment Board (CPPIB), Singapore-based Mapletree, Qatar Investment Authority and Abu Dhabi Investment Authority are among the institutional investors that have evinced interest in taking part in the bidding process………………………………………..Full Article: Source

Qatari investment in London’s Canary Wharf pays off as rents set to soar

Posted on 08 February 2016 by VRS  |  Email |Print

Rents in the Canary Wharf business district are set to rise faster than anywhere else in London this year, according to Knight Frank. The news is a boost to a Qatari-led consortium that completed a takeover of the complex in January last year. Knight Frank said rental growth in 2016 was projected to grow by 12.8 percent, beating out rival Shoreditch, which is expected to see rents grow by 10 percent.
The Qatar Investment Authority (QIA), the Gulf state’s sovereign wealth fund, and US investor Brookfield Property Partners won a $3.8 billion battle to acquire the 69 percent stake in Canary Wharf Group owned by Songbird. The QIA had already owned 29 percent of Songbird………………………………………..Full Article: Source

Temasek arm expects to build Rs 6,000 crore mortgage book in India

Posted on 05 February 2016 by VRS  |  Email |Print

Fullerton India Credit Co Ltd (FICCL), an arm of Singapore’s state-run investment fund Temasek Holdings expects to build a Rs 5,000 crore to Rs 6,000 crore mortgage book in India in the next five years by lending to people in small towns and villages.
On Wednesday, the non banking finance company (NBFC) launched ‘Grihashakti’ through a subsidiary Fullerton India Home Finance which will lend to individuals to buy homes, refurbish houses and raise money against property. FICCL will invest Rs 100 crore in the new venture initially, the company had said in May 2015………………………………………..Full Article: Source

Abu Dhabi to shift $27B out of sovereign wealth fund

Posted on 04 February 2016 by VRS  |  Email |Print

Abu Dhabi, facing huge budget deficits, will likely transfer as much as $27 billion out of its sovereign wealth fund – the Abu Dhabi Investment Authority – into the government treasury, according to a report by Fitch Ratings.
ADIA, the largest sovereign wealth fund in the Middle East, has over $850 million in New York City real estate holdings. The emirate has taken major hits to its government revenues as oil prices have tanked over the past year, along with other major oil producers such as Russia and Saudi Arabia………………………………………..Full Article: Source

Abu Dhabi sovereign wealth fund assets to fall by 5% by end-2016 – Fitch

Posted on 04 February 2016 by VRS  |  Email |Print

The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, is expected to see its assets decline by just over 5 percent this year as the UAE capital attempts to balance its books on the back of the oil price slide.
Ratings agency Fitch said it projected a fall from an estimated $502 billion by end-2014 to $475 billion as outflows outpace investment returns. Abu Dhabi’s budget deficit widened from 7.2 percent in 2014 to 13.2 percent last year, prompted by a drop in oil and gas income………………………………………..Full Article: Source

Future Fund of Australia allocated $100m+ to ILS in 2015

Posted on 02 February 2016 by VRS  |  Email |Print

Australia’s sovereign wealth investment organisation The Future Fund made a $100m+ allocation to insurance-linked securities (ILS), such as catastrophe bonds and collateralized reinsurance, through its mandate with Elementum Advisors in 2015.
According to the Future Fund’s latest annual report the AUD$117 billion sovereign wealth fund, which was designed to support the Australian government’s financial position by providing for unfunded superannuation liabilities, added the ILS allocation as part of its new focus on alternative risk premia investing………………………………………..Full Article: Source

Iran’s $100 billion ‘fully released’

Posted on 02 February 2016 by VRS  |  Email |Print

The government says Iran can now access more than $100 billion in frozen assets after the implementation of a nuclear agreement last month. “These assets have fully been released and we can use them,” Government spokesman Mohammad-Baqer Nobakht said.
The spokesman also said much of the money released belongs to the CBI and the National Development Fund. “The government’s share is about six to seven billion dollars but assets belonging the Central Bank and the National Development Fund are much higher,” Nobakht said………………………………………..Full Article: Source

NZ Super Fund keeps $200mn reinsurance allocation stable in 2015

Posted on 01 February 2016 by VRS  |  Email |Print

The New Zealand Super Fund kept its reinsurance allocation steady at about $200mn in the financial year to 30 June 2015. The sovereign wealth fund yesterday (27 January) reported a 6.5 percent gain over the 2015 calendar year, taking its total portfolio to NZ$29.5bn ($19.2bn).
The fund’s most recent annual report listed a combined allocation of about $200mn as at 30 June last year to its two ILS managers, Leadenhall Capital Partners and Elementum Advisors………………………………………..Full Article: Source

Switzerland names the companies ‘linked to 1MDB scandal’

Posted on 01 February 2016 by VRS  |  Email |Print

The Swiss attorney general’s announcement that $4 billion may have been misappropriated from Malaysian state-owned companies opened a new front in the troubles facing 1Malaysia Development Bhd., or 1MDB, the state-investment fund set up by Prime Minister Najib Razak in 2009. Switzerland’s top prosecutor on Friday named a number of firms in Malaysia, Saudi Arabia and Abu Dhabi in relation to the matter, but gave no details of their roles, if any.
The attorney general’s office said it is examining allegations of criminal activity from 2009 to 2013 relating to PetroSaudi International Ltd., a Saudi oil company; SRC International Sdn Bhd, a unit of Malaysia’s Finance Ministry; Malaysian companiesGenting Group and Tanjong PLC; and a joint venture between 1MDB and an Abu Dhabi sovereign-wealth fund called the Abu Dhabi Malaysia Investment Company………………………………………..Full Article: Source

Swiss Question Use of Malaysian Sovereign Fund Run by Prime Minister

Posted on 01 February 2016 by VRS  |  Email |Print

Days after the prime minister of Malaysia was cleared of wrongdoing in an investigation into transfers of money into his bank accounts, the Swiss government announced Friday that it had found serious indications that funds had been misappropriated from Malaysian state-owned companies.
The sovereign wealth fund at the center of the Swiss inquiry, called 1Malaysia Development Berhad, or 1MDB, has been the focus of several investigations around the world as authorities attempt to ascertain whether money vanished in a series of international business deals………………………………………..Full Article: Source

Petrobras in sovereign fund’s spotlight on corruption fears

Posted on 01 February 2016 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund, Norway’s state pension fund, said Thursday it had placed Brazilian oil group Petrobras “under observation” because of corruption fears following a kickbacks scandal. The move means that the ethics council that advises the Norwegian central bank on the fund’s investments will follow developments closely, which could lead to the fund divesting its holding.
“Should further cases of gross corruption be revealed in Petrobras’ operations in the future and the company cannot satisfy that the anti-corruption programme is being complied with and effectively improved, the condition for exclusion may be met,” the council said in a statement………………………………………..Full Article: Source

Oil prices & the impact on Sovereign Wealth Funds - Libya as a case

Posted on 01 February 2016 by VRS  |  Email |Print

The drop in oil prices in the last 12 months has taken markets and investors by surprise. State institutions such as Sovereign Wealth Funds (SWF) have been affected and state budgets have suffered. SWF will grow slowly and in many cases will see some of their assets declining in value or being liquidated to help with government budget deficits. State foreign exchange reserves will be affected as well.
There are over 77 SWF’s in existence with total assets of over $7.1 Trillion dollars, of which $4 trillion are oil and gas related funds. By the end of 2015 more than 56 percent of the assets of SWFs originated from the sale of oil and gas related products. These funds account for anywhere from 5-10% of total money invested in global markets………………………………………..Full Article: Source

Dividend has a better future outside of the Alaska Permanent Fund

Posted on 01 February 2016 by VRS  |  Email |Print

“The budget, the budget and the budget.” That’s how my colleague — Sen. Click Bishop — outlined the Alaska Legislature’s top three priories this year, and it’s easy to see why. Seventy-five percent of the state’s unrestricted general fund revenue comes from oil, a commodity whose price has seen a rapid drop from $105 per barrel just 19 months ago, down to below $35 per barrel today.
Thanks to an American energy renaissance powered by a revolution in fracking technology, the world is experiencing an oil glut. While this may be great news for our nation in terms of energy independence, it means that our state’s budget is in the deep red to the tune of $3.5 billion or more………………………………………..Full Article: Source

Norway’s oil wealth is an enviable nest egg in hard times

Posted on 29 January 2016 by VRS  |  Email |Print

When times get tough, it never hurts to have €700bn stashed away like Norway does in the world’s biggest sovereign wealth fund, to cushion the blow of plunging oil prices. Oslo has prudently tucked away most of its oil money since the 1990s in order to be able to finance its generous welfare state indefinitely.
Invested in stocks, bonds and real estate, the fund is now worth about 6.96-trillion kroner (€734bn), equivalent to about six annual budgets or more than €137,000 for each of the country’s 5.2-million inhabitants………………………………………..Full Article: Source

Should you follow the Future Fund into cash?

Posted on 29 January 2016 by VRS  |  Email |Print

At the Future Fund’s quarterly portfolio update, the fund’s chairman and founder Peter Costello expressed his pride that the fund had been recognised by the Central Banking Journal as the sovereign investor of the year.
Australia’s $118 billion sovereign wealth fund has built a reputation as one of the most astute investment firms in the world and the award recognised the fund’s conservatism at a time when low returns compelled many investors to take more risk………………………………………..Full Article: Source

Are sovereign wealth funds big sellers in Indian stocks?

Posted on 29 January 2016 by VRS  |  Email |Print

Are sovereign wealth funds (SWFs) big sellers in Indian stocks? The conventional answer to that question is a yes, but data points to another intriguing trend — the rising share of direct sovereign fund investments in India. Assets under management (AUM) of SWFs in Indian equities climbed 14% to Rs 1.74 lakh crore in December 2015 from Rs 1.53 lakh crore a year ago, data compiled by ETIG shows.
An increase in SWF assets at a time of poor market returns shows that they have been buying Indian equities directly though they are sellers in foreign funds where they have parked their money………………………………………..Full Article: Source

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