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Mega-funds start to beat retreat from emerging markets

Posted on 28 January 2015 by VRS  |  Email |Print

Big pension, insurance and sovereign funds that kept faith with emerging markets during the massive selloffs of 2013 and 2014 may be starting to waver, potentially depriving the sector of a key source of support. while sovereign funds withdrew cash from emerging assets in three of the past five quarters, eVestment said pension funds, possibly under pressure to meet the needs of ageing populations, had maintained inflows.
Pension funds reporting to eVestment ploughed $20 billion into emerging markets in 2013 and $17.5 billion in the first nine months of last year. That contrasted with $11 billion in redemptions last year by sovereign wealth funds it tracks………………………………………..Full Article: Source

Gulf Arab sovereign wealth funds

Posted on 20 January 2015 by VRS  |  Email |Print

Plunging oil prices could prompt Gulf Arab sovereign wealth funds to pull tens of billions of dollars out of global markets this year, with much of the money expected to come out of U.S. dollar debt and deposits with banks abroad.
For over a decade, the funds of the six-nation Gulf Cooperation Council (GCC) have been big players in the securities markets of the developed world. They have grown rapidly; including the foreign assets of Saudi Arabia’s central bank, the GCC’s sovereign funds now total about $2.43 trillion, according to the International Monetary Fund. Most of that is invested overseas………………………………………..Full Article: Source

Canada’s Sovereign Wealth Funds: A Question of Consolidation

Posted on 19 January 2015 by VRS  |  Email |Print

It is a well-established fact that Norway has a massive sovereign wealth fund (SWF) from its oil resource, totaling US$893 billion; other oil producers such as the U.A.E. and Saudi Arabia have sizeable SWF’s as well, valued at $773 billion and $757 billion each [1]. However, it might come as a surprise that Canada also has a sovereign wealth fund; Alberta’s Heritage Fund which was built from Alberta’s oil income has a portfolio of $17.5 billion
Now, $17 billion is a large sum of money. In comparison with the SWF’s of Norway or other oil producers, however, it is a paltry amount. Considering that Alberta’s fund was created fourteen years prior to that of Norway’s (1976 for Alberta and 1990 for Norway), it is rather shocking that Alberta’s fund is so small………………………………………..Full Article: Source

1MDB ‘dirt’ so great even Mideast investors AFRAID for their investments

Posted on 19 January 2015 by VRS  |  Email |Print

Mounting troubles at Malaysia’s government-owned strategic investment company 1Malaysia Development Berhad, or 1MDB, which has a focus on promoting foreign direct investment in Malaysia, have caused alarm bells ringing for two of its main investment partners from the Middle East, the Qatar Investment Authority and Abu Dhabi’s Aabar Investment.
1MDB was up in 2009 by Malaysian Prime Minister Najib Razak “to drive strategic initiatives for long-term economic development” in Malaysia and has been focused on development projects in the areas of energy, real estate, tourism and agribusiness. But lately more on high-profile projects which came under fire from opposition politicians and media such as the Tun Razak Exchange, a new financial district in Kuala Lumpur named after Najib Razak’s father and partly funded by Aabar, and the 200-hectare Bandar Malaysia project, an integrated urban development also in Kuala Lumpur, of which one of the partners is the QIA………………………………………..Full Article: Source

Khazanah to continue invest overseas but will not neglect domestic market

Posted on 15 January 2015 by VRS  |  Email |Print

Khazanah Nasional Berhad will continue to invest overseas pending clarification of a directive for government agencies and companies to spend their money in Malaysia. The sovereign wealth fund, however, stressed that it would not neglect the domestic market and that it was ready to play a role in investing in the national economy.
Khazanah managing director Tan Sri Azman Mokhtar said at the same time, it was still not clear whether the directive, which had reportedly been issued by the Treasury, was applicable to Khazanah, since it is a company and not a statutory agency strictly bound by government directives………………………………………..Full Article: Source

Oil prices to stay low longer

Posted on 13 January 2015 by VRS  |  Email |Print

Global oil prices are most unlikely to rebound to $100 levels in near term. If the prices stay at current levels, Qatar may run a budget deficit in the current fiscal, though marginal, top market analysts said. If oil prices continue to stay at $50 levels, Qatar will face a marginal deficit in its budget ranging $5bn-$10bn. But Qatar’s Sovereign Wealth Fund (SWF) is healthy enough to meet its planned funding.
The estimated savings of the government are more than $150bn. If you look at these figures, the projected capital spending for the next five years will not be a problem. On the possible funding gap, in the event of dropping oil prices, Private sector is capable of filling the gap………………………………………..Full Article: Source

Hayman’s Bass Says Oil Plunge Will Discipline Petro-State Norway

Posted on 08 January 2015 by VRS  |  Email |Print

The oil rout that has dragged down Norway’s krone since June will ultimately discipline a government that has relied too much on its petro-dollars to finance expenditure. That’s according to Kyle Bass, the founder and chief investment officer of Hayman Capital Management LP, who was in Oslo yesterday to attend a Skagen AS conference.
Scandinavia’s richest economy is now enduring the flipside of an oil reliance that fueled its economic boom over the past decade. The country has channeled oil income into the world’s biggest sovereign wealth fund in an effort to avoid overheating the economy. As part of that goal, government spending from oil revenue is limited to 4 percent of the fund. Yet thanks to growth in the fund, that percentage represents a rising pile of cash………………………………………..Full Article: Source

Sovereign-Wealth Funds Went Full Steam Ahead Direct Investing in 2014

Posted on 07 January 2015 by VRS  |  Email |Print

Sovereign-wealth funds have been an increasingly aggressive force in the merger and acquisition arena by making multibillion-dollar acquisitions on their own as opposed to paying fees for others to invest on their behalf. These investment institutions also have been active funding startups, helping to drive valuations of some of the most sought-after new businesses, according to a report from research and consulting firm Sovereign Wealth Fund Institute Inc.
Among the most noteworthy startup funding by a wealth fund is Singapore’s GIC Private Ltd .’s investment in Chinese smartphone maker Xiaomi Corp., which raised more than $1 billion in a December round of funding. That round, led by tech investment fund All-Stars Investment with participation from GIC and others, values Xiaomi at more than $45 billion, making it one of the highest valued startups of all times………………………………………..Full Article: Source

Sovereign-Wealth Funds Ramp Up Late-Stage Funding of Startups

Posted on 06 January 2015 by VRS  |  Email |Print

Sovereign-wealth funds have been an increasingly aggressive force on the merger and acquisition arena by making multibillion-dollar acquisitions on their own as opposed to paying fees for others to do that.
These investment institutions also have been active funding startups, helping to drive valuations of some of the most sought-after new businesses ……………………………………….Full Article: Source

Russia May Burn Wealth Funds in 3 Years Without Cuts

Posted on 02 January 2015 by VRS  |  Email |Print

Russia, poised to enter a recession, will burn through its rainy-day funds in three years if the government doesn’t change the budget structure, according to Finance Minister Anton Siluanov With oil prices at $60 a barrel, Russia’s economy may contract about 4 percent next year and have a budget deficit of more than 3 percent of output, Siluanov told reporters in Moscow today. The ministry will use these estimates and an exchange rate of 51 rubles per dollar to review the 2015 budget.
Russia is facing its first recession since 2009, and the contraction may last for two years, according to economists in a Bloomberg survey. Oil, its biggest export earner, is trading near a five-year low, compounding the effect of sanctions imposed by the U.S. and its allies over President Vladimir Putin’s annexation of Crimea in March. The deterioration puts Russia at risk of a downgrade to below investment grade, Standard & Poor’s said this week………………………………………..Full Article: Source

Singaporean sovereign wealth fund beefs up global property portfolio

Posted on 02 January 2015 by VRS  |  Email |Print

Singapore’s GIC Pte Ltd, through international affiliates, recently invested in several property ventures around the world in an effort to achieve significant presence in various foreign markets. One of the fund’s latest investments include an agreement to acquire IndCor Properties, an industrial real estate company based in Chicago, from Blackstone Group LP, in a deal worth USD8.1 billion.
According to the Singaporean Business Times, IndCor owns nearly 11 million sqm of warehousing and distribution spaces in the United States. The company was formed by Blackstone in 2010 and currently operates in 23 states. The acquisition by GIC is expected to conclude in the first quarter next year………………………………………..Full Article: Source

Spies drawn by Norway’s wealth

Posted on 16 December 2014 by VRS  |  Email |Print

Norway’s emergence as a wealthy country, with one of the biggest and most powerful investment funds in the world, is being cited as one of the reasons that spies are targeting Norwegian government and business leaders. More reports on Monday of advanced spying equipment detected in and around Oslo puts Norway on the list of countries elsewhere that long have been subject to such espionage attempts.
Oslo’s new commercial and residential complex at Tjuvholmen has also reportedly been targeted by spies keen on tapping into the mobile phones of brokers, lawyers and other members of Norway’s financial elite…………………………………….Full Article: Source

Sovereign funds pave a path to shared prosperity

Posted on 09 December 2014 by VRS  |  Email |Print

A decade ago, the phrase “sovereign wealth fund” made some European and American politicians shudder. No wonder. Back then — or before the 2008 financial crisis — these entities mostly hailed from Asia and the Middle East, and were lamentably opaque. So much so, that they were popularly perceived in the West as the financial equivalent of a James Bond villain: shadowy, powerful and potentially sinister.
How times change. When UK Finance Minister George Osborne unveiled his Autumn Statement on Wednesday he tossed the word “sovereign wealth fund” into his speech. This was not to criticise, but to copy: he plans to create Britain’s first sovereign wealth fund to channel money from the future development of shale gas in the north of England into infrastructure………………………………………..Full Article: Source

Sovereign funds pave a path to shared prosperity

Posted on 05 December 2014 by VRS  |  Email |Print

A decade ago, the phrase “Sovereign Wealth Fund” made some European and American politicians shudder. No wonder. Back then — or before the 2008 financial crisis — these entities mostly hailed from Asia and the Middle East, and were lamentably opaque. So much so, that they were popularly perceived in the west as the financial equivalent of a James Bond villain: shadowy, powerful and potentially sinister.
How times change. When George Osborne, UK chancellor, unveiled his Autumn Statement on Wednesday he tossed the word “sovereign wealth fund” into his speech. This was not to criticise, but to copy: he plans to create Britain’s first sovereign wealth fund to channel money from the future development of shale gas in the north of England into infrastructure………………………………………..Full Article: Source

Shrinking oil revenues could dig into funds

Posted on 05 December 2014 by VRS  |  Email |Print

Energy-exporting countries which have stashed billions in windfalls in sovereign investment funds may be forced to draw down on them as oil revenues shrink, sending a chill through stock, bond and property markets worldwide. Oil-based sovereign wealth funds are a major force in international finance, holding more than $5 trillion (R56 trillion) in assets, according to David Spegel, an emerging markets expert at BNP Paribas.
The funds’ money is typically split into baskets serving distinct functions, propping up government spending at times of falling export revenues or managing windfalls over decades for future generations. Norway’s government is allowed each year to take up to 4 percent of its $850 billion wealth fund, the world’s largest, though it only spent 2.8 percent this year, using the money to pay for tax cuts………………………………………..Full Article: Source

For UAE sovereign wealth funds, it’s time for Africa

Posted on 01 December 2014 by VRS  |  Email |Print

UAE-based sovereign wealth funds (SWFs) are seeing increasing opportunities in African countries and some of the leading emerging markets of the world demonstrating a shift in the focus of their asset allocations. “[The] UAE is home to one of the largest SWFs in the world and recently has played a significant role in establishing relations with African countries, resulting in commitments worth $19 billion (Dh69.7 billion) from UAE investors, across 17 infrastructure projects,” said Ashish Dave, KPMG Partner and head of private equity and SWFs.
This paves the way for future investments as economic linkages between the UAE and African countries continue to strengthen, in part driven by the investment strategies of local SWFs. Interestingly, SWFs in the Middle East are viewing the West with caution and as a result have invested less internationally than they have done in the past while redirecting a portion of their funds from international investments back into the Middle East………………………………………..Full Article: Source

Middle East sovereign funds to maximise returns through diversifications

Posted on 01 December 2014 by VRS  |  Email |Print

Emerging strong form the global financial crisis with changed investment strategies, Middle East Sovereign Wealth Funds (SWFs) are expected to generate the best returns for their stakeholders, according to a KPMG report on Sovereign Wealth Funds (SWFs) in the Middle East.
Over the past two years, there has been a shift in how the Middle East’s SWFs have had to reallocate their assets. The changes are driven by market forces including the unprecedented low-interest rate environment. “While the majority of SWFs continue to deploy their funds in bonds and global equities, a relatively low interest rate environment, continually evolving investment strategies and a growing appetite for alternative asset classes are resulting in a shift away from what has typically been a passive investment philosophy,” sad Vikas Papriwal, KPMG Partner and Head of Markets………………………………………..Full Article: Source

What the Nordic states can teach us about investing mining wealth

Posted on 26 November 2014 by VRS  |  Email |Print

The government formed the Petroleum Fund, into which money began to be deposited in 1996. In 2006 this became the Government Pension Fund – Global (Statens Pensjonsfond). It is commonly referred to by Norwegians as the Oljefondet (oil fund), while it is often referred to in other parts of the world as Norway’s “sovereign wealth fund”.
The fund is fully owned by the Norwegian state through the Ministry of Finance. It is managed by Norway’s central bank (Norges Bank). It has grown to be worth more than 5000 billion Norwegian kroner — some $800 billion. The fund takes in all the considerable revenues which the government receives from Norway’s oil and gas, including taxes, ownership shares and dividends from Statoil………………………………..Full Article: Source

Why 2015 will be year for ME wealth funds

Posted on 25 November 2014 by VRS  |  Email |Print

Middle East Sovereign Wealth Funds (SWFs) have been forced to navigate shifting economic currents at home and abroad as they seek to invest their oil-fuelled capital to generate the best returns for their stakeholders, according to a newly published KPMG report on SWFs in the Middle East.
The report was published in collaboration with the Institutional Investor’s Sovereign Wealth Centre. Over the past two years, there has been a shift in how the Middle East’s Sovereign Wealth Funds have had to reallocate their assets. The changes are driven by market forces including the unprecedented low-interest rate environment…………………………………Full Article: Source

Sovereign wealth fund acquisitions surge as confidence returns

Posted on 24 November 2014 by VRS  |  Email |Print

Sovereign wealth funds are buying up assets this year at their fastest rate since the financial crisis as these state-run pools of assets regain the confidence lost when big punts on western banks turned sour, Thomson Reuters data shows.
Thomson Reuters data shows sovereign wealth funds, which invest windfall revenues from oil and other exports for future generations, were involved in deals worth $40 billion (25.55 billion pound) in the first nine months of 2014, the highest rate since 2007. The money was spent across 79 transactions – the highest number since 2008 – with real estate and infrastructure dominating the deal flow…………………………………..Full Article: Source

Qatar Wealth Fund Says Oil’s Slump Won’t Derail Strategy

Posted on 21 November 2014 by VRS  |  Email |Print

Qatar’s sovereign-wealth fund, which controls more than $100 billion of assets, said the slump in crude prices won’t lead to a change in its investment plans. “We’ve been created to avoid the volatility in oil price,” Ahmed Al-Sayed, chief executive officer of the Qatar Investment Authority, told reporters in Doha today. “We are already adjusted and ready for such a scenario.”
Qatar, the richest country in the world on a per-capita basis, has deployed surplus income from liquefied natural gas exports into real estate, banks, and automakers………………………………….Full Article: Source

Volatile oil prices will not affect Qatar wealth fund strategy - CEO

Posted on 21 November 2014 by VRS  |  Email |Print

Volatile oil prices will not force the Qatar Investment Authority (QIA) to change its investment strategy, the sovereign wealth fund’s chief executive said on Thursday. A plunge in prices - benchmark Brent crude fell to more than a four-year low of below $77 per barrel last week - is hitting the finances of Gulf Arab oil exporting countries, which rely on crude and gas sales for most of state revenue.
“In QIA, we have a long-term strategy, which accounts for the volatility in the market,” Ahmed al-Sayed told reporters on the sidelines of the industry conference in Doha. “We are adjusted and ready for such a scenario.” Asked whether there will be a short-term adjustment, he told a news conference: “No, I don’t think so. We evaluate the market from time to time.”…………………………………Full Article: Source

Sovereign fund forum has no plan to include central banks - official

Posted on 21 November 2014 by VRS  |  Email |Print

The International Forum of Sovereign Wealth Funds (IFSWF) will not invite central banks to join its ranks as they do not fit the group’s definition of such a fund, a board member said on Thursday.
The forum, a grouping founded with International Monetary Fund backing that promotes a voluntary code of practice, said in September it would explore whether to take in a wider pool of state-backed investors including central banks………………………………….Full Article: Source

RDIF joins International Forum of Sovereign Wealth Funds

Posted on 21 November 2014 by VRS  |  Email |Print

The Russian Direct Investment Fund (RDIF) is representing Russia at the International Forum of Sovereign Wealth Funds (IFSWF) - an organisation that brings together the world’s leading sovereign wealth funds and government-run pension funds.
During the meeting, currently taking place in Doha (Qatar), senior executives of 28 sovereign wealth funds signed agreements and in doing so concluded the process of establishing the IFSWF as an independent professional association. Due to the growing influence of sovereign wealth funds on the global economy and their investment activities not being politically driven, the IFSWF became independent from the International Monetary Fund………………………………….Full Article: Source

Consumer inflation exceeds core inflation for the third straight month in Azerbaijan

Posted on 20 November 2014 by VRS  |  Email |Print

Parliament of Azerbaijan clamped down on an attempt to withdraw assets of the State Oil Fund of Azerbaijan (SOFAZ) from the world markets in order to decrease internal loan rate to 2%. Valeh Alasgarov, Vice Speaker of the Parliament, called for the deputies to stop speculative talks on impact of fall in the world oil prices to the economy of the country and on withdrawal of SOFAZ assets from foreign markets.
“Can you imagine what could happen if Azerbaijan hadn’t accumulate funds in the Oil Fund? What kind of future could we face if we hadn’t allocate funds for implementation of Shah Deniz, TAP, TANAP and other projects, as well as for construction of the bridge over Samur. I want to say that every decision taken by the government of Azerbaijan is well-considered and reasonable and it’s confirmed by today’s development of our economy and today’s image of our country. That’s why I call for the deputies to stop such talks and speculations on the existing situation”, - Alasgarov said……………………………….Full Article: Source

Iran to draw on sovereign fund to withstand oil price slide

Posted on 17 November 2014 by VRS  |  Email |Print

Iran will draw on its sovereign wealth fund to cope with damage to its economy from plunging global oil prices, Iranian Oil Minister Bijan Zanganeh was quoted by the ministry’s news agency Shana as saying. “By drawing upon its National Development Fund to reimburse contractors active in upstream projects, Iran will make up for the impact of the oil revenue decline on these projects,” Zanganeh said, according to a Shana report on Saturday.
Iran’s National Development Fund is worth about $62 billion, according to the Sovereign Wealth Fund Institute, which tracks the industry. Some of its assets may be frozen by international sanctions imposed over Iran’s disputed nuclear programme………………………………….Full Article: Source

Brazil, China, India still offer investment value - CPPIB

Posted on 14 November 2014 by VRS  |  Email |Print

Brazil, China and India still offer long-term investment value but a lot of global assets are fully priced and competing with huge sovereign wealth funds is getting harder, one of Canada’s biggest dealmakers said on Thursday. Mark Wiseman, CPPIB’s chief executive, said he’s optimistic about North American assets and longer-term plays in Brazil, China and India, where economic growth looks set to continue.
Wiseman said the market is seeing the growth of large and increasingly sophisticated pools of capital in the form of sovereign wealth funds, in Singapore, South Korea, China and the Middle East, all of whom are competing for similar deals…………………………………..Full Article: Source

Why Sovereign Wealth Funds Were Smarter Than Yahoo Shareholders

Posted on 12 November 2014 by VRS  |  Email |Print

Sunnyvale-based Yahoo was founded by hungry entrepreneurs, Jerry Yang and David Filo. Post dot-com-boom, Yahoo had acquired, sold and shuttered many high-profile acquisitions such as Geocities, Overture Services, Hotjobs.com, Right Media and Broadcast.com (which made Mark Cuban very rich.)
In 2013, Yahoo paid US$ 1.1 billion for a blog service called Tumblr, founded by young entrepreneur David Karp. Yahoo had purchased the trendy startup aspiring to challenge Facebook and Twitter. When Yahoo booked goodwill worth US$ 750.9 million from the deal, the company rebutted,”The acquisition of Tumblr is expected to bring a significant community of users to the Yahoo! network.” In comparison, back in 2013, Yahoo had only US$ 74 million in tangible assets………………………………………..Full Article: Source

Asian Sovereign Wealth Fund Portfolios Still Dominated by Equities

Posted on 07 November 2014 by VRS  |  Email |Print

Despite strong attention focused on allocation to alternatives such as private equity and real estate by Asian sovereign wealth funds (SWFs), their allocations to equities continued to dominate through year-end 2013, says a report by research firm Cerulli Associates Asia.
About 70% of Singapore’s Temasek Holdings’ investments are in listed securities, according to the Singapore firm’s latest annual report. Korea Investment Corporation’s exposure to equities has been increasing steadily, from 41.8% in 2010 to 48.5% in 2013. China’s China Investment Corporation has a slightly lower ratio of 40.4% of its portfolio in public equities as of 31 December 2013………………………………………..Full Article: Source

Biggest Wealth Fund to Expand Liquidity to New Markets

Posted on 06 November 2014 by VRS  |  Email |Print

Norway’s $860 billion sovereign wealth fund, the world’s largest, is expanding its securities lending to new markets where it also plans to provide liquidity as part of a strategy to generate higher returns.
“We already have a security lending program, but we will expand that into more types of specific liquidity commissioning strategies,” Yngve Slyngstad, chief executive officer of the Oslo-based fund, said during a seminar today. “We will come back to the details about that later.”……………………………………….Full Article: Source

GIC Bucks Trend With Bid for IndCor

Posted on 05 November 2014 by VRS  |  Email |Print

Singapore state investment firm GIC Private Ltd.’s move to bid on a Blackstone Group-backed real estate investment trust runs somewhat counter to a shift away from direct real estate investing among sovereign wealth funds.
A new report from Sovereign Wealth Center, part of publishing and events company Euromoney Institutional Investor PLC, found that sovereign funds this year moved away from direct investment in real estate in favor of deals in other industries such as technology………………………………………..Full Article: Source

Kazakhstan not to feel drop in oil prices - not in short-term

Posted on 05 November 2014 by VRS  |  Email |Print

Kazakhstan is among the top oil and gas producers in the world and Kazakhstan depends much on its oil and gas revenues. The large part of these revenues are saved in the State Petroleum Fund for future generations. It accumulated $93.9 billion as of 2014. This Fund allows to stabilize the national economy and its resources in theory could be used for implementation of strategic projects in case of low revenues from oil export.
Earlier Kazakh President Nursultan Nazarbayev gave permission to use money from the National Fund for development of the national economy. This decision is not connected with oil prices because it was it taken long before when they were at high level. Thus any strategic projects will have enough money and will be implemented………………………………………..Full Article: Source

World’s top SWFs failing on transparency

Posted on 04 November 2014 by VRS  |  Email |Print

Sovereign wealth funds (SWFs) across Asia and the Middle East, which count themselves among the world’s top institutional investors, are failing when it comes to transparency and governance, a new report said. Switzerland-based political risk researcher GeoEconomica evaluated 31 major SWFs, holding assets worth a combined US$4 trillion, against the Santiago Principles; a globally accepted voluntary code of governance and financial disclosure.
The GeoEconomica report found eight SWFs to be fully-compliant with the Santiago guidelines. These included: the Petroleum Fund of Timor-Leste; Australia’s Future Fund; the New Zealand Superannuation Fund; and Norway’s Government Pension Fund Global………………………………………..Full Article: Source

Middle East sovereign funds increasing allocation to home markets

Posted on 03 November 2014 by VRS  |  Email |Print

Middle East sovereign investors who account for $1.4 trillion of assets managed globally are allocating significantly high portion of their assets to home markets, but increasingly these funds are expanding their allocation to emerging markets and alternate asset classes according Invesco Asset Management. The findings are from the Invesco Asset Management Study. The Middle East study, the fifth annual survey of its kind, was based on 52 interviews with employees at sovereign wealth funds.
Home market allocations by Middle East sovereign investors are about 42 per cent on average. Sovereign investors are broadly categorised into 4 categories based on their objectives such as investment, development, liquidity and liability. Overall the Middle East is weighted to development and investment sovereigns compared to the global average. However, in terms of assets, the Middle East is strongly weighted to investment sovereigns………………………………………..Full Article: Source

Libya’s $60bn sovereign wealth fund thrown into chaos

Posted on 31 October 2014 by VRS  |  Email |Print

Libya’s $60bn sovereign wealth fund has been thrown into chaos by the sudden replacement of its chairman amid a fierce power struggle for control between the official elected government and Islamists who have seized control of the capital Tripoli. Former minister Abdulrahman Benyezza was replaced as chairman of the board of the fund on October 27, The Telegraph understands. His position was taken by Hassan Ahmed Bouhadi.
The change at the top of the Libyan Investment Authority (LIA) comes as the fund, which was the main investment vehicle of the former regime led by Muammar Gaddafi, is locked in a bitter court battle with Wall Street giant Goldman Sachs. The LIA is claiming that the bank cosied up to its employees and hoodwinked it into making $1.2bn-worth of trades during the Gaddafi era that it did not understand, and is seeking damages………………………………………..Full Article: Source

Sovereign-wealth funds are cutting out the middleman

Posted on 31 October 2014 by VRS  |  Email |Print

Sovereign-wealth funds and other big institutional investors from Ottawa to Oslo and—if icefishing isn’t your thing—Abu Dhabi to Auckland are hiring. The intention is to lure talent from private-equity firms and hedge funds in order to make the same sort of investments in-house. Sovereign-wealth funds made direct investments of around $186 billion last year, nearly triple the level of 2012, according to the Sovereign Wealth Fund Institute, a consultancy.
Pension funds, insurers and family offices are doing the same—a response in part to the exorbitant fees and disappointing returns of many asset-managers. ADIA, Abu Dhabi’s sovereign-wealth fund, with assets of $773 billion, now employs 1,500 people. South Korea’s National Pension Service ($430 billion) will boost its investment team by 60 people this year………………………………………..Full Article: Source

Sovereign Wealth Funds Flex Their Muscle in Direct Investing

Posted on 29 October 2014 by VRS  |  Email |Print

When Blackstone Group was bidding for human resources software vendor Kronos Inc last year, the firm met an unexpected co-investor: GIC Private Ltd., a sovereign wealth fund from Singapore and a limited partner of Blackstone’s, which wanted to invest alongside Kronos’s prospective buyer.
Blackstone didn’t anticipate GIC’s interest but teamed up with the fund nonetheless, dividing a 44% stake in Kronos between the two. Existing investor Hellman & Friedman remained the majority stakeholder in Kronos………………………………………..Full Article: Source

The Temasek story: Growing with Singapore

Posted on 29 October 2014 by VRS  |  Email |Print

Temasek Holdings works for a better tomorrow as a responsible and trusted steward, said its executive director and CEO Ho Ching, who was awarded the Asian Business Award by London-based business think-tank Asia House. Below is an extract of her speech at the award ceremony dinner in London on Monday.
Singapore was already known in the second century to the Greco-Roman world as a trading post. Ptolemy named it Sabana. Third-century merchants from China called it Pu Luo Zhong — the Island at the End. In 1819, nearly 200 years ago, Sir Stamford Raffles took over Singapore towards the tail end of the Anglo-Dutch spice trade tussle in the Far East. This little island trading post grew quickly………………………………………..Full Article: Source

QIA leads fund rankings for missing Santiago governance standards

Posted on 28 October 2014 by VRS  |  Email |Print

The world’s most active sovereign wealth funds are also among the least transparent and least likely to comply with corporate governance norms, according to a review by consultancy GeoEconomica. The Geneva-based political risk group ranked 31 funds against principles of good governance and financial disclosure standards that they all signed up to in Santiago in 2008, and found that many of the most active groups fell short.
GeoEconomica’s conclusion underscores the opaque nature of some funds, which have the deepest pockets, even as they pervade the corporate world by expanding abroad and ramping up their direct investments in companies and infrastructure projects………………………………………..Full Article: Source

Investors Can Learn From Sovereign Wealth Fund Painful Lessons

Posted on 24 October 2014 by VRS  |  Email |Print

In recent years I’ve been watching the mismanaged investments of another class of supposedly savvy investors—sovereign wealth funds. These emerging heavyweight investors—new to Wall Street—seem to be making all the wrong moves, such as blindly trusting the same old investment powerhouses that have proven to most Americans they can’t be trusted.
Worse still, sovereign wealth funds (like U.S. public pensions) get seduced into “exclusive” strategic partnerships with investment firms that have rap sheets that would make a serial killer blush. Little analysis is undertaken regarding concerns that are paramount to institutional investors in America today such as conflicts of interest, fiduciary duties, corruptive industry practices, undisclosed and excessive compensation arrangements, fraud and misrepresentation and their impact upon net performance………………………………………..Full Article: Source

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

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