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1MDB striving for strategic development

Posted on 23 October 2014 by VRS  |  Email |Print

1MDB is a company that can’t seem to keep itself out of the news. Everyone, from politicians and business figures to the man on the street, seems to have a view on it and the impending initial public offering (IPO) of its energy business is only likely to increase the scrutiny the company faces. For a company that so often makes the headlines, few seem to understand what exactly it does.
This has led to question marks being raised, by figures like Tun Dr Mahathir Mohamad no less, as to the rationale for 1MDB’s existence. To truly understand 1MDB, one first has to understand the nature of its business model. It is often described, incorrectly it must be said, as a “sovereign wealth fund” or “another Khazanah”, but the fact of the matter is that 1MDB is neither, nor does it claim to be………………………………………..Full Article: Source

Sovereign wealth funds: Stash or spend?

Posted on 22 October 2014 by VRS  |  Email |Print

Resource-rich regions have various ways of sharing the wealth. Some are more jovial than others. On October 2, every person living in Alaska was given $1,884. Although the amount was, as Time magazine noted, enough to buy a trip someplace warmer, the state’s cash-for-residency deal is just as likely to sell one-way tickets going north.
The money is the annual payout from the state’s Permanent Fund, a $50 billion piggy bank that distributes investment revenue earned on the state’s oil and gas income. Paid out every year since 1982 to individuals who have lived in the state for a full calendar year as a way to lure people to live in the state, this year’s amount was nearly double the $900 residents received last year, and the third highest nominal amount ever………………………………………..Full Article: Source

SWFs and pensions diversify into new markets and asset classes

Posted on 21 October 2014 by VRS  |  Email |Print

In Asia Pacific, sovereign wealth funds (SWFs) and pension funds have been diversifying their investments into new markets and asset classes. Alternatives are now playing a larger role in their investment portfolios. According to Dan McNicholas, head of alternative investment sector solutions, Asia Pacific, at State Street, these are more complex investment strategies.
“We have been providing our clients with solutions to address new regulatory constraints, better manage risk and monitor underlying manager performance and liquidity. Investments into these asset classes are typically made through fund-of-funds, managed accounts or through in-house investment teams. Our suite of services for the limited partner sector across hedge, private equity and real estate continues to evolve and become more specialised to meet the increasing needs of our clients.”……………………………………….Full Article: Source

Watch Out Banks: BAML Steps Up Game on Sovereign Wealth Funds

Posted on 20 October 2014 by VRS  |  Email |Print

Bank of America Merrill Lynch (BAML) is seeking to expand ties into the Middle East and Asia, while some European banks struggle to get their houses in order. The bank was recently the global coordinator for Jimmy Choo’s initial public offering in which an Asian sovereign wealth fund became the second largest shareholder in the shoe company.
Sovereign wealth funds permeate throughout the investment banking world, as sovereign wealth funds are engaging more in direct transactions. According to the Sovereign Wealth Fund Transaction Database , over US$ 186 billion was spent in direct transactions by sovereign wealth funds in 2013………………………………………..Full Article: Source

BlackRock’s Fink says sovereign wealth funds are staying in equities -CNBC

Posted on 16 October 2014 by VRS  |  Email |Print

U.S. asset manager BlackRock Inc has not seen more than one sovereign wealth fund sell out of equities in last six weeks despite the global market volatility, Chief Executive Officer Larry Fink told CNBC Wednesday morning.
Overall, Fink said he would like to see the U.S. Federal Reserve take action and raise interest rates to between 1 percent and 1.25 percent, which he believes would be good for the U.S. economy. The New York-based company reported a 10 percent increase in assets under management and a 26 percent increase in earnings from the third quarter of last year………………………………………..Full Article: Source

Revealed: Why investment bankers heading to UAE

Posted on 13 October 2014 by VRS  |  Email |Print

Many investment bankers are heading to the UAE and the GCC because of an increase in the number of opportunities for these professionals in the region. According to Sovereign Wealth Fund Institute, an increasing number of sovereign wealth funds and other large public institutional investors have boosted their activity in direct investments, participating in acquisitions globally.
And, a big portion of those deals and capital raises are occurring in the GCC, attracting a number of investment bankers and they are seeing opportunities in the Middle East M&A market. The figures released by SWF Institute show an increase in the transactions taking place. In 2013, the institute’s database shows that GCC-based sovereign wealth funds made $20.2 billion in direct transactions, an increase from $18.32bn in 2012………………………………………..Full Article: Source

Indonesia: Sovereign wealth funds as growth stabilizer

Posted on 13 October 2014 by VRS  |  Email |Print

It’s been three years since, for the first time, Indonesia began running current-account deficits, forcing Bank Indonesia (BI) to maintain tight monetary policies despite the inflation rate falling within the desired range and economic growth falling steadily below expectations.
Without stronger commodity prices, the only way to improve the external balance is to curb domestic spending. However, only a few people realize that Indonesia’s twin deficits originated with the government’s unwise decision to pursue higher GDP growth through the massive influx of export revenues and the belief that foreign capital would trickle down into the rest of the economy………………………………………..Full Article: Source

Interest in North Dakota State Funds continues to grow

Posted on 13 October 2014 by VRS  |  Email |Print

The recent news that every resident of Alaska will receive $1,884 this year from the Alaska Permanent Fund has brought discussion about whether North Dakotans could receive similar annual payments. The Alaska Permanent Fund was established in 1976 to take 25 percent of all state oil and gas royalties. Its principal may not be spent, and the Alaska legislature decides how to spend the earnings.
This has included a dividend distribution to all state residents, with the first check for $1,000 issued in 1982. The annual payments to Alaskans have ranged from $330 to $2,069, and the fund is currently valued at more than $51 billion.Other states and countries have similar funds, including the Permanent Wyoming Mineral Trust Fund. It has assets of more than $6 billion, and earnings go into Wyoming’s general fund to offset the elimination of the state’s income tax. Norway has a pension fund from North Sea oil revenue that now totals more than $840 billion. And, earnings from Persian Gulf oil funds have financed significant development in several Middle East countries………………………………………..Full Article: Source

Cautious mood pervades the sovereign wealth fund industry

Posted on 09 October 2014 by VRS  |  Email |Print

If a novelist were looking for examples of highly secretive, powerful institutions to provide a backdrop to their next blockbuster, they might well consider some Middle Eastern sovereign wealth funds.
While the leading funds – for example, the Abu Dhabi Investment Authority, the Kuwait Investment Authority, Abu Dhabi’s Mubadala Development Company, the Qatar Investment Authority and the Investment Corporation of Dubai – all have websites apparently offering a window to their soul, the information provided is often minimal………………………………………..Full Article: Source

Norway’s wealth fund sees property portfolio focused on global cities

Posted on 03 October 2014 by VRS  |  Email |Print

Norway’s $855 billion sovereign wealth fund, the world’s largest, will focus its future real estate acquisitions on booming global cities, its deputy chief said on Thursday. The fund, which owns on average 1.3 percent of all listed companies worldwide, invests 1.2 percent of its holdings in real estate but aims to increase that stake to 5 percent over time.
Some of its properties are located on London’s Regent Street and Savile Row, the Champs-Elysees in Paris and in New York. “We look for cities that are expected to see rising housing prices, that attract talent and people who are willing to pay to live in these cities,” Trond Grande, the fund’s deputy chief, told a business seminar………………………………………..Full Article: Source

Samruk Kazyna Privatisation Drive Offers New Investment Opportunities

Posted on 02 October 2014 by VRS  |  Email |Print

Kazakhstan’s Samruk Kazyna Sovereign Wealth Fund is moving forward with its plans to sell a sizable part of the enterprises it controls to the private sector. Both Kazakhstan-based and foreign investors will be able to buy shares in 106 companies the state-owned fund manages under the so-called second wave of privatisation. The estimated value of assets to be offered up for sale is $9 billion.
The first wave of privatisation took place in the 1990s when Kazakhstan moved to create a market economy out of the old Soviet, centrally controlled and planned economy. The challenge of the current wave of privatisation is defined as strengthening the foundations of the market economy. The key idea of this campaign is to give impetus to the further development of private business in the country………………………………………..Full Article: Source

Suffering Wealth and Sovereign Wealth

Posted on 29 September 2014 by VRS  |  Email |Print

The Excess Crude Account (ECA), which was set up by former President Olusegun Obasanjo under the inspiration of Dr. Ngozi Okonjo-Iweala in 2004, was the saving grace. Nigeria would have lapsed into a catastrophic economic downturn. Yet, when Obasanjo set up ECA, governors kicked against it, describing it as unconstitutional. All money must be shared, they said.
If Obasanjo had caved in, there would have been nothing to fall back on in 2009 when the crunch set in. We still make use of it till today. So much for constitionalism. ECA is, of course, not the same thing as SWF. ECA simply saves the difference between the budgeted and the actual prices of crude oil. It is a stabilisation fund, summoned when it is needed, especially by the governors who continue to wave the constitution in our face anything they crave raw cash. SWF, on the other hand, is primarily an investment………………………………………..Full Article: Source

Are sovereign wealth funds changing strategy? (Video)

Posted on 26 September 2014 by VRS  |  Email |Print

Alasdair Warren, head of financial sponsors group for EMEA at Goldman Sachs, says that sovereign wealth funds are changing their investment strategies, after GIC acquired 50 percent of RAC.……………………………………….Full Article: Source

Norwegian oil fund plans gradual shift to reference portfolio

Posted on 25 September 2014 by VRS  |  Email |Print

Norway’s Government Pension Fund Global (GPFG) is to replace its current strategic index with a new benchmark meant to offer greater flexibility. The new approach, which Yngve Slyngstad, chief executive of Norges Bank Investment Management (NBIM), said stemmed from a recent review of the fund’s approach to active management, would also encourage “gradual” growth of private investments while allowing for a consistent benchmark approach across all holdings.
Speaking at a seminar at the Norwegian Ministry of Finance, Slyngstad said the review by Andrew Ang of Columbia Business School, Michael Brandt of Duke University and the former president and chief executive of the Canada Pension Plan Investment Board (CPPIB), David Denison, had shown how the GPFG could exploit investment opportunities currently outside the index………………………………………..Full Article: Source

NMSIC Onboard: Sovereign Wealth Funds Adopting Smart Beta

Posted on 25 September 2014 by VRS  |  Email |Print

The New Mexico State Investment Council (NMSIC) has embarked on a search for one or more smart beta managers to manage US$ 1 billion. The search is for two different types of smart beta managers: smart beta managers focusing on low volatility, and smart beta managers focusing on fundamental value strategies.
The smart beta allocation is being funded by the replacement of PanAgora Asset Management. PanAgora managed a US$ 572 million domestic large-cap enhanced index portfolio for NMSIC. NMSIC’s investment consultant RVK is helping in the search………………………………………..Full Article: Source

Norway Jumps to No. 2 Foreign Buyer of U.S. Real Estate

Posted on 24 September 2014 by VRS  |  Email |Print

Norway has vaulted to the top ranks of foreign U.S. commercial real estate buyers as its $870 billion sovereign-wealth fund, the world’s largest, acquires buildings from New York to San Francisco.
The country has spent more than $3.2 billion on U.S. real estate this year, including the assumption of debt, according to research firm Real Capital Analytics Inc. and statements from the wealth fund. That makes it the biggest international buyer after Canada. The total is more than double the amount spent in all of 2013, when Norway ranked No. 6 for property purchases………………………………………..Full Article: Source

World’s Biggest Wealth Fund to Shift Away From Standard Indexing

Posted on 23 September 2014 by VRS  |  Email |Print

Norway’s $880 billion sovereign wealth fund, the world’s largest, said traditional global indexes are no longer an appropriate model on which to base its investments. “A new framework for the management of the fund may facilitate a development where we as the management take greater responsibility by defining a tailor-made reference portfolio,” Yngve Slyngstad, the fund’s chief executive officer, said.
The global indexes the investor currently follows don’t “represent the best starting point,” he said. The fund, which gets its capital from Norway’s oil and gas wealth, is seeking to boost returns and expand into new asset classes. After getting its first capital infusion 18 years ago, the investor has steadily added risk, expanding into stocks in 1998, emerging markets in 2000 and real estate in 2011 to safeguard the wealth of western Europe’s largest oil exporter………………………………………..Full Article: Source

Temasek takes on sustainability challenge

Posted on 23 September 2014 by VRS  |  Email |Print

A long-term investor with a strong public service sensibility and a massive portfolio must inevitably confront the issue of sustainability. For Singapore government-owned investment company Temasek Holdings, that time has begun in earnest, chairman Lim Boon Heng hinted on Monday at a dinner to mark Temasek’s 40th anniversary.
“This spirit of doing things today, with tomorrow very clearly in our minds also describes the ethos of Temasek,” Mr Lim said. “It forms our values and culture as a long-term investor, as a forward-looking institution and most of all, as a trusted steward.” Singapore President Tony Tan Keng Yam recalled that Temasek was created as a way to keep government from overly influencing its commercial interests………………………………………..Full Article: Source

Sustainability forms Temasek’s core, says chairman Lim Boon Heng

Posted on 23 September 2014 by VRS  |  Email |Print

Long-term sustainability remains the core concern for Temasek Holdings after four decades of existence, its chairman Lim Boon Heng said Monday. Speaking at a dinner at the Istana to mark the Singapore government investment company’s 40th anniversary, he said: “This spirit of doing things today with tomorrow very clearly in our minds also describes the ethos of Temasek.”
He especially noted Temasek’s recent focus on environmental sustainability; it had on Sept 19 organised an “Ecosperity” conference with Goldman Sachs and the National University of Singapore to explore the issue of sustainable growth………………………………………..Full Article: Source

The World’s Largest Sovereign Wealth Funds Go Private

Posted on 23 September 2014 by VRS  |  Email |Print

Khazanah’s private-equity-style deal with Malaysia Airlines is just the latest in a series of private investments by sovereign wealth funds. Billion-dollar real estate and infrastructure investments made by the rainy-day funds accounted for some of the largest and most valuable deals of 2013, as sovereign funds reached beyond their own borders to snap up private assets. As a result, the world’s most iconic skylines, from New York to London and Paris, are increasingly dotted with buildings and bridges owned by foreign countries.

More and more, sovereign wealth funds are using private markets to diversify their portfolios and achieve higher returns by taking on greater risk. Sovereign funds have doubled their allocations to private markets over the past six years,at the same time that other long-term investors - in particular, public pensions- have dialed back risk to meet outstanding liabilities………………………………………..Full Article: Source

Sovereign Wealth Funds - Friend Or Foe?

Posted on 22 September 2014 by VRS  |  Email |Print

A sovereign wealth fund (SWF) is an investment fund managed by a government agency on behalf of a nation or sovereign state. SWFs (or “sovereign funds”) generally have a mandate to invest globally in any asset class – stocks, bonds, commodities, currencies, real estate, etc.
SWFs have grown substantially in size, with total assets as of September 2013 amounting to $5.857 trillion, an increase of almost 80% from $3.265 trillion in September 2007. This enormous pool of capital gives SWFs a great deal of clout in financial markets. Since the majority of SWFs are located in the Middle East and Asia, whether these largely opaque entities are friends or foes of the nations where they invest has been the subject of hot debates from time to time……………………………………….Full Article: Source

Sovereign wealth funds cheer FPI framework; double assets in 10 months

Posted on 19 September 2014 by VRS  |  Email |Print

Recent regulatory changes introduced by the Securities and Exchange Board of India (Sebi) with regards to foreign investors seem to have gone down well with sovereign wealth funds (SWFs), who have more than doubled their equity assets in the last 10-12 months.
Just a couple of months after Sebi issued the draft regulations for foreign portfolio investor (FPI) regime, SWFs’ assets under custody (AUC) surged to their highest ever at $18.07 billion in December, 2013. Since then, SWFs have further raised their equity holdings, with AUCs surging past $24 billion — 150% higher than the levels seen just before the draft in September 2013……………………………………..Full Article: Source

China’s global mining play is failing to pan out

Posted on 16 September 2014 by VRS  |  Email |Print

China’s National Audit Office in June blamed mismanagement for losses on at least 10 foreign investments by China Investment Corp., the US$600 billion sovereign-wealth fund that bought tens of billions of dollars in resource-related holdings between 2009 and 2012. The office didn’t specify which deals.
CIC has begun shifting away from energy investments and into other sectors, according to people familiar with the fund. Energy and metals deals fell to two-thirds of China’s offshore investments in 2013, from 80 per cent in 2005, according to the American Enterprise Institute and Heritage Foundation data, and China’s US$53.3 billion in resource investments last year was below the record US$57.5 billion in 2011………………………………………..Full Article: Source

3 Trends Forcing Sovereign Funds to Rethink Tactical Asset Allocation

Posted on 16 September 2014 by VRS  |  Email |Print

Paris-based Organization for Economic Cooperation and Development (OECD) chopped its economic growth forecast for the United States and other large developed countries. The OECD painted a picture of the Eurozone facing very low inflation rates, pushing back demand and heightening unemployment.
There is amplified divergence occurring in economic markets. Some countries are economically thriving and financially stabilizing, while others are on shaky ground. This is affecting where public funds want to allocate capital to……………………………………….Full Article: Source

1MDB pioneering a new sovereign investment model

Posted on 15 September 2014 by VRS  |  Email |Print

Recent reports of state investment body 1Malaysia Development Bhd (1MDB) suggest the business model being pioneered by this outfit could mark a new direction that may be adopted by similar sovereign bodies worldwide.
The biggest shift is the focus on value creation underpinned by commercial gain, somewhat similar to the operations of a special purpose acquisition company (SPAC) like Hibiscus Petroleum Bhd. Such a model envisions raising funds and then looking for potentially lucrative investments targets which can later be floated on the stock market for handsome gains, as noted by a recent report from Bank of America Merrill Lynch………………………………………..Full Article: Source

Africa sovereign funds tread tricky path on investments

Posted on 12 September 2014 by VRS  |  Email |Print

As the oil producers of sub-Saharan Africa rush to create sovereign wealth funds, competing pressures to boost living standards now while saving for the future can throw up as many problems as they solve.
Jose Filomeno dos Santos, chairman of Angola’s fledgling $5 billion fund, noted that while his country has one of Africa’s highest economic growth rates, it still has one of the continent’s highest child mortality rates. “(Angola) still lacks doctors, it still lacks hospitals,” he told sovereign wealth fund conference at London’s Chatham House last week………………………………………..Full Article: Source

‘Blurred lines’ on Angolan wealth fund

Posted on 12 September 2014 by VRS  |  Email |Print

The launch of Angola’s $5-billion sovereign wealth fund was hailed as a major step in the country’s post-war economic development and asset managers from around the world licked their lips in anticipation of an opportunity to work with Africa’s second-biggest oil producer.
Nearly two years on from its high-profile beginning in October 2012, the Fundo Soberano de Angola (FSDEA) is still regarded in investor circles as a tantalising opportunity, but it is dogged by a number of unanswered questions. First, there is the discomfort around the fund being chaired by José Filomeno dos Santos, the eldest son of Angola’s president José Eduardo, who since 1979 has led one of Africa’s most corrupt countries where vast oil revenues have done little to address grinding poverty………………………………………..Full Article: Source

Sovereign wealth’s new investment tactics

Posted on 11 September 2014 by VRS  |  Email |Print

Since mid-year statistics revealed that sovereign wealth funds (SWFs) are making direct investments at a rate never seen before , attention has turned to their new profile in the M&A landscape.An increasing number of state-owned funds are shunning their reputation as long-term, passive investors by acquiring private companies direct and even investing in exchange-traded funds.
While their push into higher-yielding assets has sparked some concern, their growing sophistication and preparedness to look at alternative strategies is here to stay………………………………………..Full Article: Source

The Nigeria Sovereign Investment Authority furthers country’s growth

Posted on 09 September 2014 by VRS  |  Email |Print

The Nigeria Sovereign Investment Authority has accomplished a great deal in a short space of time, securing vital infrastructure investments and prestigious partnerships along the way. When President Goodluck Jonathan launched the Nigeria Sovereign Investment Authority (NSIA) in 2011 he told the world he was ushering in “a new era of financial responsibility”.
Though the NSIA is a relatively new undertaking for the Nigerian authorities, the raging success of its first year in business cannot be downplayed. In the months in which the agency has operated, it has already supported growth and development in Nigeria in terms of sheer volume of money moved and investments made in development programmes………………………………………..Full Article: Source

Temasek keeps foot on the accelerator

Posted on 08 September 2014 by VRS  |  Email |Print

For a city whose growth as an Asian financial centre can be seen in the multiplying glass towers of its burgeoning business district, it comes as a surprise to find that the office of Singapore’s state investment company is tucked away in a shopping mall.
Temasek, which manages S$223bn ($178bn) on behalf of Singapore’s finance ministry, has maintained a low profile since it was founded 40 years ago with a small portfolio that included a shoemaker, detergent company and, improbably, a bird park………………………………………..Full Article: Source

Singapore’s GIC sees tough investment climate in next decade

Posted on 27 August 2014 by VRS  |  Email |Print

Singapore sovereign wealth fund GIC, which manages more than $100 billion of the city-state’s foreign reserves, warned in its annual report of a tough investment outlook over the next decade as global central banks withdraw ultra-easy monetary policies. According to GIC, prices of all major asset classes have been inflated by the massive stimulus measures, and now face weak future returns.
“Global financial markets have been recovering strongly from the 2008/09 global financial crisis, supported by low interest rates and unconventional monetary policies,” GIC indicated in the report. As central banks unwind monetary stimulus measures and interest rates increase, “financial assets will see diminished returns”, it said………………………………………..Full Article: Source

World’s biggest wealth fund takes focus off emerging markets

Posted on 22 August 2014 by VRS  |  Email |Print

Norway’s €663bn sovereign wealth fund, the world’s largest, is slowing its expansion into emerging markets as it scales back a two-year mission to tap into the fastest growing markets. “We are gradually picking up some new markets but at a less rapid pace than we did at the beginning of the year,” Yngve Slyngstad, the fund’s chief executive officer, said in Oslo.
The fund has been accelerating its investment into emerging markets since 2012, when it won permission to realign large parts of its portfolio away from developing markets to help boost returns. At the time, the government approved a plan to reduce holdings in Europe to 41pc from 54pc of the total portfolio………………………………………..Full Article: Source

World’s largest wealth fund slows investment into new markets

Posted on 21 August 2014 by VRS  |  Email |Print

Norway’s US$880 billion (RM2.7 trillion) sovereign wealth fund, the world’s largest, is slowing its expansion into emerging markets as it scales back a two-year mission to tap into the fastest growing markets.“We are gradually picking up some new markets but at a less rapid pace than we did at the beginning of the year,” Yngve Slyngstad, the fund’s chief executive officer, said yesterday in an interview after a press conference in Oslo.
The fund has been pouring into emerging markets since 2012, when it won permission to step up its investment. At the time, the government approved a plan to reduce holdings in Europe to 41 per cent from 54 per cent of the total portfolio………………………………………..Full Article: Source

Arab investors to pump huge funds to Europe

Posted on 19 August 2014 by VRS  |  Email |Print

Arab investors are increasingly looking to the UK and continental Europe’s commercial real estate markets to pump their huge funds. Europe is the preferred target of Arab investors with 80 percent of the expected $180bn Arab investment flowing in to UK and Europe over the next 10 years. In the UK, London is the preferred destination.
According to the Arab news portal, the Middle East Sovereign Wealth Funds (SWFs), which makes up 35 percent of SWFs assets under management are among the world’s largest source of capital………………………………………..Full Article: Source

Norway Fund Told to Forget Riskier Assets Until Oversight Fixed

Posted on 18 August 2014 by VRS  |  Email |Print

Norway’s $880 billion sovereign wealth fund can’t be allowed to chase riskier assets until lawmakers fix the oversight gaps that emerged in connection with its purchase of Formula One shares, according to the biggest party in the nation’s parliament.
“The Formula One case was quite an eye-opening experience for politicians who are dealing with issues regarding this fund,” Marianne Marthinsen, the Labor Party’s finance spokeswoman, said in an interview in Oslo on Friday. “It illustrates that we need a strong system of monitoring.”……………………………………….Full Article: Source

Temasek: Africa’s Emerging Economic Ally

Posted on 18 August 2014 by VRS  |  Email |Print

The current exponential growth being witnessed across African economies has got investors worldwide seeking to take part in the continent’s emergence. As a result, the African economic landscape is dotted with more and more wealth funds and investment companies, one of which is Temasek Holdings, the Singaporean sovereign wealth fund.
Incorporated by the government in 1974, ownership and management of the government’s investments on a commercial basis were transferred to Temasek to allow the government prioritize policy making. Among these investments were the Economic Development Board’s stakes in local and foreign private investment sectors and the companies acquired or established by the government………………………………………..Full Article: Source

Funds Switch View On China: HKMA

Posted on 13 August 2014 by VRS  |  Email |Print

The unusually large flows have kept the HKMA busy as it has been forced to inject more than 75 billion Hong Kong dollars (US$9.7 billion) into the foreign exchange market in a bid to cool down the local currency, which has been hitting the strong side of the band that it’s allowed to trade in.
The currency peg permits the Hong Kong dollar to trade between HK$7.75 and HK$7.85 to the U.S. dollar. The HKMA buys or sells the local unit whenever it touches either side of the band………………………………………..Full Article: Source

Norway oil fund boosts active ownership

Posted on 13 August 2014 by VRS  |  Email |Print

Norway’s huge sovereign wealth fund that’s fueled by oil revenues has taken another step towards what it calls its “active ownership” in publicly traded companies. Its latest step also addresses critics looking for more openness by fund managers.
The Financial Times reported last week that the fund’s decision to reveal in advance how it will vote on key issues at many companies is likely to also boost shareholder activism in Europe. Thomas Sevang, communications director for the fund, told newspaper Aftenposten that revealing how it will vote ahead of a company’s annual meeting is aimed at “increasing transparency around its active ownership.”……………………………………….Full Article: Source

Norwegian Sovereign Wealth Fund Keeps Diversifying Portfolio

Posted on 13 August 2014 by VRS  |  Email |Print

The Norwegian sovereign wealth fund invested in real estate in London, buying a 343 million-pound asset in the Mayfair district. According to Norges Bank Investment Management, the fund bought a 57.8% share in estate between Regent Street and Bond Street from the Church Commissioners for England.
‘The consideration is net of the fund’s £36.1 million share of total existing debt. The Crown Estate purchased a 6.4 percent stake at the same time for £38 million. Contracts were completed on 8 August 2014,’ reads a note released on Sunday………………………………………..Full Article: Source

Sovereign wealth funds embark on global spending spree

Posted on 11 August 2014 by VRS  |  Email |Print

The world’s big government owned investors went on a spending spree in the first half of the year, with the total value of transactions by sovereign wealth funds (SWFs) nearly back at levels recorded in late 2008, just before the global economic crisis hit in earnest.
According to research by the Sovereign Wealth Fund Institute, a US-based think tank, direct deals and transactions by SWFs reached $50.02bn in the first six months of the year, up 23 per cent on the same period in 2013. The record level previously recorded by the SWFI was $51.05bn for the first six months of 2008. The institute points out, however, that the first half 2008 figure included some of the early measures taken by governments to mitigate the effects of the credit crunch through state spending…………………………………Full Article: Source

CIC raises outsourcing, fears for deal-sourcing

Posted on 11 August 2014 by VRS  |  Email |Print

China’s sovereign wealth fund increased its allocation to external managers last year and made a move into developed market equities, but expressed concern over the outlook for deal-sourcing.External firms managed $71.4 billion more of China Investment Corporation’s (CIC) assets at the end of 2013 than at the end of 2012 as it raised its allocations to 67.2%, from 63.8%, over the period.
The news follows reports last week which found that Asian institutional investors will likely increase outsourcing over the next three years following a recent decline in the use of external managers…………………………………Full Article: Source

Foreign investments in GCC slumps by 14.6 in 2013

Posted on 06 August 2014 by VRS  |  Email |Print

The foreign direct investment (FDI) in the Gulf Cooperation Council (GCC) states dropped by 14.6 percent in 2014, said Tuesday a report by the National Bank of Kuwait citing UN data. The NBK report stated that fell for the fifth consecutive year in 2013 to USD 24 billion against USD 28 billion in 2012, down 14.6 percent, according the United Nations Conference on Trade and Development (UNCTAD).
“The country almost tripled its investments on the year before. Through its sovereign wealth fund, the Kuwait Investment Authority (KIA), and the investments of private individuals, Kuwait has consistently topped the regional rankings in FDI outflows,” reads the report………………………………………..Full Article: Source

Singapore GIC’s warning on investment climate in next decade

Posted on 05 August 2014 by VRS  |  Email |Print

Singapore sovereign wealth fund GIC, which manages more than $100 billion of the city-state’s foreign reserves, on Saturday warned of a tough investment outlook over the next decade as global central banks withdraw ultra-easy monetary policies.
GIC said the prices of all major asset classes have been inflated by the massive stimulus measures, and now face weak future returns. “Global financial markets have been recovering strongly from the 2008/09 global financial crisis, supported by low interest rates and unconventional monetary policies,” GIC said in its annual report………………………………………..Full Article: Source

Singapore’s GIC Says Investment Environment Will Be More Challenging

Posted on 04 August 2014 by VRS  |  Email |Print

Singapore’s sovereign-wealth fund warned of a challenging investment environment over the next decade, as global central banks unwind easy-money policies amid a modest growth outlook for many developed economies.
GIC Pte. Ltd. said it sees greater investment opportunities in emerging economies compared with some developed markets, where ultralow interest rates have inflated prices across all asset classes. GIC, which manages Singapore’s foreign-exchange reserves, said it oversees more than $100 billion in assets, though analysts estimate the figure is closer to $300 billion………………………………………..Full Article: Source

GIC More Positive on Emerging Markets on Growth Opportunities

Posted on 04 August 2014 by VRS  |  Email |Print

GIC Pte, manager of more than $100 billion of Singapore’s reserves, said it’s more positive on emerging markets, citing growing middle classes, valuations and the progress of reforms.
Emerging markets “of course have their own challenges, but we find that the valuation is not the hurdle,” Lim Chow Kiat, the sovereign wealth fund’s chief investment officer, said in an interview as GIC released its annual report on Aug. 2 and warned about elevated prices in developed markets. “We are not starting with high-asset prices.”……………………………………….Full Article: Source

Singapore’s GIC bets on emerging market tech investments

Posted on 04 August 2014 by VRS  |  Email |Print

Singapore sovereign wealth fund GIC Private Ld believes emerging markets now offer better value than developed ones and is particularly interested in exploring increasing investments in their technology sectors, a senior fund executive said.
GIC, ranked the world’s eighth-largest fund with $320 billion of assets by the Sovereign Wealth Fund Institute, has taken a series of stakes in information technology companies in markets like China and India in recent months………………………………………..Full Article: Source

Singapore’s GIC sees tougher decade ahead

Posted on 04 August 2014 by VRS  |  Email |Print

Singapore sovereign wealth fund GIC, which manages more than $US100 billion ($A108 billion) of the city-state’s foreign reserves, has warned of a tough investment outlook over the next decade as global central banks withdraw ultra-easy monetary policies.
GIC said the prices of all major asset classes have been inflated by the massive stimulus measures, and now face weak future returns. Global financial markets have been recovering strongly from the 2008/09 global financial crisis, supported by low interest rates and unconventional monetary policies,’ GIC said in its annual report on Saturday………………………………………..Full Article: Source

Russian Direct Investment Fund Not Affected by US, EU Sanctions

Posted on 01 August 2014 by VRS  |  Email |Print

The Russian Direct Investment Fund, a sovereign wealth fund, said Thursday its investment activity will not be affected by recent sectoral sanctions imposed on Russia by the United States and the European Union as the entity does not directly attract equity or debt financing.
“RDIF does not directly attract equity or debt financing but instead invests only its own funds together with co-investors. We have never attracted such direct financing and are not planning to do it in the future. Accordingly the sanctions do not affect RDIF investment activity in any way,” the Fund said in a statement. “Pursuant to RDIF constitutional documents the Fund is not allowed to acquire control in any company and therefore there is no impact on our portfolio companies as well,” the statement said………………………………………..Full Article: Source

Why Sovereign Wealth Centers on San Francisco Bay Area

Posted on 31 July 2014 by VRS  |  Email |Print

A number of Asian sovereign wealth funds continue to build ties to Silicon Valley, the hotbed for technology innovation and the rest of the San Francisco Bay Area. In a trailblazing signal, Malaysia’s Khazanah Nasional chose to open its U.S. office in San Francisco, not in New York City. Singapore’s GIC Private Limited also has an office in San Francisco and has invested in numerous investment funds and properties in the Bay Area.
Whether it’s Singapore’s Temasek Holdings investing in a Series round for a startup or allocating convertible debt to firms like Emeryville-based Amyris Biotechnologies, Inc., sovereign wealth capital continues to target opportunities rooted in the bay area………………………………………..Full Article: Source

World’s Biggest Wealth Fund Among Reach Energy Investors

Posted on 24 July 2014 by VRS  |  Email |Print

Malaysia’s Reach Energy Bhd. has attracted investors including Norway’s $890 billion sovereign wealth fund in an initial public offering to fund its acquisitions of oil and gas fields. orges Bank Investment Management, the world’s largest sovereign wealth fund, is among cornerstone buyers in the 750 million-ringgit ($237 million) IPO of Reach Energy, Managing Director Shahul Hamid Mohd Ismail said in a July 21 interview.
State-run funds Koperasi Permodalan Felda Malaysia Bhd. and Lembaga Tabung Haji are also buying stakes in the so-called special-purpose acquisition company, Shahul said………………………………………..Full Article: Source

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