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China’s wealth fund says developed markets drive recovery

Posted on 14 January 2014 by VRS  |  Email |Print

China Investment Corp., the country’s $575 billion sovereign wealth fund, favors European infrastructure and real estate as developed markets will drive the next phase of the global economic recovery.
“Europe has a lot of potential,” CIC Chairman Ding Xuedong said yesterday at a conference in Hong Kong. “It is turning from negative to positive so there should be a lot of investment opportunities.”……………………………………….Full Article: Source

Citi v Abu Dhabi – Will it ever end?

Posted on 14 January 2014 by VRS  |  Email |Print

Two of the largest financial institutions in the world may again be heading back to court as one of the most toughly fought battles since the financial crisis began looks set for another round. On December 23 last year, Citigroup lodged an appeal against a decision that had been handed down on November 26. This decision had gone against the bank, which had appealed against a previous decision to dismiss an earlier claim and compelled arbitration between it and the Abu Dhabi Investment Authority (ADIA).
Citi had lodged the appeal to the United States Courts of Appeals for the Second Circuit, according to publically available documents. There has been no published indication as to whether this appeal has been granted………………………………………..Full Article: Source

The Norwegian miracle : A model for visionary leadership

Posted on 13 January 2014 by VRS  |  Email |Print

Everyone in Norway became a theoretical millionaire on Wednesday in a milestone event for one of the world’s biggest sovereign wealth funds that has ballooned thanks to high oil and gas prices.
A preliminary counter on the website of the central bank, which manages the fund, rose to 5.11 trillion crowns ($828.66 billion), fractionally more than a million times Norway’s most recent official population estimate of 5,096,300. Norway’s $710 billion wealth fund earned 13.4 percent last year. Set up in 1990, the fund owns around 1 percent of the world’s stocks, as well as bonds and real estate from London to Boston, making the Nordic nation an exception when others are struggling under a mountain of debts………………………………Full Article: Source

America is already home to a number of sovereign wealth funds

Posted on 07 January 2014 by VRS  |  Email |Print

America is already home to a number of sovereign wealth funds as well. The purest sovereign wealth fund is the one Alaska runs called the Alaska Permanent Fund. It is like a big endowment for the state, and the returns from it are sent out each year to every Alaskan citizen in the form of a social dividend (which is itself a kind of basic income).
But it is not just Alaska. Every single public employee pension fund in the country is a kind of sovereign wealth fund. The state manages a big fund of money and pays out benefits from it to public employees. In some places, states have failed to put enough money into the funds to match the benefits they have promised, but the funds themselves are generally well-managed and function just fine……………………………………….Full Article: Source

Investment lessons from a sovereign wealth fund

Posted on 06 January 2014 by VRS  |  Email |Print

Singapore’s famous sovereign wealth fund, the Government of Singapore Investment Corporation (GIC Private Ltd) has been charged with the task of managing the island country’s foreign reserves.
With its objective of preserving and enhancing the international purchasing power of the reserves, and the aim of achieving good long-term returns above global inflation over the investment time horizon of 20 years, the sovereign wealth fund is known for its well structured investing mandate and responsible management of the government’s money………………………………………..Full Article: Source

The promise and perils of sovereign wealth funds

Posted on 20 December 2013 by VRS  |  Email |Print

Although sovereign wealth funds (SWFs) have been around for decades, it was not until the subprime mortgage crisis of 2007 that they truly garnered recognition as major players in the investment market. When they did, they were hailed as saviors for injecting billions of dollars into struggling US companies.
With foreign direct investment into the US shrinking, SWFs provide an attractive alternative source of capital. And they are growing. Global SWF assets increased 16% last year, and are currently valued at more than US$6 trillion; roughly equivalent to Japan’s GDP………………………………………..Full Article: Source

Azeri oil fund to lift investments in equities, Asian property

Posted on 17 December 2013 by VRS  |  Email |Print

Azerbaijan’s state oil fund plans to double the proportion of equities in its investment portfolio and buy real estate in Asia next year, the fund’s executive director told Reuters, as it further diversifies its assets.
The $34 billion fund of increasingly wealthy Azerbaijan holds proceeds from oil contracts, oil and gas sales, transit fees and other revenues, and uses investment proceeds to help pay for social spending and infrastructure projects………………………………………..Full Article: Source

Sovereign funds expand in Africa

Posted on 16 December 2013 by VRS  |  Email |Print

Africa may not be home to the world’s largest sovereign wealth funds (SWFs) – those are in the Middle East and Asia – but the continent is becoming an important place for bankers, as several countries create funds to save commodities revenues.
Over the past two years, oil producers Nigeria, Ghana and Angola have established sovereign funds, managing $1bn, $100m and $5bn respectively, opening a new chapter for Africa. Other countries are likely to follow over the next decade, according to Mthuli Ncube, chief economist at the African Development Bank………………………………………..Full Article: Source

Hong Kong listings revival offers sovereign wealth path to China

Posted on 11 December 2013 by VRS  |  Email |Print

Sovereign wealth funds, led by Norway’s $810bn oil fund, are using Hong Kong’s listings revival to achieve a long-held goal of ramping up exposure to China. The Norwegian fund – the world’s biggest pool of sovereign wealth – has emerged as one of the most important investors in Chinese companies this year, in spite of continued trade friction between Oslo and Beijing.
It was one of the main cornerstone investors ahead of the initial public offering of Cinda, the Chinese former bad bank set up to manage distressed debt in the late 1990s………………………………………..Full Article: Source

GIC to Norges Bank raise risk appetite in London

Posted on 10 December 2013 by VRS  |  Email |Print

Investors from Norway to Singapore are bypassing property funds and putting money into London commercial projects with developers, taking more risk in a bid to increase returns as the U.K. market recovers.
Pensions, insurers and sovereign-wealth investors, among the biggest property investors, are teaming up with companies including Great Portland Estates Plc (GPOR) and Land Securities Group Plc (LAND) to develop land in the city’s most desirable areas and buy offices and shopping malls………………………………………..Full Article: Source

The three trends facing Asian SWFs in 2014

Posted on 06 December 2013 by VRS  |  Email |Print

The changing macro environment created by a post-QE world will create three major trends for sovereign wealth funds in Asia. That is according to Pascale Blanqué, chief investment officer with French asset management group Amundi.
Outlining how he expects the market to evolve in the coming year, Blanqué said the move to less accommodative monetary policies will not lead to the stabilisation many investors expect. ‘Normalisation is a false trend. We are seeing a shift from the classic interest rate framework to a larger framework where asset prices will continue to move one way or another,’ he said………………………………………..Full Article: Source

Temasek Holdings has made substantial contributions to benefit Singapore

Posted on 06 December 2013 by VRS  |  Email |Print

Investment company Temasek Holdings has made substantial contributions to benefit Singapore and Singaporeans, said chairman Lim Boon Heng. Lim said the contributions have helped to boost the government’s budget revenue to fund social programmes and kept tax burden light.
The government has rolled out various programmes to support the elderly and the needy. In the past 10 to 15 years, contributions from investment companies like Temasek, the GIC and others have helped to fund the programmes………………………………………..Full Article: Source

Mongolia president Tsakhia Elbegdorj wants to cut state firms by one-third

Posted on 29 November 2013 by VRS  |  Email |Print

The Mongolian government plans to slash the number of state-owned enterprises (SOEs) by one third to encourage private investment and set up a sovereign wealth fund, said Mongolian President Tsakhia Elbegdorj
Mongolia will also enact a law that will discourage companies owned by Mongolian ministers from competing with foreign and private firms, he said. Competition between Mongolian SOEs and private firms is “not good”, Elbegdorj told a Hong Kong Trade Development Council (TDC) luncheon audience that included Hong Kong businessmen………………………………………..Full Article: Source

Norway backs down from talk of splitting $800 bln oil fund

Posted on 20 November 2013 by VRS  |  Email |Print

Norway’s government backed down from pre-election talk it might restructure the nation’s $800 billion sovereign wealth fund as it instead defends the investor’s existing mandate.
“We aim at a predictable and stable investment strategy for the fund,” Siv Jensen, finance minister and leader of the junior partner in Norway’s ruling coalition of Conservative and Progress parties, said today in an interview in her office in Oslo. Asked whether the fund may yet be split, Jensen said “the government has no plans to do that. There will be no changes in the investment profile of the fund.”…………………………………Full Article: Source

To be sovereign in wealth, deed

Posted on 15 November 2013 by VRS  |  Email |Print

A Sovereign Wealth Fund would seem an urgent necessity in the circumstances of this economy presently and for assuring its more secure prospects of development in years and generations to come.
A Sovereign Wealth Fund, as the name suggests is a Fund deliberately established by the State (i.e. the sovereign authority) into which mainly financial resources realised in given economic activities are lodged for purposes of raising investment income for the country’s overall benefit. The sources of the funds should be explicitly defined and likewise the uses for which the fund investment income is put. I return to this issue shortly………………………………………..Full Article: Source

The politics of sovereign wealth

Posted on 13 November 2013 by VRS  |  Email |Print

It is a question that has long been asked in America, particularly after the handling of firms after the 2008 crisis, and most pressingly after 2010’s Citizen’s United Supreme Court ruling: are corporations people? The answer, for innumerable reasons, seems to me to be a resounding no. But that is beside the point, for I believe there is another question that soon must be debated around the world, particularly with the growth of state-owned investment vehicles known as sovereign wealth funds. Corporations are certainly not people – but can states be corporations?
A cash-laden Kuwait created the first national sovereign wealth fund (SWF) in 1953. Kuwait was awash with money from their oil productions, and, seeking to invest rather hold unprofitable bills and bonds, founded the Kuwait Investment Authority. Today, the fund holds assets valued at $386 billion………………………………………..Full Article: Source

Norway’s opposition wants $800 bln wealth fund banned from coal

Posted on 06 November 2013 by VRS  |  Email |Print

Norway’s opposition Labour Party has proposed banning the country’s $800 billion wealth fund from investing in coal producers, a motion that may gain traction as several outside backers of the minority government expressed support.
“We believe that humans are responsible for climate change so we must also see what we can do to reduce emissions,” Labour Party finance spokesman Jonas Gahr Stoere said in a statement………………………………………..Full Article: Source

SOFAZ’s pick cycle expands

Posted on 06 November 2013 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) is at a delayed pick of its assets. The pick cycle of SOFAZ assets can be carefully called “double”. According to the Fund’s statistics, floating assets increased by $1.679 bn in 2013 from $34.129 bn up to $35.809 bn. At that, the circularity to which their growth subjects to has changed over the last 5 months.
Fund’s assets reach their pick in the 1st month of the quarter, harshly go down in the 2nd month and recover somehow in the 3rd month. So, in January (1st month of 1st quarter) SOFAZ current assets amounted to $34.6 bn, in April (1st month of 2nd quarter) $34.725 bn………………………………………..Full Article: Source

World’s biggest wealth fund says record size is posing hurdles

Posted on 04 November 2013 by VRS  |  Email |Print

Norway’s $810 billion sovereign wealth fund, the world’s largest, is finding its record size is becoming a hurdle that’s complicating its investment decisions. “The challenge that we have, and we have already experienced, is the size,” Petter Johnsen, chief investment officer for equities at fund, said today after a speech in Gjoevik, north of Oslo. “The fund has grown very fast during a short time.”
Before taking office after September elections, Prime Minister Erna Solberg said she would consider splitting up Europe’s largest equity investor to help make it more competitive. The fund, also known as the Government Pension Fund Global, has quadrupled in size since 2005 and will grow another 50 percent by 2020, according to government estimates………………………………Full Article: Source

Qatar fund sets sights on impact investment schemes

Posted on 29 October 2013 by VRS  |  Email |Print

Qatar’s $100bln sovereign wealth fund has sought to soften its image as an aggressive acquirer of trophy assets by putting money into so-called impact investment schemes with social or environmental objectives.
The Gulf state has earned a reputation as a trophy hunter in recent years, partly because of its high-profile property investments, including its £1.5bn purchase of London’s Harrods department store in 2010………………………………………..Full Article: Source

Oman shuns hedge funds as sovereign investor targets equities

Posted on 24 October 2013 by VRS  |  Email |Print

Oman, the largest oil producer in the Arabian Peninsula that’s not a member of OPEC, said it’s shunning hedge funds and alternative assets to invest directly in emerging market equities and real estate in stable countries.
Oman Investment Fund, the sovereign wealth fund, manages almost all its assets internally and would only consider external managers because it could be “resource-intensive” to follow hundreds of stocks on a daily basis, Chief Executive Officer Hassan Al Nabhani said in an e-mailed response to questions, his first such interview in at least seven years………………………………………..Full Article: Source

Why a U.S. default could be great for sovereign wealth funds

Posted on 17 October 2013 by VRS  |  Email |Print

Before getting pied by critics, let us consider the possible benefits of a technical default by the U.S. Treasury for institutional investors. As the U.S. Congress reaches the 11th hour on a budget deal, and investors sit idly by waiting for a decision, television pundits and economists in the United States are voicing concerns ranging from the fall of the U.S. dollar’s exclusive global reserve currency status to a full out economic Armageddon.
At the publishing of this article, Congress in a last minute effort approved the debt ceiling, but these concerns will certainly be revisited again………………………………………..Full Article: Source

Korean public investors turn to domestic banks for overseas investment

Posted on 11 October 2013 by VRS  |  Email |Print

The Korea’s National Pension Service (NPS), the world’s third largest public pension, and sovereign wealth fund Korea Investment Corporation (KIC) will commission local financial firms to make investments overseas.
Korea’s sovereign wealth fund decided to offer Korean banks opportunities to handle foreign exchange transactions for its overseas investments. Lee Dong-ik, chief investment officer at the fund, said on October 9, “We have had to turn to foreign banks for cross-currency transactions for a variety of reasons. We are now, however, seriously considering assignment of such services to our domestic banks that have proven competent,” adding, “We could be able to work together within this year.”……………………………………….Full Article: Source

Many SWFs still bound to politics, study finds

Posted on 09 October 2013 by VRS  |  Email |Print

Five years after the signing of the Generally Accepted Principles and Practices (GAPP), only six sovereign wealth funds have been considered compliant, according to a new study. A Swiss political consulting firm GeoEconomica reported that many funds, particularly Russian and Middle Eastern ones, were not meeting basic standards of “good governance, financial disclosure, and accountability.”
The Norwegian Government Pension Fund Global topped the study’s list, with a 94% rating on the 2013 Santiago Compliance Index, while Bahrain’s Future Generations Reserve Fund ranked at the bottom, at 24%………………………………………..Full Article: Source

New Norway gov to steer oil fund to new markets

Posted on 09 October 2013 by VRS  |  Email |Print

Norway’s incoming government has pledged to draw up a new investment strategy for the country’s vast $720bn sovereign wealth fund, increasing its investments in emerging markets, sustainable companies and renewable energy.
“The government will establish a program of investment in the fund…aiming to invest in sustainable companies and projects in developing countries and emerging markets,” the new government wrote in a 70-page political platform document published on Monday………………………………………..Full Article: Source

Global bond markets may need three more years to normalize: NZ wealth fund

Posted on 04 October 2013 by VRS  |  Email |Print

Global equity prices outside Europe are approaching true value but fixed income yields, although rising, could take another three years to reach a “normal” level, the head of New Zealand’s sovereign wealth fund said on Thursday.
Wealth funds need to diversify more to reduce risk, and investments in infrastructure are the biggest opportunity in the market, Adrian Orr, the chief executive of the NZ$23 billion ($19.1 billion) New Zealand Superannuation Fund, told Reuters………………………………………..Full Article: Source

Shifting focus for Middle East sovereign funds, report says

Posted on 02 October 2013 by VRS  |  Email |Print

Sovereign investors in the Middle East are piling increasingly into alternative investments like private equity and hedge funds as they bring more of their asset management expertise in-house, according to a new study.
The report, conducted by NMG Consulting on behalf of the U.S. asset manager Invesco, brought together data from 37 sovereign investors globally, including sovereign wealth funds, pension funds and vehicles that focus on domestic economic development. It found that the Middle East’s sovereign funds had 91% of their money in traditional asset classes………………………………………..Full Article: Source

More sovereign wealth funds planned in Asia

Posted on 30 September 2013 by VRS  |  Email |Print

Governments around the world- most notably in Asia -are planning to set up more investment funds that follow a public-private partnership investment approach, according to research* by Invesco. The new study-the US fund house’s first to focus solely on sovereign institutions, to be released today- also confirms a strong shift by Asian state investors into alternatives.
Although Asian and Middle East sovereigns still allocate less to alternatives than their Western counterparts, the findings suggest they are starting to adopt a more Western approach in terms of their investment models. This is a positive trend for managers specialising in alternatives, notes Desmond Ng, CEO of Greater China at Invesco………………………………………..Full Article: Source

China’s sovereign wealth fund banks on diversified investment approach

Posted on 30 September 2013 by VRS  |  Email |Print

At first glance, the nondescript building in downtown Beijing does not even merit a second look. But very few know that behind the glass facade is the office of China Investment Corp, the country’s sovereign wealth fund that has $575 billion in assets and invests predominantly in overseas markets.
There is no sign of wealth or rich trappings, and the sparsely furnished walls, or the corner office of the chairman and the spartan furniture that dot the premises give the distinct feel and flavor of an ordinary government office in China……………………………………….Full Article: Source

ADIA vs Citigroup – the battle continues…

Posted on 27 September 2013 by VRS  |  Email |Print

The largest Abu Dhabi sovereign wealth fund could be about to haul Citigroup back to court with further claims to recover some of the bank’s bailout, after its prior attempts were thwarted in March.
In a document unsealed in a New York court this week, Citigroup said that a claim filed in August by the Abu Dhabi Investment Authority (ADIA) had made an “assault” on a federal court ruling in March, Reuters reported. The March ruling saw ADIA’s claim—and subsequent appeal—to recover $4 billon of the investment it made in the bank during the crisis refused………………………………………..Full Article: Source

No US-style subprime crisis for China: Former CIC Chair

Posted on 27 September 2013 by VRS  |  Email |Print

While parallels have been drawn between China’s inflated housing market and the U.S. housing bubble that triggered the 2007-2008 global financial crisis, the world’s second-largest economy is unlikely to face similar subprime problems, according to former chairman of the board of supervisors of China Investment Corp (CIC) – the country’s sovereign wealth fund.
“You can’t generalize about a housing bubble in China. In tier-one cities there’s strong demand, in second and third-tier cities there may be some bubbles. But as long as we handle it carefully, it’s not the same as the U.S.,” Liqun Jin said……………………………………….Full Article: Source

SWFs see new alternative investment opportunities in Europe

Posted on 27 September 2013 by VRS  |  Email |Print

Jeffrey Jaensubhakij, managing director and president of GIC Asset Management, an arm of Singapore’s more than $100 billion sovereign wealth fund, said Europe will offer “considerable opportunities” as banks there deleverage. Evidence over the past year that eurozone policymakers will do whatever is necessary to maintain the trade bloc should give investors more confidence to pursue those opportunities, he said.
Roslyn Zhang, managing director, fixed-income and absolute-return investments with the $575.2 billion China Investment Corp., Beijing, pointed to hedge funds focused on Europe as a segment that looks especially attractive over the next few years. Explaining the CIC’s approach to its hedge fund portfolio, Ms. Zhang said while the CIC is a long-term investor, that doesn’t mean its allocations are “frozen money.”……………………………………….Full Article: Source

Wealth funds set high prices amid fears of collateral drought

Posted on 23 September 2013 by VRS  |  Email |Print

Sovereign wealth funds will need considerable incentives to fill any gap that occurs in the supply of high-end collateral as a result of tougher derivatives trading regulations.
The Bank for International Settlements predicts global demand for high-quality collateral will hit $4 trillion this year as stricter derivatives trading regulations take hold, sparking widespread concern over shortages…………………………………..Full Article: Source

To be, or not to be? – Norway’s regional involvement

Posted on 23 September 2013 by VRS  |  Email |Print

Norway, home to roughly 5 million people, is often thought to be isolated from the European Union. As a colleague said to me as I sat reading about the recent Norwegian elections, “Why bother? Norway will never join the EU, with their oil they don’t need to bother with the rest of us.” This casual remark, while bearing no ill will, is disappointing. For, in truth, the Kingdom of Norway is quite involved.
The Government Pension Fund Global, known as simply the Oil Fund is most likely, at a current value of 760 billion US dollars, the largest sovereign wealth fund in existence. Estimated to grow to over 1.1 trillion US dollars by 2020, the fund owns approximately 1% of world’s stocks, and 2.5 % of European publicly listed companies. The Norwegian Finance Ministry are the owners, while it is run by the Central Bank…………………………………..Full Article: Source

East Timor hungry for investors

Posted on 23 September 2013 by VRS  |  Email |Print

A Southeast Asian country quite off the radar of the international community is East Timor. On Aug 14, 2013 it announced that its sovereign wealth fund – the Timor-Leste Petroleum Fund – had reached a value of US$13.6 billion (RM40.8 bil) surpassing the oil fund’s value of both Bahrain and Oman.
This is an amazing amount for an almost forgotten country of just 1.2 million people where around 40% still live below the poverty line of US$1.25 (RM3.75) a day. The fund alone could, straight away, grant every citizen more than US$11,300 (RM33,900) as a one-time payment from the oil wealth…………………………………..Full Article: Source

Sovereign wealth funds: In the shadows of the shadows

Posted on 20 September 2013 by VRS  |  Email |Print

For many years, the global fund manager has had four names on the must-see list when he visits the Gulf: the Abu Dhabi Investment Authority, the Kuwait Investment Authority, the Saudi Arabian Monetary Agency and, more recently, and with an increasing sense of futility, the Qatar Investment Authority. But lately, a second tier of state-backed institutional wealth has started to emerge.
These entities are not necessarily any easier to pitch for mandates, but at least it makes for a little variety. This trend has been under way for years in Abu Dhabi, which has long bewildered the outsider trying to understand the delineation between its many sovereign entities………………………………………..Full Article: Source

Norway’s sovereign fund increases tech stock holdings

Posted on 19 September 2013 by VRS  |  Email |Print

In a pair of recent SEC filings, Norges Bank Investment Management (NBIM), the institutional investor in charge of Norway’s sovereign wealth fund, has significantly increased ownership in two technology companies: Itron Inc. and GT Advanced Technologies Inc.
According to an amended 13G filing made on September 12th, 2013, Norges Bank upped its stake in Itron Inc. to 1,956,728 shares, representing a nearly one million share increase according to a second quarter filing. The aggregate value of the shares totaled US$ 37,683,000 in June of 2013 and nearly US$ 76,980,000 on the date of the purchase on September 11th, 2013……………………………………….Full Article: Source

Norway’s pension fund on impact of HFT

Posted on 18 September 2013 by VRS  |  Email |Print

High frequency trading is becoming a controversial topic as exchange glitches and market mishaps become more and more frequent, as such it is worth paying attention when Norway’s nearly $800 billion sovereign wealth fund discusses the pros and cons of the issue.
Norges Bank Investment Management, the division responsible for overseeing the pension fund, recently released a paper detailing how a large, long-term investor such as itself is affected by the evolution of markets and the rise of high frequency trading………………………………………..Full Article: Source

Real sector on the upbeat as reform pace accelerates

Posted on 17 September 2013 by VRS  |  Email |Print

The Nigerian economy, hobbled for years by state inefficiency, is beginning to connect with the real sector as the pace of reforms in diverse areas accelerates. Reforms in agriculture, banking and power and the establishment of a sovereign wealth fund (SWF) are beginning to impact the real economy.
Nigeria’s Sovereign Wealth Fund, with seed capital of $1 billion, has also begun to impact the real economy with plans to invest in infrastructure. The board of the SWF has decided on the first infrastructure investment, according to Finance Minister Ngozi-Okonjo Iweala………………………………………..Full Article: Source

Oil fund on troubled waters in Norway

Posted on 30 August 2013 by VRS  |  Email |Print

Three-quarters of a trillion dollars is enough to burn a hole in anybody’s pocket. And so it is proving in Norway where ahead of parliamentary elections on September 9 proposals are stacking up to reform the country’s $750bn oil fund, the largest sovereign wealth fund in the world.
Many of the suggestions on the face of it are sensible. But taken together they risk upsetting the delicate balance that has allowed the Norwegian fund to quadruple in size since 2005 and become one of the world’s most influential investors………………………………………..Full Article: Source

Barclays’s Azar sees Middle East M&A driven by SWFs

Posted on 29 August 2013 by VRS  |  Email |Print

Middle East mergers and acquisitions, at a six-year high, will be driven by sovereign wealth funds and regional transactions amid an economic recovery in the Persian Gulf, according to a Barclays Plc (BARC) executive.
“M&A is back. Money is cheap and companies are feeling better about growth through acquisitions,” Makram Azar, vice chairman of investment banking, said in an interview yesterday. “There are two types of M&A happening in this region - sovereigns looking at acquisitions abroad to diversify and regional consolidation.”……………………………………….Full Article: Source

Norway’s opposition mulls SWF infrastructure investment abroad

Posted on 29 August 2013 by VRS  |  Email |Print

The world’s largest sovereign wealth fund, Norway’s $740-billion oil fund, might be allowed to invest in foreign infrastructure projects in the future, two opposition parties seen as front runners to form the next government said.
Currently Norway’s oil fund can invest only in equities, bonds and property. Some think tanks and non-governmental organisations have argued that it should also be able to invest in infrastructure and private equity as they fit the fund’s profile as a long-term investor………………………………………..Full Article: Source

New way for Norway’s investments

Posted on 26 August 2013 by VRS  |  Email |Print

The Norwegian government should establish a new fund, the Government Pension Fund – Growth, to invest in developing countries, resulting in the dual benefits of jobs creation and investment returns for the fund, recommends a report by Re-define, commissioned by Norwegian Church Aid.
The NCA, which is a member of the humanitarian alliance, Act Alliance, believes that the $760 billion sovereign wealth fund’s unique long-horizon positions it for investment in developing countries, and could go some way to providing capital for job creation………………………………………..Full Article: Source

Norway PM plans lower oil money use

Posted on 26 August 2013 by VRS  |  Email |Print

Prime Minister Jens Stoltenberg plans to use less oil money in 2014, NOK 50 billion below the maximum four per cent rule. “As the figures now stand, we’ll be preparing to use barely three per cent of the Government Pension Fund next year,” he told business daily Dagens Næringsliv.
“Next year’s oil spending will be on par with the lowest ever recorded.” The Prime Minister added he believes spending the highest possible amount next year could create problems for the Norwegian economy “at a time we’re concerned about high cost growth, the exchange rate, and the rate of interest.”……………………………………….Full Article: Source

New Mexico has the money; Can it spend it correctly?

Posted on 23 August 2013 by VRS  |  Email |Print

New Mexico has America’s third-largest sovereign wealth fund, according to the Sovereign Wealth Fund Institute, an organization that monitors these government managed investment funds. Coming in at slightly more than $17 billion in size, it’s also the 31st largest such fund in the world. The Institute also ranks fund managers on how much integrity and transparency they exhibit in their fiduciary duties; New Mexico actually scores pretty high in this category as well.
That’s the good news. The bad news is the New Mexico Permanent Fund can only be used to invest in public education. But what if there was an opportunity to take a one-time piece of the fund, say 15 percent of the principle, and apply it over a four- to five-year New Mexico budget cycle, with some additional changes in the gross receipts tax, and then cut all New Mexico income taxes to zero, and do so on a permanent, sustaining basis?……………………………………….Full Article: Source

Public funds take control of assets, dodging Wall Street

Posted on 19 August 2013 by VRS  |  Email |Print

Investors responsible for more than $2 trillion recently gathered at a resort in the Canadian Rockies, far from the news media and, more important, far from Wall Street. Those in attendance, including leaders of Abu Dhabi’s sovereign wealth fund and France’s pension system, were there to consider ways to put their money to work together without paying fees to private equity firms and hedge funds.
Over that weekend, three of the attendees completed the details of a $300 million investment in a clean-energy company………………………………………..Full Article: Source

Capital markets bankers reinvent themselves to schmooze SWFs

Posted on 16 August 2013 by VRS  |  Email |Print

How can you boost your employability if you’re an investment banker working in a region where deals are in the doldrums? The answer, for some, is to start schmoozing with sovereign wealth funds. Michael Bevan, who headed up the equity capital markets operations of HSBC in the Middle East, is relocating to Hong Kong to focus on building relationships with sovereign wealth funds in Asia. He follows Evans Hajitouma, head of ECM for CEEMEA at HSBC who moved to London to head up the bank’s sovereign wealth fund coverage division late last year.
Then there’s Umair Naqvi, who left his role as an executive director in Morgan Stanley’s equity capital markets team to head up Wells Fargo’s SWF coverage. Bank of America is also building its investment banking team in the Middle East in an attempt to garner more business from the region’s SWFs………………………………………..Full Article: Source

SWF newcomers ignoring transparency concerns

Posted on 15 August 2013 by VRS  |  Email |Print

Most of the new entrants into the sovereign wealth fund (SWF) sector have ranked poorly on the International Forum of Sovereign Wealth Funds’ transparency rankings, scoring 30 out of a possible 100 or less. A report compiled by the Peterson Institute for International Economics, said the overall number of SWFs scoring 30 or less had increased since 2009, driven by the new entrants.
“We could find essentially no reliable public information on these funds, which was not unexpected, but we wanted to include them because they are members of the IFSWF and, in principle, adhere to the Santiago Principles,” the report said………………………………………..Full Article: Source

Azerbaijan’s sovereign wealth fund changes approach, keeps poetry

Posted on 15 August 2013 by VRS  |  Email |Print

I read a lot of annual reports for pensions, sovereign funds, and institutional investors of many sorts. It may not be glamorous work, but I have to admit that sifting through hundreds of pages of reporting on pensions is actually worth my while.
Over the years, I’ve learned that almost every single Giant in the world is doing something - even if it’s just one thing - that is utterly unique. And that means that every fund has something to teach us; all that is required on my part is the time to figure out what the one thing is that a fund is doing differently and then focus in on it so I can better understand why it’s doing it………………………………………..Full Article: Source

SWFs will find India interesting for long term: Mark Matthews, Bank Julius Baer

Posted on 15 August 2013 by VRS  |  Email |Print

I do think India’s great appeal is because of the fact that it is a non-commodity emerging market and most of the sovereign wealth companies are commodities related and they want to invest in non-commodities countries with a lot of growth. So I do think that in the longer term India does look interesting for the sovereign wealth companies.
The key trends in India are the trade deficit, the current account deficit and the rupee. Of course they are all interlinked and the fact that the deficit remains at about $12 billion per month is what puts pressure on the currency. I do not see what the RBI can do………………………………………..Full Article: Source

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