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Sovereign Wealth Funds Briefing - Archive | June, 2014

Unrest, Muted SWFs Slow Middle East M&A Activity

Posted on 27 June 2014 by VRS  |  Email |Print

Most investment bankers in Dubai’s financial center will tell you their pipeline – the transactions they are working on – is robust and that the Middle East’s post-crisis deal climate is improving. However, data for the first six months of 2014 suggest the regional dealmaker’s optimism is still premature.
The value of Middle Eastern mergers and acquisitions sunk to its lowest level in almost a decade, Dealogic data show. Transactions involving a Mideast buyer or seller fell to $23.6 billion in the first six months of this year to date, down 13% compared to the same period in 2013. Europe, by contrast, saw deal activity rebound in the same period………………………………………..Full Article: Source

Oil fund is complete con, says energy minister

Posted on 27 June 2014 by VRS  |  Email |Print

The SNP Government’s plan for an oil fund in an independent Scotland is a “complete con”, Ed Davey has insisted. The claim came as the Energy Secretary visits Scotland today to promote the UK Government’s renewable energy plans and announce an additional £50 million to clean up nuclear waste at Dounreay in Caithness.
Last month, John Swinney made clear the Scottish Government could set up a Norwegian-style oil fund from “the point of independence” and secure an “economic bonus”, which could be delivered only by breaking away from the UK. The Scottish Finance Secretary noted that Norway’s oil fund, which began in the mid-1990s “with only modest payments”, was now the world’s largest sovereign wealth fund worth more than £500 billion………………………………………..Full Article: Source

Norway’s $880bn SWF to target frontier markets like Nigeria

Posted on 27 June 2014 by VRS  |  Email |Print

Norway’s $880 billion sovereign wealth fund, the world’s largest, will expand its scope of investments to target “frontier markets” and add more currencies to generate higher returns. Frontier markets, also called pre-emerging markets, have equity markets that are less established than in emerging markets.
These include countries such as Nigeria, Argentina, Ukraine and Kazakhstan, according to MSCI Inc. The MSCI Frontier Market Index is up 16 percent this year compared with a 5 percent gain for the MSCI World Index of developed market shares. Nigerian equities made up 20 percent of the MSCI FM index as of June 2014………………………………………..Full Article: Source

Norway sovereign fund beefs up to buy more real assets

Posted on 27 June 2014 by VRS  |  Email |Print

Norway’s US$890 billion sovereign wealth fund, the world’s biggest, is building up its organisation and preparing for a move into infrastructure and private equity, its chief executive officer, Yngve Slyngstad, said.
The fund, in a strategy document released on Monday, revealed it was boosting its staff by about 60 per cent over the next three years to tackle increased investments in real estate and said it’s preparing for more investments in assets “with income streams that grow in line with the global economy”………………………………………..Full Article: Source

Sovereigns Boost Stakes in Alternatives, Emerging Markets

Posted on 27 June 2014 by VRS  |  Email |Print

Alternative investments continue to be winners of new global sovereign allocations, as do emerging markets — despite a fundamental preference for developed markets — according to a new study released Tuesday. Invesco’s second annual Invesco Global Sovereign Asset Management Study examined the investment behavior of sovereign investors across the globe.
The study was conducted among 52 individual sovereign investors, representing $5.7 trillion of assets, including standalone sovereign wealth funds, state pension funds, and central banks and government ministries………………………………………..Full Article: Source

Norway’s Frontier Gamble Will Bolster Market, HSBC Says

Posted on 26 June 2014 by VRS  |  Email |Print

Norway’s decision to have its $890 billion sovereign wealth fund boost investments in frontier markets will probably attract more institutional investors to the asset class, according to HSBC Holdings Plc.
The sovereign wealth fund, which is the world’s largest, said in a strategy report yesterday that it will target more frontier markets and include additional currencies to generate higher returns. MSCI Inc.’s gauge of stocks in the smaller developing nations has gained 16 percent this year, more than triple the 4.5 percent return on its emerging markets Index………………………………………..Full Article: Source

Norway Sovereign Wealth Fund Unveils “New Strategy” - Buy 5% Of Every European Stock

Posted on 26 June 2014 by VRS  |  Email |Print

Having learned last week that the world’s central banks are their sovereign wealth proxies have secretly pumped over $29 trillion into markets in the last few years, it is not entirely surprising to hear from one of the largest - Norway $888 billion oil fund - that it is buying stocks with bond hands and feet.
As The Financial Times reports, Yngve Slyngstad, chief executive of Norway’s sovereign wealth fund, is hiring aggressively to manage its real estate portfolio and while the oil fund already owns 2.5% of every listed European company on average, it plans to go above 5%. Phew, bagholder found………………………………………….Full Article: Source

Russia: Minister Proposes Splurging Welfare Fund on Infrastructure Projects

Posted on 26 June 2014 by VRS  |  Email |Print

Russia should take all of the money from a fund earmarked to cover future pension deficits and invest it in profitable infrastructure projects to generate good returns, Economic Development Minister Alexei Ulyukayev told the Vedomosti business daily in an interview published Wednesday. The government earlier this month raised the cap on spending from the National Welfare Fund, which collects revenue from oil and gas sales, the country’s biggest exports.
It now allows 60 percent of the fund to be spent on domestic infrastructure projects, up from an earlier 40 percent. The fund, designated to cover the future pension deficit of the country’s rapidly aging population, was $87 billion at the beginning of the month………………………………………..Full Article: Source

Azerbaijan plans to gain financial benefit from replacement of Oil Fund allocations with the loans from foreign markets

Posted on 26 June 2014 by VRS  |  Email |Print

Replacement of the State Oil Fund (SOFAZ) allocations with the loans from foreign markets promises to provide a financial benefit for Azerbaijan. According to the informed sources, Azerbaijan’s government plans to take advantage of such loans’ benefits.
“Today the markets demonstrate profitable financial conditions and this effect is enhanced by Azerbaijan’s financial stability and solvency. Many lenders and investors are ready to provide finances to Azerbaijan. In this regard, governmental experts believe that today it’s quite possible to get foreign loans at the rate of LIBOR level or LIBOR +0…% and we should take this opportunity”, - the source said………………………………………..Full Article: Source

Oil Fund’s relations with budget of Azerbaijan may change drastically

Posted on 26 June 2014 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) can change the system of relations with the state budget, known as the system of annual transfers. The new format of SOFAZ ties is still considering by government experts.
The article is disseminated only on condition of close subscription. If you are interested, contact with marketing service of news agency Fineko………………………………………..Full Article: Source

Temasek takes stake in Santander custody business

Posted on 26 June 2014 by VRS  |  Email |Print

Singaporean SWF joins with private equity firm Warburg Pincus to buy half of Santander’s custody business - giving the Spanish bank’s balance sheet a welcome boost. Singaporean sovereign wealth fund Temasek has partnered with private equity firm Warburg Pincus to buy 50% of Santander’s custody business in Spain, Brazil and Mexico, in a move set to make the Spanish bank “a leader in the custody business”, Santander said.
Santander already looks after €738 billion in assets under custody in the three countries. The transaction values the business at €975 million and will generate a net capital gain for the Santander Group of approximately €410 million, which will be used to strengthen the balance sheet, the bank said………………………………………..Full Article: Source

India: New measures on card to attract sovereign wealth funds

Posted on 26 June 2014 by VRS  |  Email |Print

Looking to attract larger inflows from sovereign wealth funds and foreign pension funds, central government and financial sector regulators have renewed their efforts to make Indian markets, especially government bonds, much more appealing to such investors.
The government and regulators are of the view that overseas investments by sovereign wealth funds, multilateral agencies, endowment funds, pension funds, insurers and foreign central banks are much more stable in nature, as compared to institutional investors and hedge funds………………………………………..Full Article: Source

KKR Joins Sovereigns Seeking Seoul Skyline Yields

Posted on 26 June 2014 by VRS  |  Email |Print

KKR & Co. bought an skyscraper in downtown Seoul, within walking distance from blocks owned by wealth funds of Azerbaijan and Singapore, as falling bond yields and a revived economy spurs a search for higher returns.
The private-equity firm run by Henry Kravis and George Roberts acquired the K Twin Towers in Seoul this month, after Azerbaijan’s state oil fund spent $447 million for a building in April. Seoul office prices rose 11 percent in the year to April 30, with yields of 5.67 percent, according to Real Capital Analytics Inc. Five-year sovereign yields fell almost half a percentage point to 2.9 percent in 12 months………………………………………..Full Article: Source

Oman Fund Held Talks With Bulgaria About Corpbank Rescue

Posted on 26 June 2014 by VRS  |  Email |Print

Oman’s sovereign wealth fund held talks with the Bulgarian government and central bank on Tuesday about recapitalising Corporate Commercial Bank (Corpbank), Oman’s honorary consul in Sofia told Reuters on Wednesday.
Bulgaria plans to nationalise the bank, which suffered a run on deposits last week and was subsequently taken over by the central bank, if talks with shareholders including Oman fail. That prospect looked the most likely outcome after Prime Minister Plamen Oresharski said on Tuesday that shareholders were “unlikely” to rescue the country’s fourth-largest lender………………………………………..Full Article: Source

Zimbabwe: Delay setting up sovereign fund: IMF

Posted on 26 June 2014 by VRS  |  Email |Print

The International Monetary Fund is recommending that Government delays the introduction of the Sovereign Wealth Fund saying it will add more fiscal stress to already strained accounts as the institution warned that fiscal under-performance remains the highest risk facing the economy.
In the full Article IV Concluding Statement seen by this paper, the IMF directors recommended delaying the introduction of the Sovereign Wealth Fund. “Although such a mechanism might be helpful over the medium term, the present situation of fiscal stress requires that the Government avoid imposing on itself new administrative and managerial challenges. The mission encourages the authorities to re-examine the fiscal regime for extractive industries before launching any SWF.”……………………………………….Full Article: Source

Nigeria: NSIA Rakes in N1.2 Billion By Investing 20 Percent of SWF

Posted on 26 June 2014 by VRS  |  Email |Print

As a result of its investment strategies, the Nigerian Sovereign Investment Authority (NSIA) has revealed that it earned N1.2 billion as at the end of the first quarter of 2014 by investing only 20 per cent of the Sovereign Wealth Fund (SWF).
The agency stated that its first quarter 2014 performance was wholly in line with its projections. The Managing Director, NSIA, Mr. Uche Orji, who revealed this while briefing the media in Lagos also said that the agency’s audited net profit for the period stood at N1.2 billion. He pointed out that with the changing interest rate landscape in key global markets, the NSIA would be adjusting its asset allocation strategies to take advantage of inherent benefits………………………………………..Full Article: Source

Sovereign Wealth Fund Records Modest Q1 Outing

Posted on 26 June 2014 by VRS  |  Email |Print

Buoyed by its humble performance at the end of its first full year of operation, the management of the Nigerian Sovereign Investment Authority (NSIA) at the weekend announced a net profit of N1.2 billion for its operations in the first quarter of 2014, which is more than double the N525 million reported for the whole of last year.
The NSIA, which started out with seed funding of $1 billion from the federal and state governments, reported the 2013 profit on the back of a total investment income of N1.466 billion………………………………………..Full Article: Source

Mideast SWFs To Boost Emerging Markets Exposure

Posted on 26 June 2014 by VRS  |  Email |Print

Buoyed by oil prices above $100 a barrel and a growing confidence in the global economy, sovereign wealth funds in the Middle East expect to receive more funding this year, providing them with extra financial firepower to raise their investments into emerging markets and asset classes such as private equity and real estate, according to an Invesco study.
Latin America, Africa and China are likely to be the main beneficiaries of the continuing shift towards emerging markets by the world’s sovereign funds despite their historical preference for developed markets such as the United Kingdom, Invesco said in its survey of 52 sovereign investors who collectively manage $5.7 trillion in assets………………………………………..Full Article: Source

Bullish sovereign funds will look to emerging markets, says survey

Posted on 26 June 2014 by VRS  |  Email |Print

Middle East sovereign wealth funds will remain focused on emerging markets as they seek long term growth from India, Africa and Latin America, a new study has found. Alternative investments, including property and private equity will also figure largely, according to the Invesco Global Sovereign Asset Management Study from the US-based investment management company.
About 54 per cent of Middle East sovereign investors, which includes sovereign wealth funds (SWFs), state pension funds, central banks and government ministries, will increase their funding levels this year, driven by strong country surpluses and government support………………………………………..Full Article: Source

Over $6t sovereigns to drive home market growth

Posted on 26 June 2014 by VRS  |  Email |Print

Invesco first Invesco Global Sovereign Asset Management Study, an in-depth report offers insight into the complex investment behaviour of sovereign investors across the globe.
The unique study, which provides a framework to help understand the investment preferences and strategy of these funds, shows that the biggest growth story among global sovereigns today is an increase in a so-called ‘public-private partnership’ investment approach. An approach, which sees commercially, minded sovereigns seeking direct strategic investment in private companies to support GDP, job creation and skills transfer………………………………………..Full Article: Source

How Alberta turned its Heritage Fund into a cash machine for big-spending politicians

Posted on 26 June 2014 by VRS  |  Email |Print

Alberta’s Heritage Savings Trust Fund stands as an excellent example of how governments waste opportunity, fritter away money and undermine the long-term interests of taxpayers, even as they claim to be working in the public interest.
On Tuesday the Fund revealed it earned $2.1 billion last year, a record 16% return on investment, and now has $17.5 billion in the kitty. This was treated as a triumph by provincial leaders………………………………………..Full Article: Source

Norway’s $890 Billion Fund Gears Up to Expand in Real Assets

Posted on 25 June 2014 by VRS  |  Email |Print

Norway’s $890 billion sovereign wealth fund, the world’s biggest, is building up its organization and preparing for a move into infrastructure and private equity, its chief executive officer said.
The fund, in a strategy document released yesterday, revealed it was boosting its staff by about 60 percent over the next three years to tackle increased investments in real estate and said it’s preparing for more investments in assets “with income streams that grow in line with the global economy.”……………………………………….Full Article: Source

Norway’s oil fund to take bigger stakes in companies

Posted on 25 June 2014 by VRS  |  Email |Print

Norway’s $890bn oil fund is accelerating its push to become a more active investor as the world’s biggest sovereign wealth fund said it would double the number of companies it owned big stakes in over the next three years.
In its 2014-2016 strategy published on Tuesday, Norges Bank Investment Management, the manager of the oil fund, showed how it would deal with the challenges of its ever-increasing size, having tripled its assets since 2007………………………………………..Full Article: Source

Why a £520bn oil fund could give your portfolio an extra kick

Posted on 25 June 2014 by VRS  |  Email |Print

Which country has the largest sovereign wealth fund? The UK? Germany? Guess again… with just a population of four million people, it’s Norway. Norges Bank Investment Management has benefited from the country’s vast oil wealth, tripling its assets under management (AUM) since the financial crisis to $888bn.
To ensure that it can cope with the surge of inflows, it has announced that it will expand its mandate to invest more actively in both bonds and equities over the next years, which some experts believe could provide a boost for two markets in particular. Managers of the fund will widen its mandate to include frontier markets for the first time and will more than double the number of large companies it has more than 5 per cent in – from 45 to 100……………………………………….Full Article: Source

Norwegian SWF plans $27bn expansion into real estate

Posted on 25 June 2014 by VRS  |  Email |Print

Norges Bank Investment Management (NBIM), the arm of Norway’s central bank responsible for managing the country’s $884 billion sovereign wealth fund, is set to establish a global real estate investment team to invest $27 billion over the next three years in private real estate.
NBIM today released its strategy through to 2016, saying the size of the management company will grow from 370 today to 600 over the period, including 200 dedicated to real estate investment. The majority of new hires, it said, will be investment professionals in the fund’s international offices………………………………………..Full Article: Source

Norway’s SWF Lays Out Three-Year Strategic Plan

Posted on 25 June 2014 by VRS  |  Email |Print

Norway’s $888 billion sovereign wealth fund plans to bring more of its real estate portfolio under in-house management as part of a move to broaden its portfolio. Laying out its plan for 2014-16 in a strategy report published this morning, Norges Bank Investment Management (NBIM)—the group responsible for the management of the Government Pension Fund Global—said it would add “new frontier markets” to its equity portfolio, as well as include more currencies in its fixed income allocation and take larger stakes in companies.
NBIM said it planned to invest 1% of the fund a year—roughly equal to $9 billion according to the fund’s current size—into private real estate markets between 2014 and 2016. The group also stated its intention to take on full ownership of more property investments………………………………………..Full Article: Source

World’s largest sovereign wealth fund to hike NYC holdings

Posted on 25 June 2014 by VRS  |  Email |Print

Norway’s sovereign wealth fund, already a major investor in New York City real estate, is looking to grow its sizable property portfolio over the next three years. The world’s largest sovereign wealth fund plans to invest 1 percent of its overall portfolio, or about $9 billion, in the private real estate market in each of the next three years, the New York Times reported.
Real estate now accounts for roughly 1.2 percent of the fund’s overall portfolio. But under Norway’s current government guidelines, that portion can be expanded to as much as 5 percent. The planned investment expansion will be concentrated in New York, Washington and Boston in the U.S., as well as Paris, the fund told the Times………………………………………..Full Article: Source

Director of Azerbaijan’s Oil Fund elected to Supervisory Council of VTB Bank

Posted on 25 June 2014 by VRS  |  Email |Print

The executive Director of the State Oil Fund of Azerbaijan (SOFAZ) has been elected to Supervisory Council of VTB Bank. According to the Fund, such decision was taken at the General Meeting of the Bank’s shareholders held on June20, 2014 in St. Petersburg, Russia.
“Shahmar Movsumov was re-elected as an independent member of the Supervisory Council of VTB Bank OJSC”, - the Bank informs. In 2013 SOFAZ purchased newly issued shares by the VTB Bank OJSC in the amount of USD 500 million and acquired 2.99 % of total shares of the Bank………………………………………..Full Article: Source

NSIA Rakes in N1.2bn by Investing 20% of SWF

Posted on 25 June 2014 by VRS  |  Email |Print

As a result of its investment strategies, the Nigerian Sovereign Investment Authority (NSIA) has revealed that it earned N1.2 billion as at the end of the first quarter of 2014 by investing only 20 per cent of the Sovereign Wealth Fund (SWF). The agency stated that its first quarter 2014 performance was wholly in line with its projections.
The Managing Director, NSIA, Mr. Uche Orji, who revealed this while briefing the media in Lagos also said that the agency’s audited net profit for the period stood at N1.2 billion. He pointed out that with the changing interest rate landscape in key global markets, the NSIA would be adjusting its asset allocation strategies to take advantage of inherent benefits………………………………………..Full Article: Source

Heritage Fund earns $852 million more than expected in 2013

Posted on 25 June 2014 by VRS  |  Email |Print

The Alberta Heritage Savings Trust Fund earned $2.1 billion in interest in 2013-14, with a record 16-per-cent return on investment. The heritage fund is Alberta’s long-term savings account. It currently holds roughly $17.5 billion. Established in 1976, it was originally meant to save non-renewable resource revenue for future generations.
In recent years, the government has transferred most of the interest to general revenues to be spent. In total, interest from the fund has contributed roughly $36.5 billion to pay Alberta’s annual expenses. Over the next three years, however, the money taken out of the fund will be gradually reduced to zero………………………………………..Full Article: Source

Alberta heritage fund earned $2.1B in 2013-14

Posted on 25 June 2014 by VRS  |  Email |Print

The Alberta government says its nest egg earned $2.1 billion in the last fiscal year — a 16 per cent rate of return. The value of the Heritage Savings Trust Fund now sits at $17.5 billion.
Most of the money earned is being moved into general revenue to pay for government programs. Just under $200 million is being kept in the fund, as required by law, to protect against inflation………………………………………..Full Article: Source

Sovereign wealth funds: Investing for the unforeseeable future

Posted on 24 June 2014 by VRS  |  Email |Print

Sovereign wealth funds control about $30tn, so knowing what they are doing or planning to do is very important for asset managers. Acquiring that information is difficult, however, since hugely rich entities mostly accountable only to their national governments do not tend to be particularly chatty.
The second annual Invesco sovereign asset management survey offers a few insights, in particular that sovereign funds are expecting strong flows of new money as government surpluses allow increased contributions. They also expect to use that new money to build their strategic asset allocations………………………………………..Full Article: Source

What Sovereign Wealth Funds Think Now

Posted on 24 June 2014 by VRS  |  Email |Print

Sovereign wealth funds–charged with preserving the accumulated fortunes of their home nations–are well known for their opaque, tightly-guarded investment decisions. Shining a light behind their closed doors isn’t easy. But U.K. asset manager Invesco has attempted to provide a glimpse at what these behemoth funds are thinking, and has compiled a second-annual survey of 52 sovereign investors.
The thick report is full of intriguing statistics, but perhaps the biggest reason to pay attention is the simplest: the investors interviewed control, and deploy, enormous amounts of money. The group surveyed manages a mind-boggling $5.7 trillion of assets, an amount on par with the collective economic output of Germany and the U.K. combined………………………………………..Full Article: Source

Sovereign wealth funds like alternatives

Posted on 24 June 2014 by VRS  |  Email |Print

Sovereign wealth funds have increased allocations to alternative investments in the past year and expect to continue doing so in 2014, according to a study. The Invesco Global Sovereign Asset Management Study suggests this continued appetite for alternatives is a structural trend driven by the influence of allocating assets strategically, rather than a short-term shift due to tactical allocations to boost short-term returns.
First, many sovereign investors remain underweight in alternatives relative to their strategic asset allocation targets. These sovereign investors had increased their target allocations for alternatives in the last five years and had yet to reach these targets………………………………………..Full Article: Source

Emerging markets pull in sovereign investors

Posted on 24 June 2014 by VRS  |  Email |Print

Invesco’s new study reveals that sovereign funds are increasingly attracted to alternatives and markets such as Africa and Latin America. Sovereign investors are increasing their allocations to emerging markets and alternatives, according to a new study by Invesco.
The Invesco Global Sovereign Asset Management Study, which is in its second year, is based on surveys with more than 50 sovereign investors including central banks, sovereign wealth funds and government pension funds………………………………………..Full Article: Source

SWFs still allocating new money to alternatives, emerging markets

Posted on 24 June 2014 by VRS  |  Email |Print

Sovereign wealth funds are stepping up their investment in alternatives as well as in emerging markets, according to a new survey. Invesco’s latest annual Global Sovereign Asset Management study showed that, in 2013, alternative investments were still the asset classes receiving the highest new asset allocations from sovereign investor portfolios, continuing the trend from the year before.
It said 51% of sovereign investors raised their new exposure to real estate in 2013, and 28% lifted their new investment to private equity, relative to their whole portfolio………………………………………..Full Article: Source

Luye Pharma, Owners Seek Up to $764 Million From Hong Kong IPO

Posted on 24 June 2014 by VRS  |  Email |Print

Luye Pharma Group Ltd., a Chinese drugmaker backed by Singapore’s sovereign wealth fund, and existing owners are seeking to raise as much as $764 million from a Hong Kong initial public offering.
The company and its investors are selling 999.6 million shares at HK$5.38 to HK$5.92 each, according to terms for the deal obtained by Bloomberg News. The shareholders include GIC Pte as well as Chinese private equity firms CDH Investments Fund Management Co. and Citic Private Equity Funds Management Co., the terms show………………………………………..Full Article: Source

Reforms open up opportunities in Chinese asset management

Posted on 23 June 2014 by VRS  |  Email |Print

China’s efforts to liberalise its currency and open its capital markets are also creating job opportunities for people in the asset management industry. This is particularly true of sales and investment management, recruiters say.
On the institutional side, investors such as the China Investment Corporation, the world’s fourth largest sovereign wealth fund, as well as the National Council for Social Security Fund, are diversifying offshore and increasingly outsourcing their portfolios to external managers………………………………………..Full Article: Source

Investors counting on property boom despite house price warning

Posted on 23 June 2014 by VRS  |  Email |Print

Survey finds sovereign wealth funds are placing more funds in property even though IMF has warned housing is overvalued. Global investors are betting on a substantial property boom despite warnings that housing in many countries is already overvalued.
According to a large study, sovereign wealth funds are seeking to boost returns by placing a larger proportion of their funds than last year in property, infrastructure projects and emerging markets. More than half of respondents said they increased their property portfolios to benefit from a long-term rise in land and real estate values in developed- and developing-world markets. The survey, by fund manager Invesco, found that while safer assets in the west remained the first choice of investors, the demand for bigger returns had accelerated investments in riskier assets………………………………………..Full Article: Source

Sovereign wealth funds ramp up alternatives exposure

Posted on 23 June 2014 by VRS  |  Email |Print

Sovereign wealth funds are increasingly investing new allocations to alternative asset classes, figures from the second annual Invesco Global Sovereign Asset Management Study show. The study was conducted amongst more than 50 individual sovereign investors across the globe, representing US$5.7 trillion of assets.
Alternative investments remain the clear asset class winners in terms of new asset allocation within sovereign investor portfolios, mirroring the trend reported in the 2013 study………………………………………..Full Article: Source

Middle East investors target old Scotland Yard hotel as next trophy asset

Posted on 23 June 2014 by VRS  |  Email |Print

Sovereign wealth funds from Kuwait and Qatar are in talks with a London developer over the acquisition of the original Scotland Yard headquarters, which is being transformed into a £10,000-a-night luxury hotel.
The Galliard Group confirmed to The Telegraph that its chief executive, Stephen Conway, has met individuals from the Middle East over the last few months, who have shown interest in buying the historic building once construction has been completed in 2016, thought to be worth £200m………………………………………..Full Article: Source

Nigeria: Sovereign Wealth Fund yields N1.2bn profit in Q1

Posted on 23 June 2014 by VRS  |  Email |Print

The Nigeria Sovereign Investment Authority has announced a profit of N1.2bn from its investment of the Sovereign Wealth Fund for the first quarter of this year, up from the N525m made in the 15-month period ended December 31, 2013.
In what may be considered a justification of the decision of the Federal Government to set up the SWF to save some portion of the money realised from the sale of crude oil, the NSIA also expressed optimism that it would match if not surpass the first quarter profit margin when the result of the second quarter audit was ready………………………………………..Full Article: Source

China’s CIC Vows to Improve Management After Irregularities Uncovered

Posted on 20 June 2014 by VRS  |  Email |Print

China Investment Corp., the nation’s sovereign-wealth fund, said Thursday that it plans to improve the management of its overseas investments after it was publicly criticized by the government’s auditing agency for a string of irregularities that led to unspecified losses.
China’s National Audit Office said Wednesday that CIC was found to have management shortcomings that resulted in overseas losses on six projects between 2008 and 2012. The extent of the losses wasn’t given. The auditing agency blamed the losses at CIC on dereliction of duty by management, insufficient due diligence and poor post-investment management……………………………………….Full Article: Source

Audits hit home at CIC

Posted on 20 June 2014 by VRS  |  Email |Print

China Investment Corp, the nation’s US$575 billion (HK$4.48 billion) sovereign wealth fund, said it is improving how it manages overseas investments after state auditors said mismanagement led to losses. The fund has drafted plans to rectify issues identified by the National Audit Office, analyzed the causes, and is amending related mechanisms and procedures, Beijing-based CIC said.
CIC will also strengthen due diligence for overseas deals and enhance post-investment management, and standardize the selection of external managers. An audit last year found dereliction of duty by managers and inadequate due diligence and management in 12 investments made abroad between 2008 and 2013, leading to losses………………………………………..Full Article: Source

$5b-plus irregularities at China fund, banks

Posted on 20 June 2014 by VRS  |  Email |Print

Irregularities amounting to more than $5 billion have been found at China’s sovereign wealth fund and two large state-owned banks, according to the state auditor, offering a glimpse into the opaque management of government-controlled firms.
China Investment Corporation (CIC), Bank of China and Agricultural Development Bank of China violated regulations in areas including asset selling, loan issuance and fraudulent invoicing, according to the National Audit Office (NAO). “The audit found CIC breached rules on overseas investment and risk control, domestic subsidiaries operation and financial management,” the NAO said in a statement………………………………………..Full Article: Source

Closer Look: Audit of CIC Shows Its Corporate Governance Must Be Enhanced

Posted on 20 June 2014 by VRS  |  Email |Print

China Investment Corp. (CIC), the country’s US$ 575 billion sovereign wealth fund, has been blamed by the state auditor for flaws in its management of both domestic and overseas investment projects, leading to losses. On June 18, the National Audit Office issued a report on CIC’s operations in 2012. It criticized CIC for a series of irregularities in investment assessments, subsidiary operations, and personnel and financial management.
Internal and external supervision are crucial for a sovereign wealth fund like CIC. The auditor’s report rings the alarm and should prompt the sovereign wealth fund to reexamine itself. However, assessing the investment performance of a sovereign wealth fund is not straightforward………………………………………..Full Article: Source

China SWF’s Latest Investment Pick: Agriculture, Food

Posted on 20 June 2014 by VRS  |  Email |Print

China Investment Corp. (CIC), China’s $650 billion sovereign wealth fund, is shifting some of its allocation to agriculture. “We believe the agriculture sector offers stability, a way of hedging against inflation and a device for spreading risk,” CIC’s CEO Ding Xuedong wrote in the Financial Times.
“We are keen to invest more across the entire value chain—in partnership with governments, multilateral organizations and like-minded institutional investors—in areas that will help to unlock the industry’s potential, increase the food supply and offer attractive returns.”……………………………………….Full Article: Source

Philippines DTI courts Norway SWF and investors

Posted on 20 June 2014 by VRS  |  Email |Print

The trade department has invited Norwegian businessmen to increase investments in the Philippines. “We [Department of Trade and Industry officials] met with Norwegian government officials that manage the fund and we encouraged them into investing more here and increase their exposure in the Philippines,” said Trade Secretary Gregory L. Domingo in a chance interview with reporters on Wednesday.
Domingo noted that Norway possesses the largest sovereign wealth fund, the Norwegian Government Pension Fund-Global (SPU), and the Philippines stands to gain from more investments as the Nordic country already has substantial investments in blue-chip companies, through the said fund………………………………………..Full Article: Source

Warburg, Temasek Buying 50% of Banco Santander’s Custody Business

Posted on 20 June 2014 by VRS  |  Email |Print

Grupo Financiero Santander Mexico, S.A.B. de C.V. announced that its parent company, Banco Santander, S.A. has entered into a definitive agreement with FINESP Holdings II B.V, an affiliate of Warburg Pincus, a private equity firm focused on growth investing, to create a leader in the custody business.
As per the terms of the agreement, which is conditional upon legal and regulatory approvals, the group which will also include Temasek, a Singapore based investment company, will acquire a 50% stake in Santander’s current custody operations in Spain, Mexico and Brazil. The remaining 50% will be owned by Santander. The transaction is expected to close in the fourth quarter of 2014………………………………………..Full Article: Source

Alaskan Fund Ups Commitment to Single-Family Rental Purchases

Posted on 20 June 2014 by VRS  |  Email |Print

The Alaska Permanent Fund Corp. entered into a limited liability company agreement with American Homes 4 Rent to form American Homes 4 Rent II LLC (to acquire, renovate and lease additional single-family residential properties in the United States.
The fund has an 80% capital interest in the new company with American Homes the remaining 20%. The two will initially fund the new firm with $50 million. The maximum term of the new company is six years at which time any unsold properties will be sold………………………………………..Full Article: Source

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June 2014
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