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Norwegian oil fund draws up contingency plans for war

Posted on 13 June 2016 by VRS  |  Email |Print

Sovereign wealth fund is prepared to protect its assets from extreme political events. The $850bn Norwegian oil fund has drawn up contingency plans to protect its assets from extreme political events such as a military invasion or coup. This comes at a time when the stability of several international sovereign wealth funds is in question.
Norges Bank Investment Management, which oversees the world’s largest sovereign wealth fund, told FTfm that the oil fund had “drawn up contingency plans for various scenarios that represent a threat to the fund’s holdings”………………………………………..Full Article: Source

After shock of redemptions, sovereign funds rethink strategies

Posted on 10 June 2016 by VRS  |  Email |Print

Having gone from bumper cash inflows to redemptions in just two years, many sovereign wealth funds have been forced to shake up their investment strategies to embrace both super-liquid safe assets with more esoteric illiquid plays to bolster returns.
If the price of retaining easy-to-sell assets to meet sudden government cash calls is near-zero yields in cash deposits or Western government debt, then the $6.5 trillion sovereign fund sector will have to claw back returns by simultaneously moving deeper into riskier, less-liquid territory………………………………………..Full Article: Source

Sovereign wealth funds throw funding lifeline to tech ventures

Posted on 08 June 2016 by VRS  |  Email |Print

A succession of funding deals by deep-pocketed sovereign wealth funds have thrown a life preserver to some of the world’s biggest private tech firms whose high valuations have come under scrutiny in the past year. Saudi Arabia and other Gulf States along with state-backed investors in Singapore and China have ploughed money into hot tech investments such as ride-sharing company Uber and Chinese Internet giant Alibaba and its private affiliates.
With overall funding for start-ups slowing down by a third to $25.5 billion in the last two quarters, according to data from CB Insights, high-profile ventures are turning to government funds or institutional money to create “private IPOs” rather than to venture capitalists or chancing public listings………………………………………..Full Article: Source

Why Sovereign Wealth Funds Should Look at Currency Alpha

Posted on 08 June 2016 by VRS  |  Email |Print

Steady globalization, government interventions and increased investment into rapidly developing economies are key factors influencing emerging market currencies. Sovereign funds and large Canadian pensions, such as the Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan (OTPP), continue to invest capital into markets such as India, Brazil and China.
Sizable portfolios of listed securities have accumulated for wealth fund investors in non G-7 economies, thus exposing them to currency risk. Public institutional investors continue to weigh the benefits of currency management and alpha opportunities versus the cost. According to SWFI Compass, an RFP and opportunity tracker, there continues to be compelling demand in 2016 for allocation to emerging market external fund managers………………………………………..Full Article: Source

Uber deal marks more aggressive Saudi investment drive

Posted on 06 June 2016 by VRS  |  Email |Print

Saudi Arabia’s surprisingly high-profile injection of $3.5 billion into Uber signals a more aggressive global investment presence by a kingdom trying to wean its economy off oil. San Francisco-based Uber, a smartphone app that connects passengers and drivers around the world, said on Wednesday the funding from Saudi Arabia’s Public Investment Fund would help Uber’s global expansion.
The PIF acted roughly six weeks after Deputy Crown Prince Mohammed bin Salman announced a wide-ranging plan to transform the kingdom’s oil-dependent economy………………………………………..Full Article: Source

Will more start-ups follow Uber in taking cash from sovereign wealth funds?

Posted on 03 June 2016 by VRS  |  Email |Print

Start-ups have long been the domain of venture capitalists. But with this week’s staggering $3.5-billion investment in Uber from Saudi Arabia’s Public Investment Fund, the tech world has been put on notice — sovereign wealth funds are loaded with cash and ready to do business directly.
Paltry interest rates and volatile oil prices have made technology companies attractive to these government investment vehicles, which have assets of $7.2 trillion today, according to the Sovereign Wealth Fund Institute………………………………………..Full Article: Source

The secret to how startups like Uber raise billions

Posted on 03 June 2016 by VRS  |  Email |Print

Just when you thought the startup market can’t possibly get any crazier, Uber goes and raises another $3.5 billion in funding. That jaw-dropping amount of money, the single largest round of funding ever raised by a private U.S. company, highlights both the insatiable appetite certain startups have for capital and the little-discussed way they get that money.
Uber’s $3.5 billion in funding didn’t come from the usual collection of venture capital firms, technology giants or even the mutual funds who have been flooding the market with cash. Instead, all of that Uber money came from one source: Saudi Arabia’s sovereign wealth fund………………………………………..Full Article: Source

Follow Norway’s Lead Into Infrastructure

Posted on 02 June 2016 by VRS  |  Email |Print

Built from oil and natural gas profits, Norway’s fund is an $850 billion behemoth. It’s said that the Government Pension Fund of Norway owns shares of every stock listed on the planet in some capacity. So when the fund decides to shift its investing strategy and policies, regular Joes may want to take notice. And this time, dividend investors may want to pay really close attention.
Norway has infrastcture on its mind. And why not? Investing in pipelines, toll roads, timberlands and other public pieces of infrastructure has plenty of benefits — especially for those looking for dividends………………………………………..Full Article: Source

1MDB scandal taking toll on Malaysia stock market as foreigners sell

Posted on 31 May 2016 by VRS  |  Email |Print

One of the worst global financial scandals is taking its toll on the world’s longest bull market run. Deepening concerns over 1Malaysia Development Bhd (1MDB), the embattled state investment fund at the center of probes from Switzerland to Singapore, has spurred the biggest outflow of foreign funds in eight months.
Malaysia’s benchmark stock index has erased most of its gains after climbing to this year’s high in April. The prolonged impact of 1MDB is prompting investors to seek out other markets in Southeast Asia, according to Baring Asset Management………………………………………..Full Article: Source

Oil slump blamed for falloff in assets

Posted on 31 May 2016 by VRS  |  Email |Print

The decline in oil prices had a trickle-down effect on money managers that run assets for sovereign wealth funds in 2015. Total assets managed for sovereign wealth funds by money managers in Pensions & Investments’ universe were $1.04 trillion as of Dec. 31, down 13.7% from 12 months earlier.
In fact, every manager among the top 10 ranked by sovereign wealth fund assets under management recorded declines in those assets during 2015. State Street Global Advisors had the most sovereign wealth fund assets under management in 2015, at $103.4 billion, but still saw assets fall 8.8% from 2014. BlackRock (BLK) Inc. (BLK) was second in 2015, with $79.7 billion, down 14.4% from a year earlier………………………………………..Full Article: Source

SOFAZ to increase profitability through long-term investments

Posted on 30 May 2016 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ, which is in charge of accumulating and managing the country’s oil and gas revenues, plans to increase the profitability of asset management in the coming years.
Ziya Kangarli, chief investment advisor at SOFAZ announced about this while addressing the Forum on “Decrease in oil prices and economic reforms: Challenges and Opportunities” held at Khazar University on May 24. Kangarli noted that SOFAZ plans to achieve this goal by increasing the share of long-term instruments in its investment portfolio………………………………………..Full Article: Source

Goldman Sachs’ Malaysian deals dry up in 1MDB fallout

Posted on 26 May 2016 by VRS  |  Email |Print

When Malaysia’s largest sovereign wealth fund asked bankers to pitch for work arranging a US$750 million (S$1 billion) bond sale in December, one big name was conspicuous by its absence - Goldman Sachs Group.
Khazanah Nasional omitted the Wall Street firm from the list of banks invited to bid on that and other bond transactions in the past three years, according to a person familiar with the matter. During that time, Goldman Sachs slid down the Malaysian deal league tables, cold-shouldered by potential clients concerned about negative publicity from its dealings with 1Malaysia Development Berhad (1MDB)………………………………………..Full Article: Source

Angola SWF raised private equity investment, trims debt exposure in 2015

Posted on 20 May 2016 by VRS  |  Email |Print

Angola’s sovereign wealth fund increased the amount of funds earmarked for private equity investments focused on sub-Saharan Africa last year and sharply cut exposure to developed market bonds, the fund’s chairman said on Thursday. The fund had $4.7 billion under management at the end of last year, chairman Jose Filomeno dos Santos said, while audited results posted on its website showed it had $4.88 billion at the end of 2014.
The fund, known by its Portuguese acronym FSDEA, had $2.7 billion or 58 percent of its portfolio allocated for investments in private equity - unlisted securities and debt - in infrastructure, real estate, agriculture, timber, healthcare, mining and mezzanine capital, according to dos Santos………………………………………..Full Article: Source

Sovereign Wealth Funds Investing In Infrastructure

Posted on 20 May 2016 by VRS  |  Email |Print

Using extracts from the 2016 Preqin Sovereign Wealth Fund Review and data from Preqin’s Infrastructure Online, Joe McGee and Selina Sy examine these investors’ plans and preferences concerning infrastructure investments.
Sovereign wealth funds continue to1 capture attention as a result of their ever growing assets under management (AUM) and corresponding influence on global financial markets. Despite market volatility and the ongoing decline in commodity prices, which has reduced the capital available to some sovereign wealth funds, AUM managed by these investors reached $6.51tn in March 2016. This is over double the aggregate assets held in 2008 ($3.07tn), the year Preqin launched its first Sovereign Wealth Fund Review………………………………………..Full Article: Source

Indonesia weighs up introducing sovereign investment vehicle modelled after Singapore’s Temasek

Posted on 19 May 2016 by VRS  |  Email |Print

Southeast Asia’s largest economy with a GDP of US$888.54 billion – is mulling over creating a sovereign investment company modelled after Singapore’s Temasek Holdings (Private) Limited (Temasek), in a bid to drive continuous development in the country, says Finance Minister Bambang Brodjonegoro.
In an interview with Bloomberg, Bambang was quoted as saying that the proposed investment holding company would constitute four or five state-owned entities, which could then buy shares in Indonesian companies. “A super-holding of our state-owned enterprises (SOEs), that could be a very good sovereign wealth fund (SWF) for Indonesia,” he says………………………………………..Full Article: Source

Domestic Focus May Limit Clout of $2 Trillion Saudi Fund

Posted on 18 May 2016 by VRS  |  Email |Print

Saudi Arabia aims to create the world’s biggest sovereign wealth fund, a $2 trillion behemoth that can throw its weight around global markets, but the fund’s growth abroad is likely to be slowed by its responsibility for aiding the economy at home.
Building the Public Investment Fund (PIF) into “the largest fund in the world by far” is a cornerstone of radical economic reforms announced by Deputy Crown Prince Mohammed bin Salman last month to cut the kingdom’s reliance on oil. The PIF, founded in 1971 to finance development projects in Saudi Arabia and until now little known abroad, is to grow from 600 billion riyals ($160 billion) to over 7 trillion riyals, helping make Riyadh a global “investment power”, he said………………………………………..Full Article: Source

Qatar wealth fund ‘to create $100bn unit in revamp’

Posted on 18 May 2016 by VRS  |  Email |Print

Qatar’s sovereign wealth fund is undergoing its biggest overhaul since 2014, grouping $100bn of investments in local companies into a new unit and abandoning the Qatar Holding name synonymous with its highest-profile deals. About $100bn of the Qatar Investment Authority’s stakes in companies such as Qatar Airways and Qatar National Bank will be placed into a new internal division named Qatar Investments, they said.
The fund is seeking to bring greater oversight by having a single person in charge, the sources said. The Qatar Holding name, under which the state gained an international profile after investing in companies ranging from Glencore to Barclays, will now be replaced by the QIA name on international investments, according to the sources………………………………………..Full Article: Source

Who is Dipping Into Their Sovereign Wealth Funds Now Oil is Cheap?

Posted on 17 May 2016 by VRS  |  Email |Print

As many as 44 of the world’s countries have at least one sovereign wealth fund set up for a rainy day, and now it seems that for many of them that day has arrived. Let’s take a look at which of these countries have made use of their piggy banks.
Norway, the owner of the largest of the funds, set up in 1990s to safeguard the country’s oil wealth for future generations, announced in January that it had made its first withdrawal from the country’s sovereign wealth fund while trying to counter the economic slowdown………………………………………..Full Article: Source

Azerbaijan to exploit trade crossroads potential as Iran sanctions ease

Posted on 13 May 2016 by VRS  |  Email |Print

In the wake of the lifting of Iranian sanctions, Azerbaijan is determined to exploit its key location at the crossroads of the East-West silk road from China to Europe and the North-South axis from Iran to Russia.
The strength of Azerbaijan’s State Oil Fund, its sovereign wealth fund, is helping to prop up the country despite its oil-related woes. While its foreign currency assets declined 9.5% from 2014, they still remain at $33.6bn. Moody’s says that fund largely offsets the country’s underlying fiscal vulnerabilities which have stemmed from the government’s reliance on oil………………………………………..Full Article: Source

Dubai Seen Weathering Mideast Slump as IMF Predicts Rapid Growth

Posted on 10 May 2016 by VRS  |  Email |Print

Dubai, the emirate that teetered on the brink of default during the global recession, is weathering the economic slowdown afflicting its oil-rich Gulf neighbors, according to the International Monetary Fund.
The IMF expects the U.A.E.’s economy to expand 2.3 percent this year. The subdued pace is largely due to the projected slowdown in the capital Abu Dhabi, home to 6 percent of global oil reserves and the world’s second-largest sovereign wealth fund………………………………………..Full Article: Source

Nigeria: FG to Reposition Sovereign Wealth Fund

Posted on 09 May 2016 by VRS  |  Email |Print

The federal government has disclosed that it plans to reposition the Sovereign Wealth Fund managed by the Nigeria Sovereign Investment Authority (NSIA). The planned repositioning is in tandem with the infrastructure objectives of the federal government.
The Minister of Finance, Mrs. Kemi Adeosun made the disclosure in a statement issued by her Media Adviser, Mr. Festus Akanbinon. Under the SWF, which had a seed capital of $1.55bn, there are three categories of fund from which investments could be anchored………………………………………..Full Article: Source

Libya wealth fund seeks more detail on Goldman internship before June trial

Posted on 06 May 2016 by VRS  |  Email |Print

Lawyers for Libya’s $67 billion sovereign wealth fund asked Goldman Sachs on Thursday to provide more information about an internship the bank gave to the brother of a key decision-maker at the fund.
In a long-running legal dispute with Goldman Sachs, the Libyan Investment Authority (LIA) alleges the investment bank advised it to invest more than $1 billion in nine derivatives trades in 2008 that it claims were unsuitable and ultimately worthless. The fund requested the details during a pre-court hearing, before a trial scheduled to start on June 13 in London’s High Court, with Judge Vivien Rose presiding………………………………………..Full Article: Source

Norway Wealth Fund Turns Up Climate Heat on Exxon, Chevron

Posted on 04 May 2016 by VRS  |  Email |Print

Norway’s $872-billion sovereign wealth fund, the world’s largest, said it would press U.S. oil majors ExxonMobil and Chevron to do more to report on the risks of climate change. The fund said on Tuesday it would vote in favor of shareholder proposals, opposed by both companies’ boards, which would require them to report more fully about the risks and opportunities of a changing climate.
Royal Dutch Shell and BP adopted similar policies last year, following shareholder pressure, it said. Exxon and Chevron both say they are already doing enough to report on climate risks………………………………………..Full Article: Source

Qatar Investment Authority to cut its focus on Europe

Posted on 04 May 2016 by VRS  |  Email |Print

Qatar’s sovereign wealth fund is reducing its focus on investments in Europe and placing more of its money with external managers following an internal review, sources familiar with the matter told Reuters.
Qatar Investment Authority, estimated by industry tracker Sovereign Wealth Fund Institute to hold $256bn of assets, is known as an aggressive investor in high-profile European assets such as the Shard skyscraper and Harrods department store in London, as well as Credit Suisse and Volkswagen……………………………………….Full Article: Source

Major Gulf Sovereign Fund Retools Fund Manager Strategy

Posted on 03 May 2016 by VRS  |  Email |Print

The oil crisis (for those who produce oil) has shed some light on the practices of Gulf sovereign investors. Sizable fund redemptions by SWFs occurred in 2015. For example, Northern Trust faced major outflows from several sovereign wealth fund clients, between March 2015 and March 2016.
Plain-vanilla mandates are being challenged, can they be effectively replicated by using investment factors? According to SWFI Compass, an RFP and opportunity intelligence tracker, increasingly all types of public investors are asking for specialist mandates in credit, real estate and real assets………………………………………..Full Article: Source

Qatar’s sovereign wealth fund shifts focus to Asia

Posted on 03 May 2016 by VRS  |  Email |Print

Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), is boosting its focus on investments in Asia and the United States, while cutting its allocations in Europe. The QIA, which reportedly holds USD256bn of assets, is now placing more money with external managers focused on Asia and the United States after its internal review showed sharp falls in the prices of some of the European assets it owns strongly suggest that the fund is over committed in Europe.
Sources quoted by Reuters said specific examples for changing strategy were the poor performance of QIA’s investments in German carmaker Volkswagen, where it holds a 17% stake, and London-listed commodities trading house Glencore, where it owns 9%………………………………………..Full Article: Source

Global Growth to Influence Wealth Fund Withdrawals, ADS Says

Posted on 02 May 2016 by VRS  |  Email |Print

Global economic growth will determine whether sovereign wealth funds withdraw further funds from global markets, according to ADS Holding LLC Chairman Mahmood Al Mahmood. Funds are “there to act as a tool for governments when they’re needed,” Al Mahmood, who is also a board member at Abu Dhabi sovereign investment fund Mubadala Development Co., said.
“Is this the end of it? It depends how the economy is whether they’ll continue operating the same way they did in the past.” Sovereign funds from Qatar to the United Arab Emirates and Russia, which amassed about $7 trillion of assets as oil soared higher than $100 a barrel, have been liquidating investments after a more than 70 percent slump in crude since 2014………………………………………..Full Article: Source

Sovereign Wealth Funds Uplift Muslim World with Fajr Capital

Posted on 02 May 2016 by VRS  |  Email |Print

Fajr - Arabic for “dawn,” to symbolize hope - has a modest $700 million in capital, but its founding shareholders have much deeper pockets. Three sovereign wealth funds - the $111 billion Abu Dhabi Investment Council, Brunei Investment Agency, the sovereign fund of the oil-rich Southeast Asian sultanate, and Malaysia’s $35 billion Khazanah Nasional - joined forces with Mohammed Alsubeaei & Sons Investments Co. (MASIC) to create and nurture the young firm.
Fajr is a union of institutions that have high credibility and share the same values, says Ihsan Bafakih, CEO of MASIC. According to a 2015 report published by Spain’s ESADE business school, the 36 sovereign wealth funds based in Muslim countries account for 46 percent of the estimated $7 trillion in global sovereign wealth assets………………………………………..Full Article: Source

Norway’s wealth fund: China growth will not slow down too harshly

Posted on 29 April 2016 by VRS  |  Email |Print

Norway’s $868-billion sovereign wealth fund, the world’s largest, does not expect the Chinese economy to come to an abrupt standstill, a senior official said on Thursday.
“There have been many discussions about the slowdown in growth (in China). There seems to be signs that it will not be too harsh a stop,” the fund’s deputy CEO, Trond Grande, said during a presentation of the fund’s first-quarter results. He added that the fund would remain a long-term investor in China………………………………………..Full Article: Source

Vision 2030: Dawn of a new era

Posted on 29 April 2016 by VRS  |  Email |Print

At first sight, the Saudi Vision 2030 plan, unveiled this week by Deputy Crown Prince Mohammed bin Salman, seems to break with the Kingdom’s evolutionary approach. The implications of a radical realignment of the economy are profound.
The biggest headline change is the part-privatization of Aramco. The money raised will form the basis of the $2 trillion sovereign wealth fund. Other than this, the deputy crown prince’s plan in fact takes forward initiatives that have long been recognized. He has given concrete form to long-held ambitions………………………………………..Full Article: Source

Kazakh Wealth Fund Eyes Tenge Debt, EBRD Loans as Economy Slumps

Posted on 28 April 2016 by VRS  |  Email |Print

Kazakhstan’s sovereign wealth fund is weighing asset sales, loans from the European Bank for Reconstruction and Development and a move into local-currency borrowing as it seeks to reduce its $17.3 billion debt load.
“We expect to gradually optimize our debt, but it’s complicated in the coming 12 months with the weak economy,” Yelena Bakhmutova, the managing director of Samruk-Kazyna, said by phone from the Kazakh capital, Astana. “The biggest challenge for us is the drop in business activity, the pace of gross domestic product growth.”……………………………………….Full Article: Source

Future Fund’s David Neal says low rates hurting growth

Posted on 28 April 2016 by VRS  |  Email |Print

Future Fund chief executive David Neal has warned that a prolonged period of ultra-low interest rates has reduced the probability of the fund achieving its long-term growth targets, while defending the fund’s big move into cash.
Mr Neal said the $117 billion sovereign wealth fund was not hiding under a blanket and still ran a “significantly risky” portfolio in an effort to meet its return target of the consumer price index plus 4.5 per cent………………………………………..Full Article: Source

GIC scoops up buys amid global downturn

Posted on 28 April 2016 by VRS  |  Email |Print

Sovereign wealth funds are having a tough time finding good investments amid the difficult economic environment, and Singapore’s GIC is no different. Stock market volatility and low yields across various other asset classes amid flagging global growth have combined to create a challenging environment for state investors.
But GIC is no stranger to buying when the outlook appears bleak, and its recent investments point to a willingness and ability to ride out short-term volatility with a view to potential long-term payoffs………………………………………..Full Article: Source

Sovereign wealth funds move into real estate amid volatile stock markets

Posted on 28 April 2016 by VRS  |  Email |Print

Real estate is now a prime play for sovereign wealth funds (SWFs) as equity markets remain unpredictable, said an analyst Wednesday. The Sovereign Wealth Fund Institute president Michael Maduell said, “They are looking for long-term investments where they can lock up their capital and not have to continually reinvest that capital.”
The institute analyzes investments by public asset owners such as SWFs and other long-term governmental investors. Vehicles such as pension funds and endowments are also increasing investing in real estate and infrastructure, he told CNBC’s “Squawk Box” on Wednesday………………………………………..Full Article: Source

Ringgit Declines for Fourth Day as 1MDB Default Drags on Stocks

Posted on 27 April 2016 by VRS  |  Email |Print

The ringgit fell for a fourth day in its longest stretch of losses since November and stocks dropped to a six-week low as troubled state investment company 1Malaysia Development Bhd. confirmed it’s in default after missing an interest payment on bonds.
The company is withholding a $50 million payment on $1.75 billion of dollar notes amid a dispute with International Petroleum Investment Co., Abu Dhabi’s sovereign wealth fund that is the co-guarantor of the bonds maturing in 2022, according to an e-mailed statement. The deadline was on Monday………………………………………..Full Article: Source

Saudi Arabia plans $2tn sovereign wealth fund in move away from oil

Posted on 27 April 2016 by VRS  |  Email |Print

Saudi Arabia said it would create the world’s largest wealth fund and sell shares in state energy giant Aramco as it unveiled a vast plan to transform its oil-dependent economy. Prince Mohammed said part of the plan is ”to sell less than five per cent of Aramco” in an initial public offering (IPO), valuing the company at between US$2tn and US$2.5tn.
Part of the funds from the share sale, Mohammed said, will be used to set up a US$2tn sovereign wealth fund (SWF), which would easily surpass Norway’s US$865bn fund as the world’s biggest. SWFs are used commonly as investment arms for oil-dependent nations seeking to diversify revenue streams, and are among the world’s largest institutional investors………………………………………..Full Article: Source

Is Saudi Arabia the next failed state?

Posted on 27 April 2016 by VRS  |  Email |Print

Saudi Arabia has been a hot bed of bad news recently. First, there was their horrifying war in Yemen, then their empty threat to start selling off U.S. debt. Most recently, the 30-year-old Deputy Crown Prince Mohammad bin Salman, who heads the Saudi Council for Economic and Development Affairs (and also serves as defense minister) laid out a new plan, dubbed “Vision 2030,” to transition the country away from selling oil.
While it may sound positive — vision! less oil! — the plan is actually pretty ominous. And without oil, the Saudi state has little else holding it together. The result could be yet another chaotic failed state in the Middle East — and this time in the home of Islam’s holiest sites………………………………………..Full Article: Source

What’s In Saudi Arabia’s Blueprint for Life After Oil?

Posted on 26 April 2016 by VRS  |  Email |Print

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman unveiled his “Saudi Vision 2030” to reduce the kingdom’s reliance on oil. The blueprint, approved by King Salman, includes plans to sell less than 5 percent of Saudi Arabian Oil Co., or Aramco, the creation of the world’s largest sovereign wealth fund and raising non-oil revenue.
Here’s a guide to the main elements of the plan, announced on Monday in Riyadh and during Prince Mohammed’s interview with Saudi-owned Arabiya television. The prince had disclosed some of the proposals in two interviews with Bloomberg News………………………………………..Full Article: Source

Norway boosts withdrawals from sovereign wealth fund

Posted on 26 April 2016 by VRS  |  Email |Print

Norway increased withdrawals from the nation’s wealth fund again in March, running ahead of estimates made by the central bank just two months ago. The government withdrew 7.4 billion kroner ($898 million), according to monthly data published by Norwegian Government Agency for Financial Management. That’s up from 6.7 billion kroner in each of the first two months of the year, bringing the year-to-date withdrawals to 20.8 billion kroner.
At the faster pace, full-year withdrawals would top an estimate of 80 billion kroner given in February by the central bank governor, who oversees the $860 billion fund. The government of western Europe’s biggest crude producer is dipping into its piggy bank to meet budget needs amid plunging oil prices………………………………………..Full Article: Source

“The Government Is Crushing The Piggy Bank” - Norway Boosts Withdrawals From Its Sovereign Wealth Fund

Posted on 26 April 2016 by VRS  |  Email |Print

As it deals with the economic slowdown and a plunge in oil prices, Norway has turned to its massive sovereign wealth fund in order to cover 2016 budget deficits, in continuation of a trend noted here first last October. As Bloomberg reports, the country withdrew $898 million in March from the fund, putting the year-to-date total at roughly $3.1 billion, a run rate that is higher than the estimate the central bank governor gave just this past February.
As a reminder, the Norwegian Sovereign Wealth Fund, the biggest in the world, has been the beneficiary of soaring oil prices in the recent years, pushing its market value to a record high 7.5 trillion Kroner at the end of 2015, or just over $900 billion………………………………………..Full Article: Source

Tomorrow will be better than yesterday

Posted on 25 April 2016 by VRS  |  Email |Print

Today is a historical day for Saudi Arabia. It is a day on which the country is laying the foundation of its long-term plans for the future — its vision of the days to come. It is an important day for us and for our future generations. For decades, we have been talking about and discussing what would happen to the country when the cornerstone of our economy, oil, would no longer generate the largest chunk of our income.
The company’s strategic investment decisions are planned to be part of the country’s overall investment funds, which will be the Kingdom’s primary source of income instead of oil in the years to come. These funds are estimated to be around $2 trillion, the largest Sovereign Wealth Funds in the world. This fund will work on expanding the Saudi foreign investments to be more than 50 percent of the fund’s assets by 2020………………………………………..Full Article: Source

Opaque fund faces default, uncertain future

Posted on 21 April 2016 by VRS  |  Email |Print

Scandal-hit Malaysian government-owned fund 1Malaysia Development Berhad (1MDB) began as Terengganu Investment Authority (TIA) in 2008, a sovereign wealth fund aimed at ensuring economic development for the state of Terengganu. It was renamed 1Malaysia Development Berhad on January 2009 and made a federal sovereign fund in 2009.
The entity focuses on strategic development projects in the areas of energy, real estate, tourism and agribusiness. The 1MDB fund was founded to invest in new industries and attract foreign investment. While little of that investment occurred, the fund rolled up almost $13 billion (Dh47 billion) in debt, a big chunk from dollar-bond issuances, which today it is having trouble repaying………………………………………..Full Article: Source

Russia’s Vulnerable Side Is at Fore in Putin’s Call-In Show

Posted on 15 April 2016 by VRS  |  Email |Print

Russia President Vladimir V. Putin said there was enough money in the two main sovereign wealth funds and other reserves to tide Russia over for the next four years.
That is a far rosier picture than outside analysts have predicted. The World Bank, for example, estimated this month that the economy would contract by 1.9 percent this year and said that about 20 million Russians were now living below the poverty line. There have also been widespread predictions that the main sovereign wealth fund, the Reserve Fund, could run dry by next year………………………………………..Full Article: Source

How the Qatar Investment Authority’s economic strategy affects the Western world?

Posted on 12 April 2016 by VRS  |  Email |Print

As reported in Bloomberg news and other venues, Qatar’s government is looking to get involved in the U.S. in a big way. The country’s sovereign wealth fund, the Qatar Investment Authority, has opened a New York office and is aggressively looking to acquire U.S. assets with $35 billion. At the same time, Qatar and its related investors are also spending money in other places around the world, including China and the European Union.
In the midst of all this, many are asking how these relationships will affect Western nations, which traditionally have pushed for democracy around the world. Will EU nations and the U.S. still be as vocal and up front about human rights problems when they are receiving so much money from Gulf states like Qatar?……………………………………….Full Article: Source

Newton Capital Sees Sovereign Wealth Funds Easing Retrenchment

Posted on 12 April 2016 by VRS  |  Email |Print

Sovereign wealth funds reined in their investments at a slower pace in the first quarter, according to Helena Morrissey, chief executive officer of London-based Newton Capital Management Ltd.
Funds have been liquidating assets and repatriating capital to shore up domestic economies rocked by slumping oil and commodity prices. They pulled “a huge amount” from markets worldwide in late 2015, Morrissey, who helps oversee $69.2 billion, said in a Bloomberg Television interview with Manus Cranny………………………………………..Full Article: Source

The Gulf’s sovereign dilemma

Posted on 11 April 2016 by VRS  |  Email |Print

To withdraw or not to withdraw?” asks American University of Sharjah professor Dr Jorg Bley in a column for Arabian Business (see page 34) about the present state of Gulf sovereign wealth funds (SWFs). The multibillion-dollar funds have enjoyed strong growth in recent years but analysts now warn that growth is slowing as flat oil prices and low liquidity force governments to break into their investment vehicles.
Across the Gulf, evidence abounds of governments drawing down on SWF assets to plug budget deficits or otherwise stabilise national economies. The biggest oil-producing nations are under particular stress while commodity prices remain low — the International Monetary Fund (IMF) estimated that Gulf countries together lost more than $300bn of hydrocarbon revenues last year………………………………………..Full Article: Source

Sovereign Wealth And Pension Funds Eye Bigger Bet On Asia And Alternatives

Posted on 08 April 2016 by VRS  |  Email |Print

Faced with a challenging investment environment, central banks, sovereign wealth funds (SWFs) and government pensions are adapting their investment models to be more agile, according to a new research report by State Street Corporation.
After surveying over 100 central banks, sovereign wealth funds and government pensions globally, State Street says these official institutions are diversifying their portfolios and looking at new asset classes and markets. Despite the weakened outlook for growth in China, Asia remains the most attractive region for investment with 89% of Asia-Pacific institutions and 63% of institutions from other regions planning to increase their investments there………………………………………..Full Article: Source

Qatar Investment Authority coming to America, along with concerns about foreign diplomacy

Posted on 07 April 2016 by VRS  |  Email |Print

Among the sovereign wealth funds that allow nations to make foreign investments in their national interests, the Qatar Investment Authority (QIA), representing the oil-rich Gulf state, is one of the wealthiest. A Carnegie Endowment study showed the QIA amassed assets of $70 billion as of 2010.
This year, the QIA is poised to put $35 million into a set of U.S. investments, including the buyout of a division of American Express and other key investments. The QIA also plans to set up a new office in New York. Qatar officials says they just want to be closer to partners, and they highlight the creation of U.S. jobs………………………………………..Full Article: Source

Norway rejects proposal of investing wealth fund in infrastructure

Posted on 06 April 2016 by VRS  |  Email |Print

Norway’s $850-billion sovereign wealth fund, the world’s largest, should not be allowed to invest in unlisted infrastructure projects, the government said on Tuesday in its annual white paper. The central bank, which manages the fund, had recommended that it should be allowed to invest in infrastructure.
The fund currently invests about 60 percent of its value in stocks, 35 percent in bonds and up to five percent in real estate, all outside Norway. In the future, allocations in real estate could rise to 7 percent, the government said………………………………………..Full Article: Source

Reforms crucial to keeping GCC ratings high: Asiya Investments

Posted on 06 April 2016 by VRS  |  Email |Print

As an example, Kuwait has enough reserves and sovereign wealth fund assets to finance 13.4 years of imports, while Bahrain could only finance over a year. The evolution of oil prices and the capability of institutions to diversify income sources will be the main factors that ratings agencies will take into account in their grading decisions.
A cross-sectional comparison across 37 countries shows that credit ratings explain about 37.5% of 10-year sovereign bonds yield. On average, the sovereign bond yield of any country is 0.4 percentage points higher than the one of a country with an immediately superior credit score. The intuition behind it is that a downgrade will increase the yield in the bond………………………………………..Full Article: Source

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