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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

Optimising fortunes of Nigeria’s Sovereign Wealth Fund

Posted on 23 July 2014 by VRS  |  Email |Print

In many parts of the world, Sovereign Wealth Fund (SWF) has become an effective tool to transform the economic landscape and development aspirations of countries, especially those endowed with enormous oil wealth or other commodities. However, in their quest to attain Eldorado, some have succeeded, while a good number have burnt their fingers.
While some countries such as the Gulf States have employed the instrumentality of their sovereign wealth funds to develop their economies, Saudi Arabia and some others remain undeveloped poverty-stricken nations, in spite of their oil wealth. The rulers in these countries, instead of developing their economies prefer to bail out Western countries and buy U.S treasure bonds………………………………………..Full Article: Source

Government Fund With Majority Malaysia Airlines Stake Considers Taking It Private

Posted on 21 July 2014 by VRS  |  Email |Print

The government fund that owns a majority stake in Malaysia Airlines is increasingly leaning toward taking the company private, after the carrier lost a second plane in five months, according to people familiar with the matter.
Khazanah Nasional Bhd., Malaysia’s state investment fund and holder of a 69% stake in flag-carrier operator Malaysian Airline System Bhd., had already been considering a purchase of the rest of the company, along with other restructuring proposals, even before a full flight from Amsterdam to Kuala Lumpur crashed in Ukraine on Thursday………………………………………..Full Article: Source

Will 1MDB go bust without asset revaluations?

Posted on 18 July 2014 by VRS  |  Email |Print

The Finance Ministry must explain whether 1Malaysia Development Bhd (1MDB) may go bankrupt or even insolvent if they continue to rely on an Asset Revaluation Gain of RM2.7 billion to record a profit of RM778 million and ignores the rise in total debts to RM42.3 billion that nearly matches its total assets of RM44.7 billion.
When 1MDB finally submitted its much-delayed accounts for financial year 2013 ended March 31to the Companies Commission of Malaysia, after having changed auditors, 1MDB revealed once againthat it cannot make money without creatively manufacturing a paper profit from land revaluation………………………………………..Full Article: Source

Russian sovereign wealth fund launches Chinese webpages

Posted on 17 July 2014 by VRS  |  Email |Print

The Russian Direct Investment Fund, a sovereign wealth fund, launched a Chinese version of its “Invest in Russia” information portal Wednesday. The portal is tailored for Chinese users and contains specific data on Sino-Russian economic, trade and investment cooperation.
In a statement emailed to Xinhua, the fund said the portal provides statistical and analytical data from various industries and regions, as well as a database of potential development sites where production assets could be located. It also includes data on investment opportunities in different regions………………………………………..Full Article: Source

GIC said to have backed out of Tokyo property deal

Posted on 16 July 2014 by VRS  |  Email |Print

Singapore sovereign wealth fund GIC has backed out of buying a Tokyo property from Lone Star Funds due to a legal dispute over the property’s ownership, said people familiar with the transaction.
GIC earlier this year agreed to buy Meguro Gajoen, an office complex and a wedding hall, for about US$1.3 billion (S$1.61 billion). If finalised, it would be one of the largest property deals in Tokyo since the 2008 financial crisis. However, GIC is now cautious about completing the sale due to a lawsuit filed in April by the family of Meguro Gajoen’s founder, Mr Rikizo Hosokawa, said the sources………………………………………..Full Article: Source

Temasek Ramps Up New Investments

Posted on 09 July 2014 by VRS  |  Email |Print

Temasek Holdings Pte. Ltd. increased its investments in the year ended in March to the highest since the global financial crisis, even as weaker markets in Asia slowed the growth of its portfolio, which touched a record 223 billion Singapore dollars (US$179 billion).
Singapore’s state-investment company invested S$24 billion, up 20% from the preceding year, as it capitalized on opportunities from an uneven global economic recovery, according to its latest annual report released Tuesday…………………………………..Full Article: Source

Singapore’s Temasek takes it on the chin

Posted on 09 July 2014 by VRS  |  Email |Print

Despite last year’s global stock market rally, Temasek Holdings, Singapore’s sovereign wealth fund, generated a shareholder return of just 1.5 percent for the 12 months ended March 31, hurt by its focus on Singapore and China.
“It’s nothing to do the dance of joy over, but it’s still squeezing a positive TSR (total shareholder return)” despite “paper losses” on its equity holdings,” said Song Seng Wun, head of research at CIMB. “On the plus side, hopefully, is that the new net investment will help future earnings,” he said, but added he expects it will take a while for the China rebalancing story to play out…………………………………..Full Article: Source

Temasek Holdings optimistic on China prospects

Posted on 09 July 2014 by VRS  |  Email |Print

Temasek Holdings is optimistic about China’s prospects, and said it will continue to invest in Chinese banks. Speaking at a briefing on its performance for the 12 months ended March 2014, the Singapore investment firm said Chinese banks are a good proxy for the long term growth of the world’s second largest economy.
As for concerns on shadow banking in China, Temasek said it is closely monitoring this, and that the Chinese government has put in place measures to address the issue. Wu Yibing, head (China) of Temasek Holdings, said: “Overall we see they have plenty of policy headroom and also plenty of political will to address these questions…………………………………..Full Article: Source

Temasek remains keen on Chinese lenders

Posted on 09 July 2014 by VRS  |  Email |Print

Singapore’s sovereign investor Temasek Holdings Pte Ltd said yesterday it intends to keep investing in Chinese banks even as it reported a slowdown in its portfolio growth due to a drop in the value of some of its bank holdings.
Temasek, headed by Ho Ching, the wife of Prime Minister Lee Hsien Loong, owns a six per cent stake in China Construction Bank and a two per cent stake in Industrial and Commercial Bank of China. It also has holdings in other banks, including a stake of just under 18 per cent in British bank Standard Chartered…………………………………..Full Article: Source

Leakages, political bickering threaten Nigeria SWF goals

Posted on 09 July 2014 by VRS  |  Email |Print

The goals of Nigeria’s Sovereign Wealth Fund (SWF), which include providing a countercyclical rainy day fund, as well as savings for future generations is being threatened by political bickering and oil revenue leakages.
While the SWF announced last month that it made capital gains of N1.2 billion ($7.75 million) in the first quarter (Q1) of 2014 representing 0.5 percent return on total capital of $1.55 billion, the need to grow the fund through regular monthly transfers by the Government has failed to materialise…………………………………..Full Article: Source

Malaysia Airlines to be privatised and restructured

Posted on 04 July 2014 by VRS  |  Email |Print

Sovereign wealth fund, Khazanah Nasional is planning a “major restructuring of the loss-making airline,” Malaysia Airlines (MAS) Reuters has reported. The carrier has been severely affected by the ongoing turbulence surrounding the disappearance of Flight MH370.
MAS has experienced a steep drop in passenger traffic since the aircraft was reported missing, a deciding factor in it announcing record losses for 2014 to date. MAS’ financial troubles predate Flight MH370, having posted losses for the last three years in an increasingly crowded market. Its market share has been increasingly narrowed by rivals such as AirAsia and Lion Air on short-haul routes, and the big three Gulf carriers on medium and long-haul flights………………………………………..Full Article: Source

Khazanah may take Malaysia Airlines private

Posted on 03 July 2014 by VRS  |  Email |Print

Malaysian state investor Khazanah Nasional plans to take Malaysia Airlines private as the first step in a major restructuring of the loss-making carrier following the disappearance of Flight MH370, said two people with knowledge of the matter.
A delisting would pave the way for Khazanah to revive the ailing carrier, possibly by selling its profitable engineering, airport services or budget airline units, trimming its payroll and installing a new management team………………………………………..Full Article: Source

Russian state fund attracts western investors for Moscow Exchange deal

Posted on 03 July 2014 by VRS  |  Email |Print

Several investors, including those from Europe and the US, have partnered with a Russian state-owned fund to invest in the Moscow stock exchange, despite rising tensions with the west over Russia’s annexation of the Ukrainian region of Crimea earlier this year.
The Russian Direct Investment Fund, a $10 billion vehicle set up in 2011 to help attract foreign investment into the country, said on Wednesday that it has teamed up with a consortium of unnamed institutional investors from the UK, Germany, US, China, Singapore, United Arab Emirates and Qatar to buy part of the Moscow Exchange being sold by the Central Bank of Russia………………………………………..Full Article: Source

Norway’s Frontier Gamble Will Bolster Market, HSBC Says

Posted on 26 June 2014 by VRS  |  Email |Print

Norway’s decision to have its $890 billion sovereign wealth fund boost investments in frontier markets will probably attract more institutional investors to the asset class, according to HSBC Holdings Plc.
The sovereign wealth fund, which is the world’s largest, said in a strategy report yesterday that it will target more frontier markets and include additional currencies to generate higher returns. MSCI Inc.’s gauge of stocks in the smaller developing nations has gained 16 percent this year, more than triple the 4.5 percent return on its emerging markets Index………………………………………..Full Article: Source

Norway Sovereign Wealth Fund Unveils “New Strategy” - Buy 5% Of Every European Stock

Posted on 26 June 2014 by VRS  |  Email |Print

Having learned last week that the world’s central banks are their sovereign wealth proxies have secretly pumped over $29 trillion into markets in the last few years, it is not entirely surprising to hear from one of the largest - Norway $888 billion oil fund - that it is buying stocks with bond hands and feet.
As The Financial Times reports, Yngve Slyngstad, chief executive of Norway’s sovereign wealth fund, is hiring aggressively to manage its real estate portfolio and while the oil fund already owns 2.5% of every listed European company on average, it plans to go above 5%. Phew, bagholder found………………………………………….Full Article: Source

Russia: Minister Proposes Splurging Welfare Fund on Infrastructure Projects

Posted on 26 June 2014 by VRS  |  Email |Print

Russia should take all of the money from a fund earmarked to cover future pension deficits and invest it in profitable infrastructure projects to generate good returns, Economic Development Minister Alexei Ulyukayev told the Vedomosti business daily in an interview published Wednesday. The government earlier this month raised the cap on spending from the National Welfare Fund, which collects revenue from oil and gas sales, the country’s biggest exports.
It now allows 60 percent of the fund to be spent on domestic infrastructure projects, up from an earlier 40 percent. The fund, designated to cover the future pension deficit of the country’s rapidly aging population, was $87 billion at the beginning of the month………………………………………..Full Article: Source

Bullish sovereign funds will look to emerging markets, says survey

Posted on 26 June 2014 by VRS  |  Email |Print

Middle East sovereign wealth funds will remain focused on emerging markets as they seek long term growth from India, Africa and Latin America, a new study has found. Alternative investments, including property and private equity will also figure largely, according to the Invesco Global Sovereign Asset Management Study from the US-based investment management company.
About 54 per cent of Middle East sovereign investors, which includes sovereign wealth funds (SWFs), state pension funds, central banks and government ministries, will increase their funding levels this year, driven by strong country surpluses and government support………………………………………..Full Article: Source

How Alberta turned its Heritage Fund into a cash machine for big-spending politicians

Posted on 26 June 2014 by VRS  |  Email |Print

Alberta’s Heritage Savings Trust Fund stands as an excellent example of how governments waste opportunity, fritter away money and undermine the long-term interests of taxpayers, even as they claim to be working in the public interest.
On Tuesday the Fund revealed it earned $2.1 billion last year, a record 16% return on investment, and now has $17.5 billion in the kitty. This was treated as a triumph by provincial leaders………………………………………..Full Article: Source

Why a £520bn oil fund could give your portfolio an extra kick

Posted on 25 June 2014 by VRS  |  Email |Print

Which country has the largest sovereign wealth fund? The UK? Germany? Guess again… with just a population of four million people, it’s Norway. Norges Bank Investment Management has benefited from the country’s vast oil wealth, tripling its assets under management (AUM) since the financial crisis to $888bn.
To ensure that it can cope with the surge of inflows, it has announced that it will expand its mandate to invest more actively in both bonds and equities over the next years, which some experts believe could provide a boost for two markets in particular. Managers of the fund will widen its mandate to include frontier markets for the first time and will more than double the number of large companies it has more than 5 per cent in – from 45 to 100……………………………………….Full Article: Source

What Sovereign Wealth Funds Think Now

Posted on 24 June 2014 by VRS  |  Email |Print

Sovereign wealth funds–charged with preserving the accumulated fortunes of their home nations–are well known for their opaque, tightly-guarded investment decisions. Shining a light behind their closed doors isn’t easy. But U.K. asset manager Invesco has attempted to provide a glimpse at what these behemoth funds are thinking, and has compiled a second-annual survey of 52 sovereign investors.
The thick report is full of intriguing statistics, but perhaps the biggest reason to pay attention is the simplest: the investors interviewed control, and deploy, enormous amounts of money. The group surveyed manages a mind-boggling $5.7 trillion of assets, an amount on par with the collective economic output of Germany and the U.K. combined………………………………………..Full Article: Source

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