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Sovereign Wealth Funds Briefing - Archive | August, 2009

SWFs know how to spot a bargain

Posted on 31 August 2009 by VRS  |  Email |Print

From Timesonline.co.uk: There is one thing worse than big, alien, opaque and unaccountable sovereign wealth funds (SWFs) snapping up our national business treasures. That is those same funds not regarding our treasures as worthy of being snapped up.

It’s not the greatest vote of confidence that so few SWFs have been rushing to buy British assets. The Chinese have been particularly stand-offish, negotiating to buy businesses in the US, Canada, Australia, Germany and India, but largely shunning the UK…………..Full Article: Source

IMF paper sounds red alert for SWFs over domestic investment

Posted on 31 August 2009 by VRS  |  Email |Print

From Business24-7.ae: Sovereign wealth funds (SWFs) should stay away from local market, and focus on their stabilisation role in foreign markets as domestic investment could drive prices up, according to an IMF working paper.

Although SWFs domestic investment could support growth in their home countries, the invested funds at home should be part of the budget to avert mismanagement of funds and damage to public spending, the paper said…………..Full Article: Source

China SWF tips positive returns in 2009

Posted on 31 August 2009 by VRS  |  Email |Print

From Marketwatch.com: Sovereign-wealth fund China Investment Corp. is widening its investment portfolio and is confident of positive returns this year after losing money in 2008, CIC Chairman Lou Jiwei was quoted in reports as saying.

“The CIC has made overseas investments with high risks during the past two years to try to get good returns in future,” Lou said over the weekend, according to Dow Jones Newswires…………..Full Article: Source

China’s CIC wealth fund muscles up

Posted on 31 August 2009 by VRS  |  Email |Print

From Asiaone.com: China Investment Corp is investing as much overseas each month this year as it did in all of 2008, Lou Jiwei, the chairman of the $298 billion sovereign wealth fund, said on Saturday.

CIC is counting on handsome returns this year and might one day ask the government to hand it more of the country’s record hoard of foreign reserves to manage, Lou, a former vice finance minister, said…………..Full Article: Source

China investing billions in hedge funds

Posted on 31 August 2009 by VRS  |  Email |Print

From Koreaherald.co.kr: China Investment Corp., the country’s sovereign wealth fund, is continuing to shift its investments away from cash and is investing billions in hedge funds and private-equity funds, Chairman Lou Jiwei said.

China Investment has invested “many times” the $500 million that CIC was reported to have placed in hedge funds and private-equity firms in June, Lou said Saturday in an interview in Beijing. He said China Investment was also investing in fund-of- funds…………..Full Article: Source

Feeling flush, China’s CIC opens wallet

Posted on 31 August 2009 by VRS  |  Email |Print

From WSJ: China’s sovereign-wealth fund is anticipating a positive return on its investments this year and may ask the Chinese government for more capital to deploy, its chairman said.

China Investment Corp. Chairman Lou Jiwei, speaking on the sidelines of an economics conference in Beijing on Saturday, said investment in CIC’s global portfolio for “one month this year equaled that of the whole last year.” He didn’t clarify whether he was referring to a specific month or an average…………..Full Article (Subscription Required) : Source

China chasing bubbles

Posted on 31 August 2009 by VRS  |  Email |Print

From Fnarena.com: “It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.” So said Lou Jiwei, the chairman of China’s US$300bn sovereign wealth fund China Investment Corp.

The Global Financial Crisis came about following the bursting of what had been decades of a growing developed world debt bubble…………..Full Article: Source

CIC, others interested in loan-for-stakes in Glencore

Posted on 31 August 2009 by VRS  |  Email |Print

From Reuters: Sovereign wealth fund China Investment Corporation is one of six parties interested in loaning cash to Glencore International AG in return for a stake in the world’s largest commodities trader, according to a report in the Independent on Sunday.

The newspaper said the other five investors in loan-for-stake talks are Fidelity, BlackRock, Capital Group, U.S.-based energy investor First Reserve Corporation, and Singapore state investor Temasek………….Full Article: Source

US lawmaker says China’s CIC considers NY office

Posted on 31 August 2009 by VRS  |  Email |Print

From Reuters: China Investment Corp, the country’s $200 billion sovereign wealth fund, is considering opening a major office in New York, U.S. Representative Carolyn Maloney said on Reuters Television on Friday.

The office could bring 1500 jobs to New York, said Maloney, a Democrat who chairs the House Joint Economic Committee…………..Full Article: Source

CIC bails out Canary Wharf owner Songbird Estates

Posted on 31 August 2009 by VRS  |  Email |Print

From Timesonline.co.uk: China’s state sovereign wealth fund has bailed out the heavily indebted majority owner of Canary Wharf in its first big investment in Britain.

A consortium of China Investment Corporation (CIC); Qatar Holding, the Qatari sovereign wealth fund; and a number of existing investors in Songbird Estates, the majority owner of Canary Wharf, have agreed a life-saving rescue rights issue to pay down £880 million owed by Songbird to Citigroup, the American bank. The deal saved Songbird from bankruptcy…………..Full Article: Source

Chinese and Qataris governments save Canary Wharf developer

Posted on 31 August 2009 by VRS  |  Email |Print

From Dailymail.co.uk: Sovereign wealth funds owned by the two governments have promised to buy back £275million of Songbird’s £880million debts from Citigroup at a 5 per cent discount.
The deal will be funded by the issue of new preference shares…………..Full Article: Source

Qatar SWF to be the largest shareholder in UK firm

Posted on 31 August 2009 by VRS  |  Email |Print

From Gulf-times.com: Qatar’s sovereign wealth fund has joined China Investment Corporation to subscribe to £275mn ($447.9mn) in preference shares issued by Songbird.

Songbird is raising funds to purchase and repay senior loan facilities with US bank Citi and the sale would make the two sovereign wealth funds its largest shareholders with about one-third of its shares…………..Full Article: Source

Norway’s Oil Fund names new executive management team

Posted on 31 August 2009 by VRS  |  Email |Print

From Bloomberg: Norges Bank Investment Management, which oversees Europe’s largest sovereign wealth fund, named a new team of executives after record losses last year wiped out gains from 12 years of investing Norway’s oil and gas revenue.

The 2.47 trillion-krone ($410 billion) Government Pension Fund - Global promoted Bengt Enge to chief investment officer, Trond Grande to chief risk officer and Age Bakker to chief operating officer, the Oslo-based fund said………….Full Article: Source

Singapore’s GIC names chiefs for Europe, Americas operations

Posted on 31 August 2009 by VRS  |  Email |Print

From Reuters: The Government of Singapore Investment Corp (GIC), which manages an estimated $200 billion-plus in assets said it has created the new posts of president (Europe) and president (Americas) to help it improve ties with policymakers.

GIC has ploughed billions into Citigroup and UBS. It is the world’s fourth largest sovereign wealth fund with assets of around $300 billion, according to estimates by Deutsche Bank…………..Full Article: Source

MAS accuses fund manager of rigging the market

Posted on 31 August 2009 by VRS  |  Email |Print

From Asiaone.com: The Government of Singapore Investment Corporation (GIC) is among the manager’s major clients.
Dr Tan Chong Koay, one of Singapore’s pioneering boutique fund managers, is founder and chief executive of the Singapore unit, Pheim Asset Management (Asia) and Pheim Asset Management (Malaysia)…………..Full Article: Source

Temasek: One step closer to accountability?

Posted on 31 August 2009 by VRS  |  Email |Print

From Temasekreview.com: There are two subjects that seem to be absorbing the attention of Singaporeans these days: immigration and Temasek.

Wearing my banker / asset manager hat, I believe the recent changes in the Temasek Charter are a step in the right direction. The quicker that Temasek and its corporate culture can be transformed into a ‘pure’ commercial organization the better for all Singaporeans…………..Full Article: Source

SWFs buddy up for top returns

Posted on 31 August 2009 by VRS  |  Email |Print

From Arabianbusiness.com: Sovereign wealth funds are working in concert to make joint strategic investments in order to reduce risks and maximise returns, creating a potentially stabilising force in global markets.

In the current economic turmoil, sovereign wealth funds (SWFs) are learning there is safety in numbers…………..Full Article: Source

Auditors query NSSF deals

Posted on 31 August 2009 by VRS  |  Email |Print

From Monitor.co.ug: A new audit report has unearthed cases of serious mismanagement of workers’ provident fund by top managers, raising the issue of irregular procurement of some 67 vehicles and questionable payment of Shs148 million to five law firms within six months in 2008.
KPGM auditors say the National Social Security Fund has pre-qualified lawyers, but on different occasions, the Fund management under suspended MD Chandi Jamwa opted to engage other law firms…………..Full Article: Source

Qatari Diar launches project in Tajikistan

Posted on 31 August 2009 by VRS  |  Email |Print

From Menafn.com: Qatari Diar Real Estate Investment Company, an international leader in sustainable real estate development, has launched a new first-class mixed-use development project in Dushanbe, Tajikistan. Qatari Diar Real Estate Investment Company is wholly owned by the SWF Qatar Investment Authority.

During the ceremony held here on Thursday, Qatari Diar CEO Ghanim bin Saad Al Saad visited the site of the project before presenting a model of Diar Dushanbe to Tajikistan President Emomali Rahmon at the Hyatt Regency Hotel…………..Full Article: Source

Gulf SWFs look to international investment banks for M&A teams

Posted on 28 August 2009 by VRS  |  Email |Print

From Efinancialcareers-gulf.com: Gulf sovereign wealth funds have been stretching their influence beyond the region this year and getting involved in a large number of global M&A deals. As a result, they’re looking to recruit investment bankers with experience in international firms.

SWFs in the UAE have been involved in M&A deals worth over $9.3bn in the first half of 2009, according to data from mergermarket. This accounts for 53.4% of the total number of deals conducted by SWFs globally…………..Full Article: Source

Malta seeks Qatar SWF investments

Posted on 28 August 2009 by VRS  |  Email |Print

From Gulf-times.com: Pitching for rapid conclusion to a free trade agreement between the GCC and the European Union, Malta yesterday said it was in talks with Qatar’s sovereign wealth fund on seeking investments.

The Southern European nation, which has signed seven bilateral agreements (including double taxation avoidance and air services) with Qatar, also saw its Chamber of Small and Medium Enterprises inking pact with the Qatar Chamber of Commerce and Industry (QCCI)…………..Full Article: Source

Polish government hopes to anchor shipyard deal soon

Posted on 28 August 2009 by VRS  |  Email |Print

From Polskieradio.pl: Government spokesperson Pawel Gras has announced that representatives of the Qatar Investment Authority (QIA) will be in Poland this week to meet with Finance Minister Aleksander Grad to discuss the purchase of the Gdynia and Szczecin shipyards.

Last week, Minister Grad announced that the Qatari government’s investment fund has began legal proceedings to purchase Poland’s shipyards after the original investor, Stichting Particulier Fonds Greenrights, failed to meet the 17 August deadline…………..Full Article: Source

ASX denies speculation of investment from China SWF

Posted on 28 August 2009 by VRS  |  Email |Print

From Transworldnews.com: China’s sovereign wealth fund reportedly is considering investing in Taiwan-based Advanced Semiconductor Engineering and the back-end service supplier’s affiliate Hung Ching Development & Construction. But ASE has maintained that China’s sovereign wealth fund has neither been in touch with the company or the subsidiary, nor made any investment.

Taiwan’s Ministry of Economic Affairs in June maintained that China’s sovereign wealth fund is not allowed to invest in Taiwan companies…………..Full Article: Source

Norway domestic pension returned 12.8 pct

Posted on 28 August 2009 by VRS  |  Email |Print

From IPE: The Government Pension Fund – Norway achieved an investment return of 12.8%, or NOK11bn, in the first half of 2009 as the total value of its investment assets reached NOK98.9bn (€11.4bn).

Figures from Folketrygdfondet, the organisation responsible for managing the domestic fund, revealed the scheme’s Norwegian equity portfolio produced the best return of 21.32%, while Norwegian fixed income assets returned 4.76%…………..Full Article: Source

Temasek: Divestment now just an option

Posted on 28 August 2009 by VRS  |  Email |Print

From Asiaone.com: Temasek Holdings said yesterday that it no longer sees the divestment of its stakes in Temasek-linked companies (TLCs) as one of its core functions.

Divestment is now simply an option that the investment firm may adopt as it actively manages its portfolio of both local and international companies in the years ahead…………..Full Article: Source

Temasek’s new charter looks to downplay govt links

Posted on 28 August 2009 by VRS  |  Email |Print

From Vccircle.com: Temasek, the largest sovereign wealth fund active in India has changed its global charter which emphasises its mission “to create and deliver sustainable long-term returns for our stakeholders”.
The charter, which was first made public in 2002, stated earlier that the Singapore government — through Temasek — needed to own and control firms deemed critical to the city-state’s security, economic well-being or public policy objectives. This earlier note has been struck off in the revised charter…………..Full Article: Source

China wealth-fund chief tips buying spree

Posted on 28 August 2009 by VRS  |  Email |Print

From Marketwatch.com: The president of China’s well-financed sovereign wealth fund said his group plans a massive, ten-fold expansion of its overseas investment this year.

China Investment Corp. President Gao Xiqing said the fund’s foreign holdings will go from $4.8 billion last year to “several tens of billion dollars”…………..Full Article: Source

Controversial Nairobi land reverts to NSSF

Posted on 28 August 2009 by VRS  |  Email |Print

From Nation.co.ke: The National Social Security Fund has been forced to pay Sh1.2 billion to get back the title deeds for a controversial piece of land in Nairobi the workers’ fund had unsuccessfully tried to sell.

The Fund’s Board of Trustees announced at a Thursday press conference, on the plot, they would be carrying out an audit of assets it owns in a bid to stop similar transfers in the future…………..Full Article: Source

Government borrowing: More where that came from

Posted on 28 August 2009 by VRS  |  Email |Print

From Economist.com: Foreign investors such as sovereign-wealth funds and central banks have been happily hoovering up Britain’s shorter-term securities and now own more than one-third of all outstanding gilts.
Thanks to the Bank of England’s historically low base rate (now 0.5%), banks have been able to borrow cheaply in the short-term money markets and lend to the government at higher interest rates…………..Full Article: Source

China wealth fund to boost investment 10-fold

Posted on 27 August 2009 by VRS  |  Email |Print

From Forbes: China’s sovereign wealth fund will increase new overseas investment this year by around 10 times from the previous year on signs the global economy has bottomed out, one of the organisation’s top managers said in a newspaper interview.

Gao Xiqing, president of China Investment Corporation (CIC), also said he was examining making new investment in Japanese companies and property on prospects of a recovery in the country’s economy, according to the interview that ran on Thursday in Japan’s daily Asahi newspaper……………Full Article: Source

China wealth fund buys 40 pct of CITIC Pacific unit

Posted on 27 August 2009 by VRS  |  Email |Print

From Reuters: Steel-to-property conglomerate CITIC Pacific said on Wednesday that China’s sovereign wealth fund, China Investment Corp, has bought a 40 percent stake in its private equity fund management unit, CITIC Capital.

No financial details were given. Last month, sources told Reuters that the $200 billion wealth fund had agreed to invest HK$2 billion ($259.1 million) for a 40 percent stake in CITIC Capital……………Full Article: Source

CIC no longer to pay interest to the state

Posted on 27 August 2009 by VRS  |  Email |Print

From Eeo.com.cn: China Investment Corporation, the country’s $200 billion US dollars sovereign wealth fund, will change the way it reimburses the state for its original investment in the fund, the Economic Observer learned.

The CIC has reached an agreement with the Ministry of Finance (MOF) to treat the $200 billion US dollars used to originally finance the company as assets rather than a debt, a source from the CIC told the EO……………Full Article: Source

SWFs no longer at arm’s length

Posted on 27 August 2009 by VRS  |  Email |Print

From Financialstandard.com.au: Sovereign wealth funds will gradually switch from being passive investors to active shareholders, predicts Andrew Rozanov, head of Sovereign Advisory at State Street Global Markets.

This year Rozanov co-authored a comprehensive State Street report looking at the long-term consequences of the financial crisis for SWFs……………Full Article: Source

Temasek seeks more Asian exposure

Posted on 27 August 2009 by VRS  |  Email |Print

From Financialstandard.com.au: Australian fund managers with a focus on Asia should pay attention to the $160 billion Temasek Holdings, which recently flagged a new charter that would open its mandate book to more Asian and emerging markets fund managers.

The Singaporean sovereign wealth fund has updated its charter as part of its 35th anniversary, which includes a renewed focus on Asia and other developing regions……………Full Article: Source

MOF rebuts WSJ: Temasek discloses all ‘relevant’ information

Posted on 27 August 2009 by VRS  |  Email |Print

From Temasekreview.com: In a scathing rebuttal which was published on Wall Street Journal (WSJ), Singapore’s Ministry of Finance accused its editoral for making ‘unfounded claims’ on disclosure regarding Temasek Holdings.

On Aug 20, WSJ published an editorial on the investment company and transparency, saying that the episode showed that ‘the Government will disclose only what it deems acceptable regarding Temasek’……………Full Article: Source

Temasek in image shift

Posted on 27 August 2009 by VRS  |  Email |Print

From Thestandard.com.hk: Singapore state investor Temasek has played down its links to government policy or strategic interests in a revised charter as it eyes more overseas assets from banks to infrastructure.

Temasek, one of the world’s biggest wealth funds whose sole shareholder is the Singapore government, still has controlling stakes in half the republic’s blue- chip firms, but it has increased its exposure elsewhere……………Full Article: Source

Another hollow and empty Charter by Temasek

Posted on 27 August 2009 by VRS  |  Email |Print

From Temasekreview.com: State-owned sovereign wealth fund Temasek Holdings, which lost billions of dollars in failed overseas investments lately, has released an updated Charter that “reaffirms its role as a commercial investment company to create and deliver sustainable long-term returns for its stakeholders.”

Speaking at the launch on Tuesday, Temasek’s chairman S Dhanabalan said it was an opportune time to update the Charter which was first published in 2002 though that there is not much change in the Charter’s ideals and principles……………Full Article: Source

Mubadala gets Dh8.8bln in H1

Posted on 27 August 2009 by VRS  |  Email |Print

From Business24-7.ae: Mubadala Development Company, an investment arm of the Abu Dhabi Government, received cumulative capital contributions of Dh8.8 billion from the government during the first six months of this year.

Global ratings agency Fitch Ratings yesterday said the government also approved capital contributions of up to Dh21bn for 2009……………Full Article: Source

Mubadala gets ‘AA’ rating, ‘stable’ outlook

Posted on 27 August 2009 by VRS  |  Email |Print

From Khaleejtimes.com: Fitch Ratings has affirmed Mubadala Development Company’s long-term issuer default rating, or IDR, and its senior unsecured rating as ‘AA’.

The Abu Dhabi-based group’s short-term IDR has been affirmed at ‘F1+’, with a ‘stable’ outlook……………Full Article: Source

Libyan Investment Authority to open London branch

Posted on 27 August 2009 by VRS  |  Email |Print

From Magharebia.com: The Libyan Investment Authority (LIA) is expected to open its first branch in London. A London branch of the Tripoli-based sovereign wealth fund could potentially channel “billions of dollars worth of investment” to the UK.
LIA has already purchased two London buildings and reportedly plans to expand its real estate holdings in the city……………Full Article: Source

Krull Corporation’s Alexander Mirtchev discusses the growing trend of SWFs

Posted on 27 August 2009 by VRS  |  Email |Print

International economist Dr. Alexander Mirtchev, president and founder of the global strategic solutions provider Krull Corporation, considers sovereign wealth funds to be a potent, but “less visible” factor for growth in the world economy.
In an interview with Reuters, Mirtchev analyzed the growing number of sovereign wealth fund alliances that have become more and more prevalent, expressing the view that such cooperation would ultimately benefit the regions where such “alliances” operate, as well as the funds themselves……………Full Press Release: Source

Angola foreign reserves rise to $12.57 bln in July

Posted on 27 August 2009 by VRS  |  Email |Print

From Reuters: Angola’s foreign exchange reserves rose for the first time since November 2008 in July, to $12.57 billion from $12.14 billion in June on rising oil prices and exports, a source close to the central bank said on Wednesday.
The source cited an internal central bank document……………Full Article: Source

Singapore’s Temasek downplays its strategic state role

Posted on 26 August 2009 by VRS  |  Email |Print

From Reuters: Singapore state investor Temasek downplayed its links to government policy or strategic interests in a revised charter issued on Tuesday, as it eyes more overseas assets from banks to infrastructure.

Temasek, one of the world’s biggest wealth funds whose sole shareholder is the Singapore government, still has controlling stakes in half the city-state’s blue-chip firms such as Singapore Airlines, but it has increased its exposure elsewhere…………..Full Article: Source

Temasek steps back from Singapore Inc.

Posted on 26 August 2009 by VRS  |  Email |Print

From WSJ: Temasek Holdings Pte. Ltd. announced revisions to its charter in an effort to distance its mission from the interests of Singapore Inc.

The revised charter defines Singapore’s Temasek as an investment company, managed on commercial principles to create and deliver sustainable long-term value for its stakeholders…………..Full Article (Subscription Required) : Source

Temasek to become a more active investor

Posted on 26 August 2009 by VRS  |  Email |Print

From Telegraph: Temasek Holdings, the Sinaporean state investment vehicle, has stated a commitment to active engagement with the companies it owns, signally a shift among sovereign wealth funds to taking a more prominent investment role.
The fund, which controls $134bn (£82bn) of assets and owns 19pc of Standard Chartered, 9pc of Merrill Lynch and 2pc of Barclays, has updated its investment charter for the first time in seven years, pledging “sustainable returns by engaging with the boards and management of our portfolio companies”………….Full Article: Source

Temasek eyes listing prospects

Posted on 26 August 2009 by VRS  |  Email |Print

From Thepeninsulaqatar.com: Temasek Holdings, the Singapore state investment company, said yesterday that it would be prepared to list some of its biggest holdings, including port operator PSA and Singapore Power, if future conditions warranted such a move.

“There is a right time for them to be listed,” said Ho Ching, Temasek chief executive, as she unveiled a revised charter outlining the group’s goals and relationship to the Singapore government…………..Full Article: Source

Temasek to work closely with companies in portfolio

Posted on 26 August 2009 by VRS  |  Email |Print

From Bloomberg: Temasek Holdings Pte, Singapore’s state investment firm, said it plans to work closely with companies in which it owns stakes as overseas holdings increase, in the first change to its charter in seven years.

Temasek will focus on “sustainable returns by engaging with the boards and management of our portfolio companies,” Chairman S. Dhanabalan said at a briefing in Singapore today…………..Full Article: Source

Temasek says not put off by Western bank losses

Posted on 26 August 2009 by VRS  |  Email |Print

From AFP: Singapore investment firm Temasek Holdings said Tuesday it had not been put off investing in Western financial institutions despite suffering massive losses from the global financial crisis.

Ho Ching, chief executive of the state-linked firm, said it would invest in such banks “if the opportunities come which look attractive”…………..Full Article: Source

More transparent, no regrets

Posted on 26 August 2009 by VRS  |  Email |Print

From Straitstimes.com: Temasek Holdings may have received more flak from the public since becoming more transparent about its performance and operations, but it does not regret the move.
‘We have no regrets because we are looking at this over the long term,’ said CEO Ho Ching in an interview on Monday…………..Full Article (Subscription Required) : Source

Analysts say Temasek’s update of charter timely

Posted on 26 August 2009 by VRS  |  Email |Print

From Channelnewsasia.com: Analysts said Temasek’s decision to update its charter is a timely one, given the changes in the global economic environment over the past seven years.

They also believe the refining of the charter will help set Temasek apart from other sovereign wealth funds which are controlled by their respective governments…………..Full Article: Source

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