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Sovereign Wealth Funds Briefing - Archive | September, 2008

China’s SAFE poses challenge to SWF code-of-conduct efforts

Posted on 30 September 2008 by admin  |  Email |Print

From Research Recap: Efforts to get a better handle on the activities of sovereign wealth funds face a number of challenges, notably from China, according to Oxford Analytica.

…[S]tructurally SAFE is not a SWF, so there is a risk that the forthcoming IMF principles may not be easily applicable to it, OxAn says… Full article: Source

Algerian president: No SWFs "at present time"

Posted on 30 September 2008 by admin  |  Email |Print

From LesAfriques.com: “Some people say we should seriously experiment with sovereign funds to make our foreign exchange reserves more profitable abroad. I believe our country continues to be greatly in need of capital to develop the nation’s economy – a reality that goes against choosing sovereign funds at the present time.”... Full article: Source

Should Malaysia’s Khazanah buy stakes in US banks?

Posted on 30 September 2008 by admin  |  Email |Print

From The Malaysia Star: Before local institutional investors [such as Khazanah Nasional] look to acquiring stakes in US banks, it will be a good idea to take heed of the home ground as the US financial turmoil has impacted East Asia via tighter funding conditions for the region’s financial hubs... Full article: Source

Sovereign wealth funds do not have all the answers

Posted on 29 September 2008 by admin  |  Email |Print

From FT.com: Even in countries where there is neither parliament nor free media, some voices, including in the banking sector, have called on governments and their sovereign wealth funds to focus on the home front and shore up domestic markets... Full article: Source

The world is observing what China will do amid crisis

Posted on 29 September 2008 by admin  |  Email |Print

From TheAustralian.com: [T]he reluctance of the great state-owned conglomerate Citic to take over Morgan Stanley when the opening beckoned, leaving the sovereign wealth fund China Investment Corp [CIC] to build its passive stake instead, illustrates that those at the top in the [Chinese] finance sector are aware of their lack of sufficient experience to start operating such companies globally, however badly the Americans have messed up... Full article: Source

Abu Dhabi favours low equity in oil investments

Posted on 29 September 2008 by admin  |  Email |Print

From Business24-7.ae: Abu Dhabi said yesterday it remains committed to long-term projects in its overseas oil investments but would favour low equity in the targeted ventures. The International Petroleum Investment Company (Ipic), the government’s downstream investment arm, said it avoids getting involved in direct management of the companies it invests in as it is pushing ahead with a major drive to expand its assets in the UAE and other countries… Full article: Source

China’s national pension fund invests RMB15bn overseas

Posted on 29 September 2008 by admin  |  Email |Print

From Chinaknowledge.com: China’s National Social Security Fund (NSSF) has invested RMB 15 billion (HK$17.06 billion), equivalent 3% of its RMB 500 billion in shares of listed overseas companies and will raise the holdings to boost returns, said Zhan Yuyin, the director-general of global investment at NSSF, sources reported... Full article: Source

ADIC-UBS Infrastructure Investment Fund bids for mega infrastructure projects

Posted on 29 September 2008 by admin  |  Email |Print

From Khaleejtimes.com: The ADIC-UBS Infrastructure Investment Fund is currently bidding for four multi-billion US dollar infrastructure projects including the Aqaba Port Redevelopment in Jordan, an Independent Power and Water Plant in Saudi Arabia, a Sewage Treatment Plant in Bahrain, and a Schools Project in Egypt... Full article: Source

Officials: Libyan investments not hurt by world financial crisis

Posted on 29 September 2008 by admin  |  Email |Print

From Tripolipost.com: Speaking after a meeting of the Libyan Investment Authority (LIA) on Monday, the Secretary of the GPC Mr. Al-Baghdadi Al-Mahmoudi said that Libyan investments abroad were not hurt by the turmoil in the financial markets around the globe... Full article: Source

Sovereign funds lose £1bln in Western banks

Posted on 29 September 2008 by admin  |  Email |Print

From Guardian.co.uk: Investors from China and the Middle East have lost more than £1bn baling out British and American banks - and the losses look set to mount further... Full article: Source

ADIA loses senior fund controller

Posted on 29 September 2008 by admin  |  Email |Print

From PEnews.com: George Sudarskis, a senior fund controller at secretive sovereign wealth fund Abu Dhabi Investment Authority [ADIA], has left the operation... Full article (subscription required): Source

Blackstone executive: Weak overseas market good chance for CIC to invest

Posted on 29 September 2008 by admin  |  Email |Print

From Easybourse.com: China’s US$200 billion sovereign-wealth fund has some good opportunities to buy prime overseas assets as their prices have slumped amid the global financial turmoil, [Antony Leung, Greater China chairman for the US private-equity firm Blackstone Group, said at the World Economic Forum in Tianjin] Sunday... Full article: Source

Scottish first minister under fire over visit to seek Middle East loans

Posted on 29 September 2008 by admin  |  Email |Print

From Scotsman.com: Alex Salmond, the [Scottish] First Minister, has been accused of going cap in hand to the Middle East for money because his schemes to pay for Scotland’s infrastructure have failed. It has been revealed that Mr Salmond will visit Qatar to ask for loans for projects such as the new Forth Road Bridge… Full article: Source

CIC`s turning back will be held up in the future as a moment when history could have turned in a different direction

Posted on 29 September 2008 by admin  |  Email |Print

From Taipeitimes.com: China is the US of this century. The initial stages of the credit crunch last year were managed so apparently painlessly because sovereign wealth funds (SWF) from the Middle East, but above all from China, were willing to step in and recapitalize the debt of US and European institutions. The pivotal moment in today’s events came when the Chinese SWF China Investment Co (CIC) was unwilling to go further in its exploration of buying Lehman Brothers. CIC’s turning back will be held up in the future as a moment when history could have turned in a different direction… Full article: Source

Qataris buy 20 percent of UK property firm Chelsfield

Posted on 29 September 2008 by admin  |  Email |Print

From Reuters.com: The Qatar Investment Authority [QIA] has bought a 20 percent stake in British property company Chelsfield Partners LLP, boosting the Gulf state’s interest in commercial real estate, the two partners said on Sunday... Full article: Source

US Treasury behaving like a giant wealth fund

Posted on 27 September 2008 by admin  |  Email |Print

From Telegraph.co.uk: The US Treasury is not taking on permanent debt: it is behaving like a giant wealth fund, hoovering up mortgage securities selling far below their real value for reasons of panic. Famed investor Warren Buffett expects it to make ‘a considerable amount of money... Full article: Source

EU’s Mandelson, Airbus’s Enders see "savior" in sovereign funds

Posted on 27 September 2008 by admin  |  Email |Print

From Bloomberg.com: Sovereign wealth funds will become major sources of funding for Western companies as financial markets reel, said European Union Trade Commissioner Peter Mandelson and Airbus SAS Chief Executive Officer Tom Enders... Full article: Source

Gulf funds poised to pounce on US assets

Posted on 27 September 2008 by admin  |  Email |Print

From FT.com: Arab sovereign wealth funds are likely to pounce on distressed US assets after the government bail-out plan eases the extraordinary tensions in financial markets, according to [Gary Long, president of Investcorp,] one of the top intermediaries in the Gulf... Full article: Source

Temasek says Maybank did not take lower BII offer

Posted on 27 September 2008 by admin  |  Email |Print

From Reuters.com: Fullerton Financial Holdings, part of Singapore’s Temasek, said on Saturday it offered an improved deal for the sale of its stake in Bank Internasional Indonesia [BII] but Malaysia’s Maybank did not accept it, another blow to a troubled deal... Full article: Source

Malaysia’s UBG in oil venture with Mubadala

Posted on 26 September 2008 by admin  |  Email |Print

From Reuters.com: Malaysian infrastructure firm UBG Berhad and Abu Dhabi investment agency Mubadala Development Co have agreed to form a 50:50 joint venture to develop petroleum projects in the Southeast Asian country, UBG said on Thursday… Full article: Source

Mandelson: EU welcomes ‘responsible investment’ from China sovereign fund

Posted on 26 September 2008 by admin  |  Email |Print

From Forbes.com: The European Union is open to ‘responsible investment’ from China Investment Corp (CIC), EU Trade Commissioner Peter Mandelson said ahead of a meeting with Lou Jiwei, chairman of the 200 bln usd sovereign wealth fund [the China Investment Corporation (CIC)]… Full article: Source

CIC unlikely to buy more of Blackstone

Posted on 26 September 2008 by admin  |  Email |Print

From EEO.com: US-based private equity house Blackstone revealed that China’s sovereign wealth fund, China Investment Corporation (CIC), had no immediate intention to increase stake in the company… Full article: Source

GIC sharpens focus on Asia, keeps eye on US

Posted on 26 September 2008 by admin  |  Email |Print

From Asiaone.com: Asia and other emerging economies will be a growing focus for the Government of Singapore Investment Corp (GIC) in coming years, said its investment chief [Ng Kok Song] yesterday… Full article: Source

South Korean pension fund chief apologizes for mismanagement

Posted on 26 September 2008 by admin  |  Email |Print

From Koreatimes.co.kr: [South Korean] ]National Pension Service (NPS) President Park Hae-choon apologized to the public for mismanaging public funds which suffered steep losses through investment in stocks and bonds… Full article: Source

Japan finance minister says cautious on sovereign fund now

Posted on 26 September 2008 by admin  |  Email |Print

From Reuters.com: Japan’s new finance minister, Shoichi Nakagawa, said on Friday he was cautious about creating a sovereign wealth fund using some of Japan’s foreign exchange reserves, given the turmoil in financial markets… Full article: Source

The one with the money makes the rules

Posted on 26 September 2008 by admin  |  Email |Print

From Forbes.com: For the past 20 years, globalization has relentlessly diffused power and technology into the hands of rising powers like China and India, while control over energy resources has propelled Russia, Brazil, Venezuela, Kazakhstan and Saudi Arabia into the tier of pivotal states as well. The axiom at play is as familiar to historians, economists, and realists as it is shocking to those who cling to American exceptionalism: The one with the money makes the rules… Full article: Source

Russia: 32 billion dollars in search of a manager

Posted on 26 September 2008 by admin  |  Email |Print

From oxan.com: Relocating to Moscow might not be a top priority for investment bankers left adrift in the wake of the global financial crisis, but the Russian Finance Ministry may soon start issuing vacancy announcements… Full article: Source

Nationalists call for Welsh SWF

Posted on 26 September 2008 by admin  |  Email |Print

From alesonline.co.uk: Plaid Cymru’s [the Welsh nationalist party] economy spokesman Adam Price is urging the Assembly Government to consider following the example of other countries in setting up a Sovereign Wealth Fund.

Hat tip Ian James Johnson, who writes more about a Welsh SWF here and discusses the concept of the SWF here… Full article: Source

Chinese investment (mostly) welcome

Posted on 26 September 2008 by admin  |  Email |Print

From Heritage.org: What must be quickly achieved is greater transparency from SAFE as well as state firms. SAFE declines to discuss even the existence of offshore arms through which purchases are made. Just a quarterly report of SAFE’s holdings would go far… Full article: Source

OIR Q&A with Prof. Victor Fleischer on SWFs and US tax policy

Posted on 26 September 2008 by admin  |  Email |Print

From The Oxford International Review’s SWF blog: interview with Professor Victor Fleischer of the University of Illinois College of Law:

“8220;I think, at a minimum, Congress should repeal section 892 and treat SWFs like private investors. Under current law, the tax code subsidizes state-controlled investment to the detriment of private investors. Allowing private investors to compete on a level playing field would dampen any potential clientele effect.”… Full article: Source

KIA sees no limit to investments in local bourse

Posted on 25 September 2008 by admin  |  Email |Print

From Gulf-Times.com: The Kuwait Investment Authority (KIA), which manages the Gulf Arab state’s sovereign wealth, said yesterday there was no limit to the amount it could invest in the local bourse to shore up flagging stocks… Full article: Source

SWFs back alternatives

Posted on 25 September 2008 by admin  |  Email |Print

From Financialstandard.com: The $3.8 trillion [Australian dollars] sovereign wealth funds sector is expected to pour more money into alternatives to diversify their portfolios, new research shows.

The article quotes Patricia Pascuzzo, Mercer’s principal, sovereign funds global, as saying that, “We can expect that sovereign wealth funds [will] progressively diversify into a broader range of investment asset class, particularly non-liquid asset classes such as infrastructure, commodities, private equity, real estate… Full article: Source

QIA spurned Wall Street

Posted on 25 September 2008 by admin  |  Email |Print

From FT.com: A leading executive of Qatar’s sovereign wealth fund [the Qatar Investment Authority (QIA)] on Wednesday disclosed it had spurned the chance to help recapitalise troubled Wall Street banks, in remarks that offered a rare insight into its investment strategy… Full article: Source

The view from Tanzania: "The Chinese are supposed to be big investors"

Posted on 25 September 2008 by admin  |  Email |Print

From TheCitizen.co.tz: While trade between China and Africa is growing, with an initial $5 billion China Africa Development Fund set aside, [Tanzania Investment Centre] boss Ole Naiko said the Chinese were being segregated in Dar es Salaam’s Kariakoo area. ‘People in Kariakoo hate the Chinese just because they see them doing small businesses, while in the minds of locals, they are supposed to be big investors.’… Full article: Source

Dubai Group eyes Cambodia

Posted on 25 September 2008 by admin  |  Email |Print

From PhnompenhPost.com: Dubai Group, an investment company managing more than US$40 billion on behalf of the emirate’s ruler, said it may invest in Leopard Capital’s Cambodia fund, the group’s first investment in the Kingdom… Full article: Source

Korean banks urged to hold off mergers, acquisitions

Posted on 25 September 2008 by admin  |  Email |Print

From Yahoo.com: South Korea’s top financial regulator urged local banks Thursday to refrain from inflating their assets through acquisitions, saying recent moves to increase their size are excessive… Full article: Source

China’s Sinopec to acquire Tanganyika Oil

Posted on 25 September 2008 by admin  |  Email |Print

From TheGlobeAndMail.com: Tanganyika Oil Co. has become the latest Canadian oil company with significant interest in the Middle East [in this case, in Syria] to be sold to a foreign company. In a statement released Thursday, Tanganyika announced that it had reached a deal that would see all of its outstanding common shares acquired by Chinese refiner Sinopec International Petroleum Exploration and Production Corp. for $2-billion… Full article: Source

Gulf states covet Asian farms

Posted on 25 September 2008 by admin  |  Email |Print

From ATimes.com: Once committed largely to perceived safe-haven investments in the United States, Gulf nations are now looking to send their petrodollar surpluses towards a more exotic global destination: Southeast Asian farmland… Full article: Source

Bahrain wealth fund posts $650m profit

Posted on 24 September 2008 by admin  |  Email |Print

From Reuters.com: Bahrain’s $14 billion sovereign wealth fund Mumtalakat said on Tuesday it posted a net profit of 245.8 million dinars ($652 million) in its first 18 months of operation and was planning to expand internationally... Full article: Source

SWFs under criticism over investments in western banks

Posted on 24 September 2008 by admin  |  Email |Print

From Thomsonmergernews.com: Sovereign wealth funds are coming under criticism at home over their investments in Western banks. Though this criticism may be short-sighted it will nonetheless mean that they will proceed with more caution... Full article: Source

Prudence guides China’s outlook

Posted on 24 September 2008 by admin  |  Email |Print

From FT.com: The lesson China’s leaders seem to have taken from the worsening global crisis is similar to the one they took away in Beijing at the start of the decade – do not mess with things you do not understand.

…At a secret meeting of top Communist officials at the start of this decade, Zhu Rongji, then China’s premier, summoned senior academics and finance officials to teach a crash course on complex financial instruments. Financial derivatives, in the best explanation provided that day, were described as like putting a mirror in front of another mirror, allowing a physical object to be reflected into infinity… Full article: Source

China Huijin increases stake in three top commercial lenders

Posted on 24 September 2008 by admin  |  Email |Print

From Xinhuanet.com: Chinese three largest commercial banks [CCB, ICBC, and BOC] announced Tuesday that Central Huijin Investment Co., Ltd., an investment arm of the government, had increased its shareholdings of the three banks... Full article: Source

Australian Future Fund chairman backs US rescue plan

Posted on 24 September 2008 by admin  |  Email |Print

From Businesspectator.com: Australian Future Fund chairman David Murray has given his backing to the $US700 billion ($A839 billion) US financial system rescue plan... Full article: Source

Australian Future Fund to stick with shares

Posted on 24 September 2008 by admin  |  Email |Print

From SMH.com: Australia’s $64 billion Future Fund is unlikely to reduce its asset allocation in shares, despite the volatility in global equity markets, and is seeking further investments in the banking sector... Full article: Source

Libya SWF target Telecom Italia

Posted on 24 September 2008 by admin  |  Email |Print

From Thomsonmergernews.com: Sovereign wealth fund, the Libyan Investment Authority [LIA], is preparing to take a stake of up to 10% in Telecom Italia holding company, Telco, for up to €4bn (US$5.87bn), it emerged on Wednesday... Full article: Source

Sovereign wealth funds increasingly involved in FDI - UNCTAD

Posted on 24 September 2008 by admin  |  Email |Print

From AFP/Google.com: Sovereign wealth funds are increasingly putting their money into foreign direct investment, with a very sharp increase recorded in the period 2005 to 2007, the UN said Wednesday. In terms of large-scale cross border mergers and acquisitions, their involvement jumped from one case in 1987 to 30 in 2007, the UN Conference on Trade and Development (UNCTAD) said in its latest World Investment Report… Full article: Source

Why a China deal didn’t work out for Morgan Stanley

Posted on 23 September 2008 by admin  |  Email |Print

From The WSJ Deal Journal blog: [Morgan Stanley’s potential] deal with China Investment Corp. foundered on a number of issues, says a person close to the deal, including an inability to agree on terms and concerns over regulatory approval in both China and the U.S. At a time when Morgan Stanley and other institutions may not have the luxury of waiting another day to escape spooked investors, waiting around for approvals from Beijing is a deal breaker… Full article: Source

Singapore GIC to disclose asset mix, returns in report

Posted on 23 September 2008 by admin  |  Email |Print

From CNBC.com: Singapore said on Tuesday it will allow the Government of Singapore Investment Corporation (GIC) to release its annual report for 2007/2008 to raise the public’s understanding of the sovereign fund... Full article: Source

Singapore GIC says worst of crisis may not be over

Posted on 23 September 2008 by admin  |  Email |Print

From Reuters.com: The Government of Singapore Investment Corp said on Tuesday the worst of the financial crisis may not be over, but it would continue to scour for opportunistic investments in sectors such as financials... Full article: Source

Deutsche Bahn seeks sovereign funds for IPO

Posted on 23 September 2008 by admin  |  Email |Print

From Bloomberg.com: Deutsche Bahn AG, the state-owned railway, is seeking to sell shares to sovereign wealth funds in the Middle East and Asia during the initial public offering, [German financial newspaper] Handelsblatt said, without saying where it got the information... Full article: Source

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