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Khazanah sees continuation of pro-growth, pro-society focus

Posted on 27 September 2016 by VRS  |  Email |Print

Khazanah Nasional Bhd sees a continuation of a pro-growth and pro-society focus in the upcoming Budget 2017. Managing Director Tan Sri Azman Mokhtar said the budget would also like to be fiscally responsible on the back of a challenging global economic environment.
He added that the country needs to keep the growth engine going to support its development. “The global conditions are quite challenging, but I think Malaysia has many strengths, with geography being one. “I think we can build on that and we look forward to playing our part,” he said. …………………………………….Full Article: Source

Future Fund may not buy more infrastructure: Peter Costello

Posted on 26 September 2016 by VRS  |  Email |Print

Future Fund chairman Peter Costello has warned that the $125 billion fund might have sated its appetite for infrastructure assets by the time the Queensland government accepts reality and reverses its anti-privatisation position.
Speaking after the Future Fund-led Lonsdale consortium paid an eye-popping $9.7bn on Monday for a 50-year lease of the Port of Melbourne, Costello noted the irony of the Queensland government-owned QIC’s participation in the well-timed privatisation of the nation’s leading container port…………………………………….Full Article: Source

Taking a look at Temasek’s bid to privatise SMRT

Posted on 26 September 2016 by VRS  |  Email |Print

Singapore’s stock market is witnessing an interesting trend. A number of high-profile companies have either delisted, or announced their intention to do so. However, no other company’s proposed privatisation has generated as much interest as that of SMRT.
First, it is hard to find another publicly listed company that affects the lives of millions of Singaporeans on a daily basis. Second, the fact that Temasek Holdings is proposing to fully acquire SMRT adds another dimension to the interest level…………………………………….Full Article: Source

It’s (Still) Good to be Norway

Posted on 23 September 2016 by VRS  |  Email |Print

The country created a government-run pension fund in the 70s and began investing profits abroad in 1990. Today, according to The Economist, “No sovereign-wealth fund is bigger. It owns more than 2% of all listed shares in Europe and over 1% globally. Its largest holdings are in Alphabet, Apple, Microsoft and Nestlé, among 9,000-odd firms in 78 countries.”
With the decline in oil prices, however, making solid investments becomes more crucial. And even with the canniest managers, the fund may not be the envy of the world forever. It may be impossible for democracies to sustain a rich wealth fund, the Economist points out. Too many people have a say in where they funds are invested and many of them put ideology over high returns………………………………………Full Article: Source

Kazakh wealth fund says 34 firms sold in privatisation drive

Posted on 22 September 2016 by VRS  |  Email |Print

Kazakhstan’s $65 billion sovereign wealth fund Samruk-Kazyna has sold 34 small and mid-sized companies by public auction as part of its privatisation drive, a managing director of the fund said on Wednesday.
Baljeet Grewal declined to say who had bought the companies, or how much has been raised in the first phase of an ambitious five-year plan which will culminate in public offerings of stakes in some of the country’s biggest companies. The oil-rich Central Asian nation was hit hard by the collapse in world oil prices from a high of $115 in June 2014 to a trough of $27 in January 2016…………………………………….Full Article: Source

SWFs commit capital to central and eastern Europe

Posted on 20 September 2016 by VRS  |  Email |Print

Sovereign wealth funds have become the first institutional investors to commit capital to a new direct equity venture by the European Bank for Reconstruction and Development targeting emerging markets.
China’s State Administration of Foreign Exchange and the State Oil Fund of Azerbaijan have committed a combined €350 million in the first round of fundraising for the Equity Participation Fund, according to a September 19 statement……………………………………….Full Article: Source

Norway’s Sovereign Wealth Fund Hampered by Outflows

Posted on 13 September 2016 by VRS  |  Email |Print

Norway’s government is withdrawing funds from the nation’s $890 billion sovereign wealth fund as it faces lower prices on crude oil and low-to-negative interest rates. Bloomberg’s Jonas Bergman examines how this may hamper the fund’s ability to manage more risk. He speaks on “Bloomberg Markets.……………………………………….Full Article: Source

Libya’s Rival Sovereign-Wealth Fund Chiefs Seek Truce

Posted on 07 September 2016 by VRS  |  Email |Print

Management of the frozen $67 billion fund has been the subject of a power struggle between competing governments. Rival chairmen of Libya’s $67 billion sovereign-wealth fund say they want to settle their differences and unify its management, seeking to end a feud that began during the country’s civil war.
The Libyan Investment Authority, or LIA, is suing New York-based Goldman Sachs Group Inc. and Paris-based Société Générale SA for billions of dollars in the High Court in London over failed investments. The chairmen said in interviews with The Wall Street Journal that they want to combine their efforts to cut legal costs and simplify operations………………………………………..Full Article: Source

This Way to the Egress

Posted on 07 September 2016 by VRS  |  Email |Print

Sovereign wealth funds were once referred to as white knights when it came to them bailing out a number of global investment banks such as Citigroup, Merrill Lynch and UBS during the financial calamity of 2007. To this day, wealth funds continue to amass tremendous financial firepower in the trillions, despite headwinds such as the oil glut, heightened geopolitical tensions, slowdown of global consumer demand and the possible rise of new protectionism.
In 2014, sovereign wealth funds directly invested US$ 33.4 billion into the financial sector, according to data from SWFI’s Sovereign Wealth Fund Transaction Database. In 2015, the sovereign fund transaction figure toward financials dramatically fell to just US$ 18.76 billion. There has been a clear shift in what sovereign wealth funds want and are willing to invest millions into………………………………………..Full Article: Source

CIC sets its sights on major global role

Posted on 06 September 2016 by VRS  |  Email |Print

China Investment Corporation is expected to become the world’s largest sovereign wealth fund in two years with assets totaling $1 trillion under management by that time. “We have laid solid foundations in the past nine years, and we will stick to our original aim of becoming a world leading and respectable sovereign wealth fund,” Ding Xuedong, chairman and CEO of China Investment Corporation, said.
China Investment Corporation had assets totaling more than $810 billion under management by the end of 2015, and its annualized growth rate of State-owned capital reached 15.3 percent since CIC’s inception, according to CIC’s financial report of 2015. “CIC’s assets under management will exceed $1 trillion in two years based on this growth,” said Ding………………………………………..Full Article: Source

China’s CIC Boosts Direct Investments in Search of Returns

Posted on 06 September 2016 by VRS  |  Email |Print

Bespectacled and with a professorial demeanor, Ding Xuedong smiles broadly as he walks the hallways of China Investment Corp’s headquarters, but the staff knows full well that the chairman carries a big stick.
Since taking the helm of CIC in July 2013, Ding has restructured China’s influential sovereign wealth fund by overhauling top management, shifting power over its $250 billion global portfolio from a handful of individual managers to investment teams, and conducting periodic audits to guard against corruption and conflicts of interest between managers and the investments they make………………………………………..Full Article: Source

Future Fund looks to venture in private markets for growth

Posted on 05 September 2016 by VRS  |  Email |Print

The Future Fund is looking to venture and early-stage opportunities in its private equity markets for growth, as it sees risk and fragility in listed markets. “Listed equities, to put it politely, were lacklustre over the last financial year. The world index lost 2.7 per cent in global currency terms, the local market just squeezed into positive territory with a 0.2 per cent return,” said David Neal, chief executive of the Future Fund.
He added the source of the $123 billion sovereign wealth fund’s 4.8 per cent return for the 2015/16 financial year came from its private markets portfolio………………………………………..Full Article: Source

After years of success, Future Fund prepares for hard times

Posted on 02 September 2016 by VRS  |  Email |Print

Chairman Peter Costello can justifiably be proud of the achievements of the Future Fund. Ten years after he established it as federal treasurer — setting up strict guidelines for its operation, to set aside what were windfall profits to help meet superannuation liabilities for public servants — the fund has doubled in size.
From government seed capital of $60.5 billion (proceeds from of the sale of Telstra and budget surpluses), the fund has grown to $123bn from its own investments………………………………………..Full Article: Source

Challenging times ahead for investment: Future Fund’s Peter Costello

Posted on 02 September 2016 by VRS  |  Email |Print

Future Fund chairman Peter Costello has warned of rising investment risks and lower returns despite the nation’s sovereign wealth fund rebounding from its first quarterly loss in four years.
It comes a slower market returns force the fund to look increasingly to private investments to maintain its performance in its second decade. The former federal treasurer also waded into the ongoing debate over monetary policy, signalling it was time for the world to focus on other means to stimulate the economy………………………………………..Full Article: Source

Future Fund puts private equity on notice over fees

Posted on 02 September 2016 by VRS  |  Email |Print

The Future Fund’s chief investment officer has warned the private equity industry that the days of charging generous performance fees for returns based on “luck or lazy use of leverage” have gone forever.
Raphael Arndt told the AVCAL Alpha Conference in Melbourne that true value creation strategies were now more important than ever for the $123 billion sovereign wealth fund. “Ensure that you are focused on true value-add, are flexible with fees and terms and, most of all, operate in a transparent way,” Arndt said………………………………………..Full Article: Source

Future Fund says private equity’s ‘lucky, ‘lazy’ days are ‘gone forever’

Posted on 02 September 2016 by VRS  |  Email |Print

The investment chief of Australia’s sovereign wealth fund has told the local private equity industry he wants to allocate more capital to it but first needs to see better transparency on fees.
Future Fund chief investment officer Raphael Arndt said there had “never been a more important time” for long-term investors to have a meaningful exposure to private equity, as he called on the local industry to do more to make its fees and terms “world class”. “The role of private equity, and in particular venture capital, in our portfolio is more important now than it has ever been.” ……………………………………….Full Article: Source

No time to pursue risks, says Future Fund chairman Peter Costello

Posted on 02 September 2016 by VRS  |  Email |Print

Future Fund chairman Peter Costello has forecast lower investment returns are coming and warned investors against taking increased risks to try to compensate for a shortfall in earnings. “There will be very difficult trading conditions going forward. Returns are at historic lows,” he said.
“This is a very difficult yield environment and it means we are looking very carefully for ways to maximise yields while not chasing the risk too far.” Costello’s warning comes as the government’s sovereign wealth fund pared back its allocations to high-risk assets and beefed up its holdings of low-risk cash and debt securities………………………………………..Full Article: Source

Governments have ‘limited firepower’ to deal with future financial shocks: Future Fund

Posted on 02 September 2016 by VRS  |  Email |Print

Future Fund chairman Peter Costello says governments are “running out of shots” to protect against any future financial shocks. The head of Australia’s $123 billion sovereign wealth fund said monetary policy alone was no longer enough to stimulate growth in the global economy.
This was creating a growing sense of unease among the investment community that governments would be powerless in the face of another GFC………………………………………..Full Article: Source

Frustrated Sovereign Wealth Funds Pursue Corporate Debt

Posted on 02 September 2016 by VRS  |  Email |Print

As wealth funds crave yield and security, are U.S. corporate bonds the only game in town?Demand for corporate bonds in the United States and Europe remains robust, each driven by differing factors.
The boom in investment-grade U.S. corporate debt is in lockstep with the incremental decline in U.S. interest rates and further quantitative easing measures enacted by the Federal Reserve. Bond sales in 2016 by U.S. blue chip companies are about to surpass US$ 1 trillion, continuing the upward trajectory since 2009………………………………………..Full Article: Source

Is East Africa Ready for a Sovereign Wealth Fund?

Posted on 31 August 2016 by VRS  |  Email |Print

Kenya, Uganda and Tanzania are among the new frontier economies in the oil and gas industry that have over the last decade announced significant hydrocarbon discoveries.
These East Africa Countries (EAC) countries have introduced laws to manage oil and gas resources for the benefit of all stakeholders. Kenya, for instance, introduced a petroleum act earlier this year; the Act stipulates that 75% of the proceeds from commercial oil and gas produced be retained by the national government, with county governments hosting the deposits receiving 20% and local community receiving 5%………………………………………Full Article: Source

Biggest Wealth Fund Warns Outflows Are Affecting Risk Strategy

Posted on 29 August 2016 by VRS  |  Email |Print

Norway’s $890 billion sovereign wealth fund is acknowledging that rising withdrawals by the government could hamper its quest to manage more risk and generate greater returns as it takes on more and more negative yielding securities.
The net outflows are “relevant for how we think about the risk-bearing capacity of the fund,” Egil Matsen, the deputy governor at Norway’s central bank who’s in charge of oversight of the fund, said in an interview Friday while attending a central banking conference in Jackson Hole, Wyoming……………………………………….Full Article: Source

Azerbaijan: Aiming to please

Posted on 29 August 2016 by VRS  |  Email |Print

The need for western funds in order to complete big energy projects is forcing Baku to tackle corruption. Despite holding more than $30bn of savings in its sovereign wealth fund, it briefly explored the possibility of borrowing from the IMF.
An official in Baku says demand for dollars in the banking sector is five to six times higher than supply through regular sales from the sovereign wealth fund………………………………………..Full Article: Source

Qatar’s Empire State Building investment is rare move for foreign fund

Posted on 26 August 2016 by VRS  |  Email |Print

The Qatar Investment Authority’s acquisition of a 9.9-percent stake in Empire State Realty Trust, announced Wednesday, is an unusual move for a sovereign wealth fund. But it offers several advantages, analysts say. “It is relatively rare to see [sovereign wealth funds] buy a stock position,” said John Guinee, an analyst at Stifel. Far more often, they buy direct stakes in buildings.
When Norway’s sovereign wealth fund Norges Bank Investment Management invested with publicly traded Boston Properties last year, for example, it didn’t buy its stocks. Instead, it bought a 45-percent joint venture interest in the Citigroup Center at 601 Lexington Avenue for $725 million. In 2013, it had bought a 45-percent stake in Boston Properties’ 7 Times Square for $684 million………………………………………..Full Article: Source

Africa’s friends reviewed - A case study of sovereign wealth funds

Posted on 25 August 2016 by VRS  |  Email |Print

Over the years, Africa has had many friends or those who claim to be friends, but who among these is betting her funds on the continent? It’s one thing to hand out grants and another to bet citizens’ funds in a cause or economy you believe in. Going by sovereign wealth funds, Norway is betting a lot on the African continent.
So, what is a sovereign wealth fund? In layman’s terms, a sovereign wealth fund is an investment pool of foreign reserves owned and managed directly or indirectly by a government………………………………………..Full Article: Source

Libya wealth fund claimant denounces UN-backed govt’s plan

Posted on 24 August 2016 by VRS  |  Email |Print

A claimant to the chairmanship of Libya’s $67 billion sovereign fund on Monday denounced the appointment by the country’s United Nations-backed government of a panel to run the fund, saying he had not been formally asked to step down.
Last week, the Government of National Accord (GNA) appointed a five-member caretaker committee to run the Libyan Investment Authority (LIA). The announcement was welcomed by Western governments, but it did not list AbdulMagid Breish amongst the panel members. The GNA was designed to resolve a conflict that flared up in 2014, when an armed alliance took control of institutions in Tripoli and the newly elected parliament relocated to the east………………………………………..Full Article: Source

Multiple reshuffles stir up Libyan sovereign wealth fund

Posted on 22 August 2016 by VRS  |  Email |Print

The Libyan Investment Authority is undergoing drastic changes, as key members resigned last week followed by Libya’s unity government appointing a new management team for the country’s main sovereign wealth fund Monday. The Presidency Council of the Tripoli-based Government of National Accord on Monday appointed a steering committee to temporarily assume the leadership of the LIA, Libya’s largest state fund worth approximately $67 billion.
The 5-member team will thus supersede two rival LIA chairmen, who have been vying for control of the LIA over the past two years. Hassan Bouhadi – the claimant supported by Libya’s Parliament and Interim Government in the east – resigned last Thursday, three days before the GNA order, arguing that he was unable to fulfil his mission given the current circumstances in the country………………………………………..Full Article: Source

Norway’s oil fund fends off Brexit to post positive return

Posted on 19 August 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund, the world’s biggest, posted a positive return on Wednesday for the second quarter, despite market pressure from Britain’s decision to leave the EU.
The fund registered a return of 1.3 percent, or 94 billion kroner ($11.5 billion, €10 billion), putting its value at 7.18 trillion kroner ($876 billion, €777 billion) at the end of the quarter, the central bank said on Wednesday. Real estate, which represented 3.1 percent of the portfolio, dragged the fund down, posting a negative return of 1.4 percent………………………………………..Full Article: Source

Western governments welcome panel to run Libyan wealth fund-Germany

Posted on 19 August 2016 by VRS  |  Email |Print

The governments of France, Germany, Italy, Spain, Britain and the United States welcomed the appointment in Libya of an interim panel to run the country’s sovereign wealth fund, Germany’s foreign ministry said on Thursday.
“The governments (of those countries) call on all Libyans to support the Libyan Government of National Accord (GNA) in preserving and protecting the independence and integrity of the Libyan Financial Institutions for the benefit of all Libyans,” the ministry said in a statement. Libya’s U.N.-backed government said on Monday it was appointing a five-member caretaker committee to run the $67 billion sovereign wealth fund………………………………………..Full Article: Source

Norway’s sovereign fund cuts value of UK property portfolio after Brexit

Posted on 18 August 2016 by VRS  |  Email |Print

World’s largest sovereign fund reduces portfolio value by 5% saying there are question marks as to what EU vote means. Norway’s $893bn (£687bn) sovereign wealth fund has cut the value of its UK property portfolio by 5% after Britain’s vote to leave the EU.
The world’s largest sovereign fund is one of Britain’s biggest foreign investors, owning shares in most top UK companies and $11bn in government bonds. It co-owns Regent Street, one of London’s premier shopping streets………………………………………..Full Article: Source

How Brexit hit a non-EU member

Posted on 18 August 2016 by VRS  |  Email |Print

Norway’s giant sovereign wealth fund has adjusted the value of its UK property holdings down 5%, blaming Brexit uncertainty.The wealth fund, the Government Pension Fund Gobal, run by Norges Bank Investment Management, has only a fraction of its £654 billion investments in property — 59.6% is in equities, 37.4% in fixed income and just 3.1% in real estate.
The fund returned 1.3% overall in the second quarter of 2016, it was reported today. But the fund’s second quarter report said it had chosen to revalue its UK property, and blamed Brexit for a loss on its UK equities holdings………………………………………..Full Article: Source

Silk Road revival drives Chinese investment push

Posted on 09 August 2016 by VRS  |  Email |Print

Beijing’s ambition of reviving trade along the ancient Silk Road is rapidly opening up new markets to Chinese investors looking for opportunities away from their slowing domestic economy.
In Kazakhstan, where Chinese companies control about a quarter of the country’s oil production, China Investment Corporation, a sovereign wealth fund, led a group of minority investors in KMG EP, the exploration arm of state oil company KazMunaiGas, to boycott a proposed buyout that would have resulted in large capital losses for the Chinese fund………………………………………..Full Article: Source

Of $40 oil and forced SWF selling

Posted on 09 August 2016 by VRS  |  Email |Print

You know who doesn’t like a falling oil price? Sovereign wealth funds for countries dependent on high oil prices and in love with their (endangered) petrodollars. And a risk based on that dislike is a presumption of forced selling and equity market weakness becoming self-fulfilling as/ if oil prices slide. Stable oil prices means SWFs don’t have to suddenly liquidate but the opposite would also seem to be true…
A $40 average oil price, and assuming that these reserve managers and SWFs sell in accordance to their average allocation, would imply selling of $118bn of government bonds and $45bn of public equities………………………………………..Full Article: Source

Will the Oil Retreat Shift Sovereign Fund Allocation?

Posted on 03 August 2016 by VRS  |  Email |Print

For the first time since April 2016, the price of oil dipped below US$ 40 per barrel – causing headache among some oil-based sovereign funds. Tumbling down from a June 2016 high of US$ 51.23 per barrel, oil prices then reversed course. The price of oil is an essential ingredient that impacts commodity-based economies, translating into pleasure or pain for a country’s citizens.
For example, Russia’s Reserve Fund was marked down to US$ 38.18 billion at the end of July 2016, versus having US$ 38.22 billion in assets in the beginning. Oil industry analysts predict the crude price drops can be explained by an overall decrease in global trade, mixed in with the buildup of excessive storage of crude oil and gasoline………………………………………..Full Article: Source

Avoiding the Pitfalls: Invest in Skills for Deal Evaluation

Posted on 03 August 2016 by VRS  |  Email |Print

Venture and private equity investment are important components of the portfolios of sovereign wealth funds (SWFs). However, access to these asset classes has come with hefty management fees. For SWFs, there are several advantages to direct investment in venture and private equity deals.
Direct investment allows more control over the timing of actual investments. It also allows the SWFs to have more flexibility in their portfolio construction. And most importantly, there are significant savings on management and performance fees. SWF managers need to be adept at analyzing whether their returns will beat the realized return (after fees) offered by venture capital and private equity firms. Unfortunately, ample evidence has shown that this can be very challenging for many SWFs making direct investments………………………………………..Full Article: Source

SWF safety net disappears amid commodities rout

Posted on 02 August 2016 by VRS  |  Email |Print

According to a report from Bocconi University in Milan, the flow of funds from Sovereign wealth funds (SWFs) that formed a safety net during the last financial crisis of 2008/09 in the form of direct investment has disappeared. SWFs are investing less money now, compared to last five years. In 2015, the SWFs invested only $48 billion directly which is 57 percent lower compared to 2008, when they invested $112 billion.
World’s largest SWFs belong to countries producing natural resources, mainly oil. Norway, which is major oil exporter has world’s largest SWFs, followed by Saudi Arabia and Qatar………………………………………..Full Article: Source

Small emirate in UAE accuses businessman of embezzling $1.5B

Posted on 02 August 2016 by VRS  |  Email |Print

A small sheikhdom in the United Arab Emirates on Monday accused a businessman who once had ties to its ruler of stealing $1.5 billion while serving as the head of its local sovereign wealth fund.
The allegations against Khater Massaad, who also helped Ras al-Khaimah create a major, eponymous ceramics company, came in an unusually strongly worded dispatch carried by the UAE’s state-run WAM news agency………………………………………..Full Article: Source

Singapore wealth fund warns of tough investment decade

Posted on 01 August 2016 by VRS  |  Email |Print

Singapore multibillion-U.S.-dollar sovereign wealth fund GIC on Thursday reported a substantial dip in returns and warned of “difficult” global investment conditions over the next decade. GIC said in a statement its annualized rate of return, excluding global inflation, for the past 20 years fell to 4.0 percent in the year to March 2016, from 4.9 percent in 2015, adding future returns will be challenged by uncertainties caused by the low-yield environment.
“These difficult investment conditions can stretch for the next 10 years,” said Lim Chow Kiat, deputy group president and chief investment officer………………………………………..Full Article: Source

Alaska’s $53 Billion Permanent Pool to Exit Funds of Hedge Funds

Posted on 29 July 2016 by VRS  |  Email |Print

Alaska’s $53 billion wealth fund plans to exit all of its funds of hedge funds and will instead make investment decisions in-house. Alaska Permanent Fund Corp. plans to pull all of the $2 billion it has invested in liquid assets across Crestline Investors, Mariner Investment Group and Lazard Asset Management, according to Marcus Frampton, its director of private markets.
Alaska will instead rely on its own five-person alternatives team to select hedge funds. “We’ve decided to move to a 100 percent direct program,” Frampton said……………………………………….Full Article: Source

Singaporean wealth fund warns of hard investment decade

Posted on 29 July 2016 by VRS  |  Email |Print

Singapore’s multibillion-dollar sovereign wealth fund GIC yesterday reported a substantial dip in returns and warned of “difficult” global investment conditions over the next decade. The fund said in a statement its annualized rate of return, excluding global inflation, for the past 20 years fell to 4 percent in the year to March, from 4.9 percent last year, adding that future returns would be challenged by uncertainties caused by a low-yield environment.
“These difficult investment conditions can stretch for the next 10 years,” deputy group president and chief investment officer Lim Chow Kiat said………………………………………..Full Article: Source

1MDB: The inside story of the world’s biggest financial scandal

Posted on 29 July 2016 by VRS  |  Email |Print

On 22 June 2015, Xavier Justo, a 48-year-old retired Swiss banker, walked towards the front door of his brand new boutique hotel on Koh Samui, a tropical Thai island. He had spent the past three years building the luxurious white-stone complex of chalets and apartments overlooking the shimmering sea and was almost ready to open for business. All he needed was a licence.
Justo had arrived in Thailand four years earlier, having fled the drab world of finance in London. In 2011, he and his girlfriend Laura toured the country on a motorbike and, two years later, they got married on a secluded beach………………………………………..Full Article: Source

GIC ‘more defensive’ in investing stance

Posted on 28 July 2016 by VRS  |  Email |Print

Sovereign wealth fund GIC said it had been more defensive in its investing stance in the past year, owing to more challenging investment conditions. The fund’s approach was reflected in its move to increase its holdings of bonds and cash, at the expense of developed market equities, which are seen as more risky.
“It reflects our caution on the overall environment. All those reasons we talked about: low growth, high debt and expectation of high volatility,” said GIC deputy group president and group chief investment officer Lim Chow Kiat………………………………………..Full Article: Source

Future Fund and Cbus see big opportunities in direct lending

Posted on 28 July 2016 by VRS  |  Email |Print

The potential for super funds to be direct lenders is enormous, according to a panel that included the Future Fund, Cbus and AustralianSuper that are all lending directly. Rob Leck, manager debt and quantitative solutions at Cbus, which is about to enter the private debt market, said that not only do investors have to be lenders, but they have the potential to assist in the development of a high yield market in Australia.
The Future Fund has been involved in the direct lending landscape since 2009, and first made an investment in 2010 in the European corporate middle market. It is viewed as a credit allocation and makes up around 30 per cent of the credit portfolio………………………………………..Full Article: Source

Saudi royal oil group at heart of 1MDB case

Posted on 28 July 2016 by VRS  |  Email |Print

US justice department claims $1bn of Malaysian funds for PetroSaudi venture was siphoned off. It is the tale of a little-known but well-connected oil company that was co-founded by a Saudi prince and claims to be a “partner of choice” for multinationals.
But US authorities have now left PetroSaudi International grappling with questions over its dealings with the scandal-racked 1MDB, the Malaysian state wealth fund. US investigators last week threw their weight behind longstanding claims that $1bn of Malaysian public money meant for 1MDB’s joint venture with PetroSaudi was instead siphoned off to a Malaysian businessman, who splurged millions on art, partying and a Hollywood film………………………………………..Full Article: Source

Singapore to further boost money laundering controls amid 1MDB-linked probe

Posted on 26 July 2016 by VRS  |  Email |Print

Singapore’s central bank said it will enhance controls against money laundering and take swift action against banks following damaging findings that financial institutions in the city-state handled money flows linked to Malaysian state fund 1MDB.
“There is no doubt that the recent findings have made a dent in our reputation as a clean and trusted financial centre,” Ravi Menon, managing director of the Monetary Authority of Singapore, said at its annual news conference on Monday. “MAS is determined to fix the problem, working together with the industry.”……………………………………….Full Article: Source

Fund return hit by commodities, strong dollar

Posted on 25 July 2016 by VRS  |  Email |Print

China Investment Corporation announced on Friday that its overseas investments generated a net return of negative 2.96 percent in dollar terms in 2015, falling from a positive 5.47 percent return for 2014, due to volatilities in international financial markets and foreign exchange losses triggered by an appreciating dollar.
The $814 billion Chinese sovereign wealth fund posted a net cumulative annualized return of 4.58 percent since its establishment in September 2007, compared with 5.66 percent in 2014………………………………………..Full Article: Source

1MDB’s German Connection

Posted on 25 July 2016 by VRS  |  Email |Print

Two German banks are named by the U.S. Justice Department in connection to Malaysian sovereign wealth fund 1MDB, and Volkswagen halts sales of most of its models in South Korea as it is investigated for falsifying emissions and noise data.
In the fallout to Asia’s version of the Panama Papers scandal, the U.S. Justice Department named two German banks in its investigation into money laundering from Malaysian sovereign wealth fund 1 MDB. Deutsche Bank allegedly transferred $700 million, and investigators found $55 million in fund money sitting in BHF, a Frankfurt bank. Neither bank is accused of wrongdoing, but any connection to Malaysian officials who used a public trust as private bank accounts is one too many………………………………………..Full Article: Source

White House calls for Malaysian transparency in wake of fund scandal

Posted on 22 July 2016 by VRS  |  Email |Print

The White House urged Malaysia on Thursday to demonstrate good governance and a transparent business climate, a day after U.S. prosecutors sued to try and seize $1 billion in assets they said were bought with money stolen from a state development fund.
The civil lawsuits present a potentially thorny issue for the two countries that have grown closer during the administration of President Barack Obama, who has visited the southeast Asian nation twice in the last two years. The lawsuits will likely affect relations, but they did not come as a surprise, said a U.S. congressional aide. “It has been a concern of a lot of people for a long time. Corruption in Malaysia is a huge problem,” the aide said………………………………………..Full Article: Source

Abu Dhabi wealth fund goes in house

Posted on 21 July 2016 by VRS  |  Email |Print

Abu Dhabi’s main sovereign wealth fund has brought more of its portfolio buying activity in house as it seeks greater value amid slower growth across increasingly volatile global markets.
Abu Dhabi Investment Authority has its portfolio managed by external firms overseen by the sovereign wealth fund’s staff to 60 per cent from 65 per cent in 2014. The amount of its assets tracking indexes has fallen from 55 per cent in 2014 to 50 per cent this year……………………………………….Full Article: Source

Adia renews faith in China and India’s growth prospects amid market tumult

Posted on 21 July 2016 by VRS  |  Email |Print

The Abu Dhabi Investment Authority (Adia) remains focused on China’s and India’s long-term growth prospects, even after emerging markets were hit last year by a slowing global economy. The emirate’s main sovereign wealth fund said in its annual review, released on Wednesday, that long-term returns declined last year amid volatility in markets, although it said the lower rates were mainly caused by statistical averaging over the long periods it uses to measure returns.
The fund’s managing director, Sheikh Hamed bin Zayed, pointed to the continued long-term growth prospects of China and India, despite economic headwinds and the need for huge structural reforms undertaken by the former in the past couple of years………………………………………..Full Article: Source

Investors Go Bargain-Hunting for U.K. Property After Brexit Vote

Posted on 20 July 2016 by VRS  |  Email |Print

Global investors are on the hunt for U.K. property bargains, expecting that Brexit-fueled economic turmoil could weaken real-estate values. The drop in the value of sterling has only increased the appeal.
Norway’s sovereign wealth fund announced it bought a retail and office property on Oxford Street, one of London’s main shopping destinations from Aberdeen Asset Management for £124 million ($164.3 million). Aberdeen, which resumed trading in its U.K. property fund last week, declined to comment………………………………………..Full Article: Source

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