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Sovereign Wealth Funds Briefing 05.Aug 2014

Posted on 05 August 2014 by VRS |  Email |Print

Sweeping reforms have increased the opportunity for foreign investors to develop Myanmar’s 11.8 trillion cubic feet of natural gas and 50 million barrels of crude oil, potentially worth more than US$60 billion over the next 30 years. This anticipated influx of investment in the petroleum sector raises concerns that Myanmar should implement resource management strategies to mitigate problems generally associated with the “resource curse”.
The resource curse is a paradox that refers to countries with an abundance of natural resources counterintuitively experiencing negative economic growth for a variety of reasons, including government mismanagement and declining economic competitiveness………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Australia’s Future Fund has reached $101 billion on Monday, exceeding the $100 billion mark at the end of June after its investment returns for the 2013-14 financial year yielded $12 billion. Former Treasurer Peter Costello established the fund in 2006. Since then and despite the global financial crisis in 2008, the fund enjoyed an average nominal annual growth rate of 7.1 per cent, just slightly lower than its 7.2 per cent target.
Costello, the chairman of the fund, said that during the fund’s early days when the investment climate was challenging, resulting in returns yielding lower than the company’s target range. However, he pointed out that disciplined adherence to clear objectives resulted in good growth rates over the long term………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

A lack of budget surplus contributions to the Future Fund could see it come up short in meeting federal public service superannuation liabilities, The Australian reports. Yesterday the Future Fund announced returns in fiscal 2014 that far exceeded the target rate, but the government’s super liabilities for 2020 – when the Fund is due to start paying out – are on track for $200 billion, well above the current $101bn size of the Fund.
Future Fund chairman Peter Costello said the fund had no control over future liabilities, but more funds from the government would be welcomed. “We have had six years of no contributions and if you are asking me whether it would have been nice to have had some contributions, yes, of course it would be nice to have some contributions,’’ Mr Costello told The ­Australian………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

The Superannuation Fund’s rejected the Green Party’s call to divest from Israeli companies - until their country ends its strikes on Gaza. Just over $7 million is invested in 38 Israeli companies and the Super Fund plans to keep it there for now.
It’s investigating one of the companies over its supply of chemical white phosphorous but the rest, it says, are working within Israeli and international law. But the Super Fund says it could review the appropriateness of those investments if the UN or our government orders sanctions or an arms embargo, and a company defies those………………………………………..Full Article: Source

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Singapore government-owned investment firm Temasek Holdings is bullish on India story. The firm is learnt to have been scouting for unlisted companies, especially in consumer goods and healthcare sectors.
According to Temasek, the last year was one of the best years after the financial crisis in terms of investments that it made. Media reports suggest that with new government at the Centre, focused to revive growth, Temasek too, like other foreign funds, could pump in more money into the country this fiscal than in the past year……………………………………….Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

The GIC is not managing the Special Singapore Government Securities (SSGS) or CPF monies on their own, but a combined pool of Government funds including a significant sum of unencumbered assets, said Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam on Monday (Aug 4).
“That is why the GIC’s mandate is to take calculated investment risks aimed at achieving good, long-term returns on the Government’s funds, without regard to the Government’s liabilities,” he said. Speaking in Parliament, Mr Tharman added that the only way to avoid fluctuations in the value of Singapore’s reserves is to avoid taking investment risk. This could include, for instance, investing all of Singapore’s assets in cash-like instruments………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Singapore’s sovereign wealth fund has for a second consecutive year undershot two performance indicators and forecast a decade of weak financial market returns. The Government Investment Corporation’s (GIC) annualised nominal return in US dollars was 12.4% over five years, 7% over 10 years and 6.5% over 20 years in the financial year to March 31.
Although the 10-year return was 30 basis points higher versus a reference portfolio used to indicate performance, the five-year return undershot by 150 basis points and the 20-year return was 70 basis points lower………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Singapore’s GIC, one of the most active sovereign wealth funds in India, upped its exposure to private equity as an asset class besides bonds and emerging markets equities for the year ended March 31, 2014, as per its annual report.
As per the report, GIC cut its exposure to developed economy equities to 29 per cent, from 36 per cent during the same period. Development market equities which used to be the single biggest class for GIC in FY13 fell below bonds last year. The sovereign fund also upped its exposure to inflation-linked bonds last year………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Singapore sovereign wealth fund GIC, which manages more than $100 billion of the city-state’s foreign reserves, on Saturday warned of a tough investment outlook over the next decade as global central banks withdraw ultra-easy monetary policies.
GIC said the prices of all major asset classes have been inflated by the massive stimulus measures, and now face weak future returns. “Global financial markets have been recovering strongly from the 2008/09 global financial crisis, supported by low interest rates and unconventional monetary policies,” GIC said in its annual report………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Grupo BTG Pactual, Brazil’s only publicly traded independent investment bank, is partnering with shareholder Abu Dhabi Investment Council to expand its reinsurance business, said Chief Executive Officer Andre Esteves.
BTG and the sovereign fund will each take a 50 percent stake in Ariel Re, the reinsurance unit that BTG has said it’s acquiring from Global Atlantic Financial Group Ltd., Esteves said in an interview. BTG announced the acquisition of Ariel Re on July 10, without disclosing its partner or financial terms. Abu Dhabi Investment Council bought a stake in BTG in December 2010, before BTG’s initial public offering in 2012, Esteves said………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

When Astana launched its sovereign-wealth fund in 2008, authorities asserted that Samruk-Kazyna would modernize Kazakhstan’s economy and help attract foreign investors. Six years later, critics say the fund is bloated and lethargic, and privatization plans are stoking concerns among employees and analysts.
Modeled after Malaysian and Singaporean funds, Samruk-Kazyna is a central pillar in President Nursultan Nazarbayev’s economic and political system. The fund exerts influence over almost 600 state companies involved in, among other things, oil and gas (KazMunayGaz), railways (Kazakhstan Temir Zholy), telecoms (Kazahtelecom), energy (Kazatomprom), the state air carrier (Air Astana) and the postal service (Kazpochta). Last year it announced approximately $3.5 billion in profits. Overall, Samruk-Kazyna accounts for roughly 45 percent of Kazakhstan’s economy, Larissa Zyamzina, an advisor to the head of the fund, told business magazine Delovoi Kazakhstan in June………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

Mid Europa Partners, the largest private equity group in central and eastern Europe, has raised €810m for its fourth fund – half the amount it raised before the financial crisis – as investors take a cautious view on the region amid mounting tensions between Russia and the west.
The arrangement, dictated by a handful of Asian and Middle Eastern sovereign wealth funds that have taken large positions in the new fund, means Mid Europa will have up to €1.5bn in total to spend on acquisitions across countries including Poland, the Czech Republic and Slovakia. It does not invest in Ukraine………………………………………..Full Article: Source

Posted on 05 August 2014 by VRS |  Email |Print

California Public Employees’ Retirement System (CalPERS) and UBS Global Asset Management (Americas) Inc. (UBS” have formed a strategic infrastructure partnership, Golden State Matterhorn, LLC (GSM LLC), to pursue infrastructure investment opportunities across core, OECD markets. CalPERS and UBS have made capital commitments of USD 485 million and USD 15 million, respectively, to the partnership.
UBS will be the managing member and it will utilize the services of Infrastructure Asset Management (IAM), an investment area within UBS Global Asset Management’s Infrastructure and Private Equity business unit. IAM originates and manages direct investments in infrastructure assets globally on behalf of institutional investors from around the world. The team includes senior executives who have been active in the infrastructure and related sectors since the early 1990s. (Press Release)

Posted on 05 August 2014 by VRS |  Email |Print

Forecasting suggests that this year’s Permanent Fund Dividend is expected to rise significantly. KDLG’s Chase Cavanaugh has more on the market analysis. The Anchorage Economic Development Corporation predicts that the declining dividends in the Alaska Permanent Fund are expected to reverse this year.
Established in 1976, the Permanent Fund sets aside oil revenues in a dedicated place for future generations. Part of this program is an annual dividend paid to Alaska residents, last year’s totaling $900 per individual. Bill Popp is AEDC’s CEO, and he says this year’s dividend will increase significantly………………………………………..Full Article: Source

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