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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

Korean public funds hesitant to outsource investing to SWF

Posted on 05 April 2016 by VRS  |  Email |Print

Korea Investment Corp. is looking to leverage its expertise as a sovereign wealth fund invested entirely offshore on behalf of other local pension and public funds in the country, but its target audience might not be ready to jump at the offer.
At his inaugural press conference on Feb. 18, Eun Sung-Soo, KIC’s newly installed CEO, said winning mandates from local pension and public funds is part of KIC’s long-term strategy to achieve economies of scale for all involved, noted a Seoul-based KIC spokeswoman………………………………………..Full Article: Source

Petro-dollar crunch hits GCC sovereign wealth funds

Posted on 05 April 2016 by VRS  |  Email |Print

The Gulf Cooperation Council (GCC) countries are facing a major financial crisis if they fail to make changes to their own structures or economies. A continued period of low prices for oil and natural gas will have a detrimental effect on the overall stability of the regional economies. After years of high oil prices, generating vast amounts of revenues being put into sovereign wealth funds (SWFs), the market is oversupplied.
Still, gross domestic growth overall in the region is positive, and inflation remains under control. Total growth of the GGC’s GDP, according to the IMF, is set to decrease to 2.7% in 2016, in comparison to 3.2% in 2015 and 3.4% in 2014………………………………………..Full Article: Source

Sovereign Wealth Descends On China

Posted on 30 March 2016 by VRS  |  Email |Print

Despite economic headwinds, such as a potential for massive job losses in China, foreign public funds continue to want to access thematic institutional investments in Asia’s largest market. Public institutional investors such as sovereign funds have directly invested over US$ 42.97 billion in China (including Hong Kong) from 2013 to the end of 2015, according to SWFI’s Sovereign Wealth Fund Transaction Database.
Sovereign investors such as Singapore’s GIC Private Limited, China Investment Corporation (CIC), Qatar Investment Authority (QIA) and the Kuwait Investment Authority (KIA) actively pursued large-scale opportunities in Chinese real estate and company investments………………………………………..Full Article: Source

Norway’s oil fund increases bet on property markets

Posted on 29 March 2016 by VRS  |  Email |Print

Norwegian sovereign wealth fund aims to invest $41.5bn in global real estate. Norway’s $830bn oil fund plans to double the size of its property team as the world’s largest sovereign wealth fund seeks to improve performance after posting its worst annual return since 2011.
The oil fund has set itself a target of investing $41.5bn in global property markets. If met, the fund would pour another $16bn into real estate this year. To meet that target, the fund plans to increase the number of staff in its property operation from 104 to 200 by 2017, according to its latest annual report………………………………………..Full Article: Source

Lower oil tests sovereign wealth funds

Posted on 23 March 2016 by VRS  |  Email |Print

Bader Al Sa’ad, the head of the Kuwait Investment Authority, isn’t spending much time these days assessing new investments. Instead he is advising his government as it moves to establish a debt management office. Circumstances have changed in the Gulf, bringing in their wake a host of ripple effects. A while ago, the biggest headache for the sovereign wealth funds of the Middle East was finding safe but profitable homes for their portion of swelling oil revenues.
Now, many are fortunate if they do not have to liquidate holdings at the request of their cash strapped governments. Kuwait is among the best managed of the sovereign wealth funds in the Gulf which means it is under less pressure to sell, rather it is simply putting out less new money………………………………………..Full Article: Source

Norwegian National Oil Fund: A sovereign wealth fund to emulate

Posted on 22 March 2016 by VRS  |  Email |Print

Pragmatic economic management of Norway’s oil wealth has ensured that future generations will benefit from the wisdom and incorruptibility of their ancestors. Stavanger is perhaps the epitome of the economic transformation of Norway.
A sleepy fishing town, Stavanger once had good times, a decades-long boom in herring fishing, which ended suddenly with plunging catches after 1870. Like the rest of Norway, the town collapsed, with a huge fleet of wooden sailing ships and an agricultural economy. And in comparison to its industrialising neighbours, Norway was being left behind………………………………………..Full Article: Source

Is There Growing Politicization Of Norway’s Sovereign Fund?

Posted on 18 March 2016 by VRS  |  Email |Print

Norway has been able to amass tremendous financial wealth from petroleum revenue over the past fifteen years. The wealth fund commands attention from policymakers, asset managers and the citizens of Norway. Thus, Norway’s Government Pension Fund Global (GPFG), the ex-Norway part of oil-derived assets, wields significant influence when it comes to corporate governance and investment policy.
For example, allocation to renewable and environmental strategies gained further traction in 2009, amid pressure from Norwegian politicians. During that period, Norway’s sovereign fund awarded mandates to a number of external managers in environmental-related mandates. By 2014, Norges Bank Investment Management (NBIM) established their first portfolio dedicated to green bonds, in which the reference portfolio is based on a sub-segment of the Barclays MSCI Green Bond Indices………………………………………..Full Article: Source

Fine tuning and tweaks keep the world’s biggest ethical investor in clover

Posted on 14 March 2016 by VRS  |  Email |Print

The ethics watchdog for Norway’s €765bn wealth fund will focus this year on identifying corruption in telecoms, arms and energy companies and expects to recommend that an increasing number of firms across all sectors be barred from investment.
By the end of 2016, the fund, which invests income from Norway’s oil and gas production, could add companies to its blacklist for emitting too much climate-changing gas, said the chairman of its independent ethics panel, Johan H Andresen. The ethics panel will also look into allegations of human rights abuses in Qatar’s building sector, Malaysia’s electronics goods industry and textile factories in some Asian countries………………………………………..Full Article: Source

John Brumby, Paul Howes split over super debate

Posted on 14 March 2016 by VRS  |  Email |Print

The debate over the purpose of superannuation launched by the Turnbull government has split senior Labor figures over whether investors’ freedoms or nation building should be paramount. Former Victorian Labor premier John Brumby said Australians should not be given too much choice over their superannuation fund because money ought to be available for nation building.
“The reality is that in super, too much choice can be a bad thing because for super funds to invest in long-term infrastructure like roads and ports and even high-speed rail, you need secure, long-term flows of savings,” he told The Australian Financial Review………………………………………..Full Article: Source

Norway Wealth Fund Isn’t Joining Global Stock Selloff, CEO Says

Posted on 11 March 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund, the world’s biggest, hasn’t been part of a global selloff in stocks this quarter, according to its chief executive officer, Yngve Slyngstad. “We have not been participating in the selling, and we don’t foresee” that a change of strategy will be necessary, Slyngstad said at a presentation of the fund’s 2015 results on Wednesday in Oslo.
The comments follow evidence that wealth funds across the Middle East and central Asia have sold assets to plug deficits amid plunging oil prices. Speculation that petrodollar-stocked wealth funds were exiting assets has fed into market turmoil as stocks sank this quarter. The MSCI World Index is down more than 4 percent since the end of December………………………………………..Full Article: Source

SWFs increasingly looking to ETFs for their core portfolio

Posted on 11 March 2016 by VRS  |  Email |Print

Being intergenerational funds and holding no liabilities make sovereign wealth funds (SWFs) the ultimate in long-term investors. With the luxury of time they have the ability to fully benefit from the illiquidity premium historically inherent in many real, actively managed assets.
However, a sea of change sits on the horizon with SWFs increasingly considering ETFs for their core portfolio exposure. Three business drivers lie behind this trend, including insourcing investment capabilities; an SWF equity market discount, and lower for longer oil prices………………………………………..Full Article: Source

Citi plans to focus on clients like SWFs

Posted on 11 March 2016 by VRS  |  Email |Print

Senior investment bankers Zubaid Ahmad and Brad Coleman will be leading a new group at Citigroup Inc focused on better serving clients that are private equity firms, hedge funds and sovereign wealth funds, according to a memo seen by Reuters on Wednesday.
The new Global Asset Management Group will help boost the investment banking coverage of these alternative asset managers, which will also include pension funds and some family offices. A Citi spokesman confirmed the contents of the memo………………………………………..Full Article: Source

Norway Wealth Fund Keeps Buying as Struggling Petro-States Sell

Posted on 10 March 2016 by VRS  |  Email |Print

Norway will remain a bulwark against global stock declines as its sovereign wealth fund, the world’s biggest, proves to be an odd-ball among oil-built investment vehicles. “There’s been a lot of writing about oil-based sovereign wealth funds selling assets. Well, as a matter of fact, we have actually been net buying assets this year,” Yngve Slyngstad, CEO of the $830 billion fund, said in an interview in Oslo.
And the buying probably won’t stop soon. Unlike wealth funds in the Middle East and central Asia, Norway doesn’t foresee a need to sell assets, even as the government starts withdrawing money from its massive piggy bank to plug budget holes exacerbated by collapsing crude prices………………………………………..Full Article: Source

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