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Sovereign Wealth Funds Briefing - Archive | August, 2008

Why would an SWF still be interested in the financial sector?

Posted on 21 August 2008 by admin  |  Email |Print

From Why would a sovereign wealth fund that poured $5 billion into Merrill Lynch eight months ago want to invest even more money after seeing Merrill’s shares fall by more than half?… Full article: Source

The Economist on Saudi foreign investment in farmland

Posted on 21 August 2008 by admin  |  Email |Print

From While Saudi Arabia sets up its first sovereign wealth fund, ordinary Saudis are more preoccupied with the rising price of food. This is prompting the Saudi government to consider a new direction for foreign investment: buying farms in the poorer parts of the world… Full article: Source

Federal Reserve Board discussion paper on SWF investment, transparency and passivity

Posted on 20 August 2008 by admin  |  Email |Print

The Federal Reserve Board has published a discussion paper (also available as a PDF) on SWF investment, transparency and passivity. The abstract states that, “Overall, our findings suggest that SWF investments convey a positive signal to market participants about the target firm, increased SWF transparency is enjoyed by both the SWF and existing shareholders, and SWFs are passive investors.” Full discussion paper: Source

IPIC and ADNOC to team up for infrastructure investment

Posted on 20 August 2008 by admin  |  Email |Print

From [Abu Dhabi’s] International Petroleum Investment Company is planning a major investment in Abu Dhabi’s oil and gas infrastructure in partnership with the Abu Dhabi National Oil Company (Adnoc), a senior Ipic official said yesterday… Full article: Source

Second sovereign wealth fund proposed for Brazil

Posted on 20 August 2008 by admin  |  Email |Print

From Edison Lobao, Brazil’s energy minister, has suggested the creation of a sovereign wealth fund to invest earnings from the oil that the country recently found offshore… Full article: Source

ADIC to target Japan, US, Europe

Posted on 20 August 2008 by admin  |  Email |Print

From Abu Dhabi Investment Council [ADIC], a $200 billion to $300 billion sovereign wealth fund established in the capital of the United Arab Emirates, will expand its investment mandate to include Japan, the United States and Europe, according to a media report [in the Nikkei newspaper] Wednesday… Full article: Source

Merrill Lynch CEO to meet Korea Investment Corp. chief

Posted on 20 August 2008 by admin  |  Email |Print

From Merrill Lynch & Co. chief John Thain will have meetings with South Korea’s sovereign wealth fund [Korea Investment Corp. (KIC)] and key government officials during a visit to the country in the third week of September, Korean officials said Wednesday… Full article: Source

Germany backs law to protect firms from foreigners

Posted on 20 August 2008 by admin  |  Email |Print

From Germany’s cabinet agreed on Wednesday to bring in rules to protect domestic firms from foreign buyers, notably sovereign wealth funds (SWFs), who could exert political influence, a German government official said… Full article: Source

Lehman made failed attempt to secure $5bln from South Korea

Posted on 20 August 2008 by admin  |  Email |Print

From Lehman Brothers’ embattled Chief Executive Dick Fuld nearly struck a deal to raise almost $5 billion from South Korean wealth funds and institutions but the pact disintegrated, according to sources familiar with the matter… Full article: Source

Deputy finance minister: Russia will not dump Fannie, Freddie debt

Posted on 20 August 2008 by admin  |  Email |Print

From Russia is not planning to raise its exposure to debt issued by U.S. agencies Fannie Mae and Freddie Mac, but will not cut it rapidly, Russia’s deputy finance minister [Dmitry Pankin] said on Wednesday… Full article: Source

Russian National Wealth Fund to exceed $100bln

Posted on 20 August 2008 by admin  |  Email |Print

From Russia’s National Wealth Fund is expected to amount to over $100bn by the end of 2008, Deputy Finance Minister Dmitry Pankin told a press conference in Moscow today... Full article: Source

Related article: From Russia has filled up its Reserve Fund for this year, and further cash from high oil prices will go to its National Wealth Fund, which is earmarked for riskier investments, its deputy finance minister said on Wednesday… Full article: Source

ICD chief: Transparency remains key to Dubai`s growth

Posted on 19 August 2008 by admin  |  Email |Print

From Highest levels of corporate governance and transparency will remain the key to Dubai’s ongoing growth and future prosperity, Mohammed Ibrahim Al Shaibani, Board member and Chief Executive Officer of the Investment Corporation of Dubai (ICD), the investment arm of Dubai government, said on Monday… Full article: Source

China CNPC, Sinopec in joint bid for Peru`s Petro-Tech

Posted on 19 August 2008 by admin  |  Email |Print

From China’s CNPC and Sinopec Group have put in a rare joint bid of between $1.5 billion and $2.5 billion for Petro-Tech Peruana, a private firm with oil and gas assets in Peru, a Beijing-based industry official said on Tuesday.

…Increasingly, there is more coordination among Beijing’s oil trio – CNPC, Sinopec and offshore specialist CNOOC Ltd – to avoid clashes in competing for the same targets… Full article: Source

Rogoff: SWFs failed to take into account financial system bloat

Posted on 19 August 2008 by admin  |  Email |Print

From Former IMF chief economist Kenneth Rogoff said at a conference in Singapore that, “There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they’re great buys, sovereign wealth funds come in and make a lot of money by buying them. That view neglects the point that the financial system has become very bloated in size and needed to shrink.”… Full article: Source

China`s excess liquidity trap

Posted on 19 August 2008 by admin  |  Email |Print

From China has begun to employ its huge foreign exchange reserves for broad-based long-term development, not just as hedge against possible future balance of payments problems… Full article: Source

Germany acts to halt the `giant locusts`

Posted on 19 August 2008 by admin  |  Email |Print

From Germany’s cabinet is expected to approve a far-reaching new law this week to stop ‘giant locust funds’ from Russia, China and the Middle East from launching takeover raids on the country’s prized industries.

The article adds that, “Stephen Jen, currency chief at Morgan Stanley, said Britain’s open-door policy means that the City would be the chief beneficiary of the German plan. ‘The funds can use operations listed in London,’ he said.”… Full article: Source

Kuwait signed $27bln of deals in Asian tour

Posted on 18 August 2008 by admin  |  Email |Print

From Reuters UK: Kuwait signed more than $27 billion of investment agreements with nine Asian countries, including Brunei and the Philippines, during an Asian tour this month, its finance minister [Mustapha al-Shamali] said in remarks published on Sunday.”

The article adds that KUNA cited Shamali as saying on Saturday that the Kuwait Investment Authority [KIA] will be part of a delegation that will visit Cambodia, Laos and Myanmar this month to look at potential investments in agriculture and industry… Full article: Source

Fund managers eye SWFs` massive fortunes

Posted on 18 August 2008 by admin  |  Email |Print

From Larger fund managers are hopeful they will be the beneficiaries as the scale of the SWFs limits their ability to spend governance resources on investigating smaller boutiques… Full article: Source

Russian billionaire Lebedev warns Germany against investments by SWFs

Posted on 18 August 2008 by admin  |  Email |Print

From Russian billionaire Alexander Lebedev, who is seeking to buy tour operator Oeger Tours, has warned Germany against investments by Russian sovereign wealth funds because of corruption he says exists in the country’s bureaucracy. In an interview with Welt am Sonntag, Lebedev also expressed sympathy with the German government’s aim to control investments by sovereign wealth funds in industries that affect its national security… Full article: Source

SWFs as potential newspaper purchasers

Posted on 18 August 2008 by admin  |  Email |Print

From Alan D. Mutter’s Blog: With a growing number of newspapers on the market at a time they most likely will fetch historically low prices, somebody is going to start buying some of them. But don’t count on the usual suspects. Start thinking, instead, about such unconventional potential purchasers as the multibillion-dollar investment funds created by countries like Singapore or the sheikhdoms of the United Arab Emirates… Full article: Source

Reserve Bank of India not keen to manage SWF

Posted on 18 August 2008 by admin  |  Email |Print

From The Reserve Bank of India (RBI) is not keen on managing a sovereign wealth fund (SWF) and is in favour of setting up a dedicated autonomous entity to administer such a fund when it is set up… Full article: Source

Qatar and Indonesia in $1bln deal

Posted on 17 August 2008 by admin  |  Email |Print

From Qatar has signed a memorandum of understanding with the Indonesian government to float a joint investment company with a capital of $1bn in Indonesia.

The article adds that the Qatar Investment Authority (QIA) will contribute 85 percent of the funds for the company, with the Indonesian government contributing the rest… Full article: Source

GCC sovereign wealth and Islamic finance

Posted on 16 August 2008 by admin  |  Email |Print

From Developing Islamic banks is a key part of the goals of all GCC governments to promote domestic financial centers… GCC governments now may be stepping in in a new way, as consumers of Islamic financing… Full article: Source

Middle East investment in Brazil attracting attention

Posted on 15 August 2008 by admin  |  Email |Print

From Brazil is attracting the attention of a number of leading Arab property investors and developers according to finance experts. Even though the share of Arab capital is still small compared with the total volume of foreign funds currently flowing into the Brazilian market, there is growing interest… Full article: Source

SWFs seek entry into Indian stock market

Posted on 15 August 2008 by admin  |  Email |Print

From A growing number of sovereign wealth funds (SWFs) have sought the approval of SEBI to register and invest in the Indian stock market… Full article: Source

China`s top three oil giants fight for Angola

Posted on 15 August 2008 by admin  |  Email |Print

From China’s top three oil giants [Sinopec, CNOOC and CNPC] are competing for a 20% Angolan oil field stake being sold by US energy company Marathon Oil Corp with the goal of increasing their overseas oil output… Full article: Source

Chinese investments in Peru could reach $1bln in 2009

Posted on 15 August 2008 by admin  |  Email |Print

From The Peruvian-Chinese Chamber of Commerce (Capechi) estimated today that Chinese investments in Peru might reach $1 billion during the next year due to the launch of new companies and the promotion of investment opportunities during international events… Full article: Source

SWF investment in Ireland

Posted on 14 August 2008 by admin  |  Email |Print

From Apart from a small number of investments in Irish listed firms, it wasn’t until last week that we experienced a first for private Irish business – the €200m investment in Jurys Inns by the oil-rich state of Oman [via the Oman Investment Fund].

…Outside of the relatively small-beer deals we have seen so far, though, Ireland’s attractiveness to sovereign funds seems limited despite the openness of our economy to foreign investment… Full article: Source

`The closer you look, the harder it is to generalize about sovereign funds`

Posted on 14 August 2008 by admin  |  Email |Print

From Brad Setser’s Blog: Some are unleveraged and focus on returns, in much the same way a typical pension funds. Some are leveraged. Some have a mandate that extends beyond financial returns, looking more like industrial policy vehicles than a typical pension fund. And some don’t disclose enough for anyone to know what they really do… Full article: Source

Edwin M. Truman on SWF myths

Posted on 14 August 2008 by admin  |  Email |Print

From Edwin M. Truman of the Petersen Institute discusses what he sees as four popular myths about sovereign wealth funds… Full article: Source

State Street`s Nugee: SWFs should exercise their rights

Posted on 13 August 2008 by admin  |  Email |Print

From Sovereign wealth funds risk keeping poor management in place in the firms they invest in if they give up their shareholder rights in response to fears about their excessive influence, a senior State Street official said. John Nugee, who heads State Street Global Advisors’ Official Institutions Group, [told Reuters on Tuesday that] stateـ-owned funds had shied away from active corporate governance after stirring fears in certain countries… Full article: Source

SWFs move into commodities

Posted on 13 August 2008 by admin  |  Email |Print

From Sovereign wealth funds, the massive investment pools run by foreign governments, are now among the biggest speculators in the trading of oil and other vital goods like corn and cotton in the United States, according to interviews with brokers who handle their investments at leading Wall Street banks, veteran traders and congressional investigators… Full article: Source

India to track sovereign wealth fund investments

Posted on 13 August 2008 by admin  |  Email |Print

From Sovereign wealth funds (SWFs) are back on the Centre’s agenda. The high-level coordination committee on financial markets has decided that the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) would now collect and analyse data on SWF investments through the FDI and FII routes, and share it with the [Indian] government… Full article: Source

QIA walks away from Four Seasons

Posted on 12 August 2008 by admin  |  Email |Print

From Sovereign wealth fund Qatar Investment Authority has written off its equity stake in struggling UK care home group Four Seasons after protracted talks with its creditors including Royal Bank of Scotland, according to a source close to the company… Full article: Source

Reuters Factbox on Japan’s foreign reserves and reserves management

Posted on 12 August 2008 by admin  |  Email |Print

From Thomson Reuters has published a Factbox on Japan’s foreign exchange reserves and its management policy… Full article: Source

Apax to sell 10% stake to Australian and Singaporean SWFs

Posted on 12 August 2008 by admin  |  Email |Print

From NYtimes Dealbook: Apax Partners, the British buyout giant, is pursuing a sale of 10 percent of itself to Australian and Singaporean sovereign wealth funds and a Japanese investor, The Times of London reported citing unnamed sources.

A deal, which would see the Australian Government Future Fund, the Government of Singapore Investment Corporation and an unnamed Japanese firm invest hundreds of millions of euros in Apax, could be reached within days, the paper said… Full article: Source

Chinese state firms battling distrust abroad

Posted on 12 August 2008 by admin  |  Email |Print

From An alliance formed by five Chinese state-owned firms failed to win a long-expected deep-water port construction contract in Austrialia recently. Market observers said the latest failure echoed several previous attempts by Chinese firms to secure buyouts and projects abroad. It also highlighted the distrust facing companies affiliated to the Chinese government, which was eyed suspiciously by foreign ones… Full article: Source

Gulf governments increase grip on Islamic finance

Posted on 12 August 2008 by admin  |  Email |Print

From Gulf Arab governments may take bigger stakes in Islamic financial companies to gain more control over the industry as demand soars for investments and financial services complying with Islamic law during an oil boom, Moody’s Investors Service said on Tuesday… Full article: Source

Saudi investments abroad valued at SR1.4 trillion

Posted on 11 August 2008 by admin  |  Email |Print

From Saudi governmental foreign investments abroad have risen by 49.9% to reach SR1.4 trillion by end of June 2008, compared to SR875.2bn for the same period last year… Full article: Source

Japan may opt for cut in FX reserves over wealth fund

Posted on 11 August 2008 by admin  |  Email |Print

From Reuters UK: Japan’s foreign reserve reforms will probably stay in limbo until financial markets calm down and then bureaucrats may choose to trim the reserves gradually rather than shift them into a sovereign wealth fund.”… Full article: Source

Barker-Homek: Taqa targets investments worth $60bn by 2012

Posted on 09 August 2008 by admin  |  Email |Print

From Abu Dhabi National Energy Co (Taqa) plans investments worth $60bn by 2012, a top company executive has said.
‘We aim to attract $60bn of investments by 2012, which means growth of 25% each year,’ Taqa’s chief executive officer, Peter Barker-Homek told a conference call.”

In a post on Thursday, Brad Setser suggested that Taqa may now perhaps be considered a sovereign wealth fund. And he quotes Wayne Arnold as writing in The National in July that, “There are at least eight Government-owned or Government-controlled institutions now investing sovereign funds on behalf of Abu Dhabi… Full article: Source

ADIA eyes stake in Daimler

Posted on 09 August 2008 by admin  |  Email |Print

From Abu Dhabi Investment Authority (ADIA), the world’s largest sovereign wealth fund which has bought into Citigroup, is interested in buying a large stake in Daimler, the German Focus magazine reported… Full article: Source

Korea Investment Corp. reports 7.4% stake in Merrill Lynch

Posted on 08 August 2008 by admin  |  Email |Print

From Korea Investment Corp., the sovereign wealth fund of South Korea, on Thursday reported a 7.4% passive stake in Merrill Lynch & Co… Full article: Source

Malaysia’s Khazanah to invest $150m in China

Posted on 08 August 2008 by admin  |  Email |Print

From Malaysia’s state investment arm Khazanah Nasional Bhd will invest up to $150 million over the next three years in a China joint venture in at least eight waste-to-energy projects, the company said on Friday… Full article: Source

China Investment Corp. looks to London PR firms

Posted on 08 August 2008 by admin  |  Email |Print

From The world’s fourth largest sovereign wealth fund [China Investment Corporation (CIC)], with assets of more than £100bn, is trawling for London [public relations] agency support… Full article: Source

IIF’s George Abed on the context in which SWFs operate, their diversity and their impact

Posted on 07 August 2008 by admin  |  Email |Print

From George T. Abed, special advisor to the Institute of International Finance (IIF) managing director, and director of the IIF’s Africa and Middle East department, in the Financial Times that, “Unless one has spent the past year on Mars, one cannot have escaped the debate on sovereign wealth funds. SWFs have been criticised, defended, feared, welcomed, studied – but never ignored. Often the debate has cast more heat than light. Three aspects in particular merit clarification: the context in which SWFs operate, their diversity, and their market impact… Full article: Source

Istithmar and Nakheel buy slice of Cirque du Soleil

Posted on 07 August 2008 by admin  |  Email |Print

From AFP/ Cirque du Soleil sold a 20-percent stake in its entertainment dynasty Wednesday to two Dubai firms to fuel its worldwide explosion, starting with a new permanent show in the Middle East. Istithmar World, the investment arm of Dubai World, and real estate developer Nakheel paid an undisclosed sum for a 10 percent share each in the circus company, they announced… Full article: Source

Dubai planning Informa bid team

Posted on 07 August 2008 by admin  |  Email |Print

From Dubai World Trade Centre (DWTC), the Middle East events organiser backed by the Kingdom of Dubai, has held talks with Providence and Carlyle about participating in their £3bn buyout of Informa… Full article: Source

Taqa to invest $1.46bln to boost North Sea output

Posted on 07 August 2008 by admin  |  Email |Print

From Abu Dhabi National Energy Co (Taqa) will invest 750 million pounds sterling ($1.46 billion) over three years to boost oil output from North Sea operations, it said on Thursday… Full article: Source

CDB eyeing Dresdner Bank

Posted on 06 August 2008 by admin  |  Email |Print

From China Development Bank [CDB] is competing with Commerzbank AG to buy Allianz SE’s Dresdner Bank, Germany’s third-largest lender by assets, three people familiar with the matter said… Full article: Source

August 2008
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