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Sovereign Wealth Funds Briefing - Archive | June, 2015

Abu Dhabi Fund Boosts Mining Deals With Trafigura Venture

Posted on 30 June 2015 by VRS  |  Email |Print

Abu Dhabi-backed investment fund Mubadala Development Co. is buying a 50 percent stake in Trafigura Beheer BV’s Spanish copper business as part of an agreement to create a joint venture to invest in base metals mining.
Mubadala will purchase the stake in the commodity trader’s flagship Minas de Aguas Tenidas operations, which include three mines and processing facilities in southern Spain, the companies said Monday in a joint statement. Mubadala paid about $500 million, according to a person familiar with the matter, who asked not to be named because the price isn’t public………………………………………..Full Article: Source

President gazettes wealth fund Statutory Instrument

Posted on 30 June 2015 by VRS  |  Email |Print

President Mugabe has gazetted a Statutory Instrument that gives effect to the Sovereign Wealth Fund that is expected to go a long way in reserving income from the country’s finite mineral resources for the benefit of future generations. The gazetting of the SI followed the gazetting of the Sovereign Wealth Fund of Zimbabwe Act (SWFZA) in November last year.
“His Excellency the President, in terms of section 1 (2) of the Sovereign Wealth Fund of Zimbabwe Act (Chapter 22:20) (No. 7 of 2014), hereby fixes the date of publications of this Statutory Instrument, as the date on which the said Act shall come into operation,” reads the Extraordinary Government Gazette published………………………………………..Full Article: Source

Chinese Fund Vies for German Gas-Station Operator

Posted on 30 June 2015 by VRS  |  Email |Print

China Investment Corp. is in the running to buy a German highway rest-stop and gasoline-station company that could be valued at about €3 billion, or $3.35 billion, which would be by far the largest Chinese acquisition in Germany, according to people familiar with the matter.
The potential bid is the latest sign of the sovereign wealth fund’s ambitions to boost direct investments in overseas assets. U.K.-based private-equity firm Terra Firma Capital Partners bought Tank & Rast in 2004 for €1 billion from investors led by Allianz Capital Partners, Apax Partners and Lufthansa………………………………………..Full Article: Source

China to transfer $322 billion in pension funds to NSSF

Posted on 30 June 2015 by VRS  |  Email |Print

The Chinese government will reportedly centralise management of about 2 trillion RMB (US$322 billion) in local authority retirement assets under the supplementary pension supervisory body, the National Council for Social Security Fund (NSSF). Reuters cited industry sources as saying that China’s State Council would transfer local pension assets to the NSSF.
The move is part of a broader initiative to strengthen China’s pension system in order to meet demographic challenges posed by a shrinking working-age population. Under the current retirement system, 90% of local authority pension funds are placed in bank deposits with low single-digit returns. In comparison, the NSSF is allowed to invest up to 40% of its AUM into equities………………………………………..Full Article: Source

Brigade-GIC to buy Rs550 cr Chennai plot

Posted on 30 June 2015 by VRS  |  Email |Print

Brigade Properties Pvt. Ltd, a joint venture between Brigade Enterprises Ltd and sovereign wealth fund Government of Singapore Investment Corp. Pte Ltd (GIC), is set to buy a 15.8 acre plot in Chennai’s Perungudi area for Rs.550 crore from Kansai Nerolac Paints Ltd, the companies said on Monday.
Brigade Properties has entered into a “term sheet” with Kansai Nerolac, they said. Brigade and GIC entered into a joint venture last year, which invests in and acquires land for residential and mixed-use developments—including shopping malls and offices—in cities in southern India………………………………………..Full Article: Source

Temasek participates in Airbnb’s $1.5bn round

Posted on 30 June 2015 by VRS  |  Email |Print

Singapore’s sovereign wealth fund (SWF) Temasek Holdings has participated in home-rental service Airbnb Inc’s latest venture round, in which it raised $1.5 billion from 12 private equity firms. The deal values Airbnb at $25.5 billion, according to the report from the Wall Street Journal.
This new valuation places Airbnb as third in value behind similar venture-capital backed corporations valued at $1 billion or higher, like Chinese smartphone maker Xiaomi Corp. and US-based transport firm Uber. Airbnb’s revenue is expected to exceed $900 million for FY2015 and projected to reach $10 billion by 2020. For comparison, FY2013 saw it earn revenues of $250 million………………………………………..Full Article: Source

NZ super loses direct head, wins performance kudos

Posted on 30 June 2015 by VRS  |  Email |Print

The New Zealand Superannuation Fund (NZS) is searching for a new head of NZ direct investments following the resignation of incumbent, Michael Gleissner, last week. Gleissner, who joined NZS two years ago, “is leaving to focus on family commitments and consulting activities”, a spokesperson for the almost $30 billion fund said.
Until a replacement is found, Matt Whineray, NZS chief investment officer, would assume Gleissner’s responsibilities, the spokesperson said. The NZ Direct team manages NZS investments in Kaingaroa Timberlands, rural land, Datacom and Metlifecare………………………………………..Full Article: Source

Canada’s Ivanhoe invests in Chinese warehouses

Posted on 30 June 2015 by VRS  |  Email |Print

The real estate arm of Canada’s second-largest pension fund said on Monday it will invest up to $180 million in Chinese warehouse properties, joining other institutional investors that are seeking to profit from China’s burgeoning e-commerce sector.
Ivanhoe Cambridge, part of the C$225.9 billion ($182.49 billion) Caisse de depot et Placement du Quebec fund, said it has launched a venture with U.S. real estate investor CBRE Global Investments to invest in LOGOS China Logistics Club, which owns and develops warehouse properties in hubs serving large Chinese cities. The Caisse joins Singapore sovereign wealth fund GIC and the Canada Pension Plan Investment Board in targeting China’s growing, yet fragmented logistics market………………………………………..Full Article: Source

Swedish investors attack governance record of Norway’s oil fund

Posted on 29 June 2015 by VRS  |  Email |Print

Norway’s oil fund has come under attack from several of Sweden’s largest investors over concerns that the world’s biggest sovereign wealth fund is not applying rigorous oversight to the companies it invests in. The criticism levelled at Norges Bank Investment Management (NBIM), which manages the oil fund’s $912bn of assets, comes in response to its perceived indifference to one of the biggest financial scandals in Sweden in recent history.
The scandal, which has tarnished Sweden’s image as a haven for ethical business practices, revealed corruption around expense claims and the misuse of corporate jets at SCA, the paper company………………………………………..Full Article: Source

China to let NSSF manage $322 billion in local pension funds

Posted on 29 June 2015 by VRS  |  Email |Print

China’s cabinet has approved plans for the manager of the country’s biggest pension fund to manage pension funds worth about 2 trillion yuan ($322 billion) for local authorities, two industry sources with direct knowledge of the matter said. China is trying to strengthen its pension system to meet the huge demographic challenge of an already-shrinking working-age population as it looks to turn the economy into one driven by consumption and services rather than investment and exports.
The move for the National Social Security Fund (NSSF) to manage and invest more pension funds on behalf of provincial authorities could benefit the stock market, which has fallen 20 percent over the last two weeks………………………………………..Full Article: Source

China’s Silk Road infrastructure fund explores investment exit strategies

Posted on 29 June 2015 by VRS  |  Email |Print

China’s US$40 billion Silk Road infrastructure fund will use stock market listings and government transfers as exit strategies for divesting, in order to ensure financial returns from its investments, its chairwoman says. “When we make an investment decision, we will design an exit channel for it,” Jin Qi, the fund’s chief executive, told the Lujiazui Forum in Shanghai yesterday.
Capricious policymaking in those countries could prove a stumbling block to successful investments there, China Investment Corporation president Li Keping told the forum. “In those countries that lack a complete legal system, there will be discretionary policy changes,” the head of the country’s sovereign wealth fund said. ‘Therefore, uncertainties are increasing. Or, to be precise, risks are high.”……………………………………….Full Article: Source

New Zealand Superannuation Fund Hailed As World’s Top Performing Wealth Fund By JPMorgan

Posted on 29 June 2015 by VRS  |  Email |Print

The New Zealand Superannuation Fund has been hailed as world’s top performing wealth fund by JPMorgan. Having generated returns of more than 17 percent a year, the nearly NZ$30 billion New Zealand Superannuation Fund is ahead of all its global counterparts, which have published figures, according to the analysis published in the Financial Times. New Zealand’s Super Fund was set up in 2001 to pay for the costs of superannuation entitlements of New Zealanders.
“The New Zealand fund has a very interesting governance model. It is run by a group called The Guardians, who have a very deep belief in the power of long-term returns”, said Patrick Thomson, global head of sovereign wealth funds at JPMorgan. The last few years have been among the best years the fund experienced, noted Gavin Walker, NZ Super Fund chairma……………………………………….Full Article: Source

Qatar Investment Authority may join race for $1bn Barangaroo tower

Posted on 29 June 2015 by VRS  |  Email |Print

Sydney’s Barangaroo precinct is taking shape as local developers and heavyweight international funds jostle for the last elements of the harbourside urban regeneration project. As Barangaroo South developer Lend Lease and the NSW government last Friday announced the 500th apprentice at the $6 billion office, apartment and leisure precinct, the industry was awash with talk that global real estate trophy-hunter, the Qatar Investment Authority, was targeting the final $1 billion office tower.
While Lend Lease would not be drawn, the developer’s holdings in the area had already been bolstered earlier in the week when plans for a new train station at the neighbouring 5.2-hectare Barangaroo Central area were unveiled. Bidders that were short-listed for the $1bn mixed use precinct welcomed the station………………………………………..Full Article: Source

Alwaleed welcomes wealth fund deal

Posted on 29 June 2015 by VRS  |  Email |Print

A consortium of France’s big companies led by the CDCIC International Capital the International investment arm of Caisse des Depots France’s Sovereign Wealth Fund has announced that they have approved an investment in Kingdom Holding Company (KHC) which is chaired by Prince Alwaleed bin Talal.
The deal constitutes the acquisition of KHC’s shares with a minimum amount of 150 million (SR563 million) subject to increase. The number of shares and acquisition share price will be determined at a time closer to execution. The share price will be based on the trading price of the stock on the Saudi Stock Exchange (Tadawul)………………………………………..Full Article: Source

Sovereign Wealth Funds Active In Hedge Fund Space: Preqin

Posted on 29 June 2015 by VRS  |  Email |Print

Sovereign wealth funds have become increasingly active in the hedge fund space, with a steadily increasing allocation to the asset class, notes Preqin. In its June 2015 Hedge Fund Spotlight report titled: “Sovereign Wealth Funds Investing in Hedge Funds”, Preqin highlights that during stock market volatility, hedge funds offer a favorable alternative in offering uncorrelated returns to traditional markets and opportunities worldwide.
The Preqin report points out that though sovereign wealth funds constitute less than 1% of all investors in hedge funds, they represent about 11% of all capital invested in hedge funds by institutions. As sovereign wealth funds have fewer short-term liabilities, they typically seek investments with a longer investment horizon compared with other institutions. Thus, the twin effect of large ticket sizes and long-term investment horizon of sovereign wealth funds offer a “game changer” opportunity for a hedge fund manager………………………………………..Full Article: Source

Alternative investment growth to boom in next five years

Posted on 29 June 2015 by VRS  |  Email |Print

The alternative investment industry, which includes hedge funds, private equity and real assets, is expected to grow fivefold to at least $13.6 trillion (£8.65 trillion) in the next half decade, professional services firm PwC said in a report released on Sunday.
Fuelled largely by demand by sovereign funds, public pension funds and newly wealthy individual investors for steady and strong investment returns, the alternatives industry is poised for booming growth, PwC consultants wrote. “Alternative asset management will undergo a transformation in the years to 2020 and beyond as it adjusts to a new operating and economic environment and moves toward centre stage,” PwC wrote………………………………………..Full Article: Source

Does Sub-Saharan Africa Need A Sovereign Wealth Fund?

Posted on 26 June 2015 by VRS  |  Email |Print

On June 27, 14 African central bank governors will be meeting in Switzerland to discuss the formation of a sovereign wealth fund that they hope will help cushion member countries in times of commodity price weaknesses, Xinhua reported.
According to the forum organizer, the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) which operates in 14 African countries, the continent has for long been criticized for not taking advantage of its vast natural resource wealth to ensure sustainable growth in its economies and a sovereign fund was one way to ensure this. A sovereign wealth fund is a state-owned investment fund investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds………………………………………..Full Article: Source

Zimbabwe: Huge Task Ahead for SWF Board

Posted on 26 June 2015 by VRS  |  Email |Print

Finance Minister Patrick Chinamasa last week announced the appointment of a board for the Sovereign Wealth Fund (SWF), managed by the National Indigenisation and Economic Empowerment Board (NIEEB) which is currently subject of a Parliamentary enquiry on how it handled several indigenisation deals.
NIEEB, established through the Indigenisation and Economic Empowerment Act enacted in April 2008, is a statutory body that should be funded through fiscal support. Besides the SWF, NIEEB also manages the National Indigenisation and Economic Empowerment Fund (NIEEF), which was reported to be bankrupt about three years ago despite having “a wide array of shares”………………………………………..Full Article: Source

Malaysia fund’s $4.5 bln rescue may weigh on Abu Dhabi’s IPIC

Posted on 26 June 2015 by VRS  |  Email |Print

The $4.5 billion rescue of a struggling Malaysian state fund is good news for the government in Kuala Lumpur but will load Abu Dhabi’s International Petroleum Investment Co with extra debt that may worry investors in its bonds.
Last month IPIC, an investment company owned by Abu Dhabi’s government, came to the aid of Malaysia’s loss-making 1MDB, whose poor record and $11.6 billion of debt are a source of political pressure on Prime Minister Najib Razak. IPIC agreed to provide 1MDB with $1 billion in cash, allowing the Malaysian fund to repay a $975 million loan to a global banking syndicate………………………………………..Full Article: Source

LPC-CVC and Temasek to back Alvogen buy with existing $700 million loan

Posted on 26 June 2015 by VRS  |  Email |Print

European private equity fund CVC and Singaporean sovereign wealth fund Temasek are seeking to keep an existing $700 million leveraged loan financing for Alvogen in place to back their acquisition of a controlling stake in the pharmaceutical firm, banking sources said on Thursday.
CVC and Temasek agreed to buy the stake in a deal valuing the company at around $2 billion, it emerged earlier this week. Existing lenders to Alvogen have been asked to consent to a change of control provision, which would allow the seven-year term loan to remain in place, despite a change in ownership………………………………………..Full Article: Source

Super Fund kudos shows Govt folly

Posted on 26 June 2015 by VRS  |  Email |Print

JPMorgan’s hat tip to the New Zealand Superannuation Fund was PR manna from heaven after all the hoo-haa a few months back over its ill-fated Portuguese excursion. Research by JPMorgan Asset Management found the Super Fund has been the world’s best-performing sovereign wealth fund over the past five years, with annual investment returns of 17 per cent.
It was just what the doctor ordered after February’s revelation that the fund had written off a $200 million loan to Portugal’s Banco Espirito Santo, which collapsed last year. That announcement sparked the kind of bruising media coverage you would expect when a couple of hundred million taxpayer dollars disappear………………………………………..Full Article: Source

President Aliyev approves SOFAZ budget

Posted on 26 June 2015 by VRS  |  Email |Print

President Ilham Aliyev has signed a decree on the budget of Azerbaijan’s state oil fund SOFAZ for 2014. According to the document signed on June 24, the president approved the implementation of the SOFAZ budget with its revenues at over 12.731 billion manats and expenditures at over 10.117 billion manats.
The revenues of the budget were fulfilled at 109.5 percent wile the expenditures at 95.5 percent. SOFAZ, an entity that accumulates and manages Azerbaijan’s oil and gas revenues, was established in 1999 with assets worth $271 million………………………………………..Full Article: Source

How Capitalists Can Do Well While Doing Good

Posted on 26 June 2015 by VRS  |  Email |Print

Sovereign-wealth funds in Norway and New Zealand, as well as pension funds like the California Public Employees’ Retirement System and Denmark’s ATP, integrate ESG into their investment decisions.
But on the whole, marrying financial and ESG measurements is often resisted. Many managers point to their “fiduciary duty”—their obligation to protect their client’s interests. Under existing laws, they say, fiduciary duty is a barrier to using any metric other than financial returns in their investment analysis………………………………………..Full Article: Source

Responsible investment: Vice versus nice

Posted on 26 June 2015 by VRS  |  Email |Print

The movement to divest from fossil fuels has some powerful friends. Last month Norway’s sovereign wealth fund, the world’s biggest, announced that it would sell all its stock in coal companies, following an example set by several big university endowments, such as Stanford’s.
These big asset owners have huge influence over the fund management industry, and this month they were even joined by Pope Francis, whose encyclical on climate change nodded to the power of social boycotts………………………………………..Full Article: Source

Fossil-fuel divestment: No smoking

Posted on 26 June 2015 by VRS  |  Email |Print

The critics are right that it is hard to detect much impact from divestment campaigns on firms’ cost of capital. The first recruits to the fossil-fuel campaign were charities and universities with relatively small investments. Its biggest coup came earlier this year, when Norway’s vast sovereign-wealth fund resolved to sell its investments in coal and the dirtiest forms of oil production.
A few big pension funds, such as PFZW of the Netherlands, have promised to reduce the carbon footprint of their holdings. But the consequences for the share prices or bond yields of the spurned firms, if any, are not discernible amid the far bigger swings attributable to changes in the price of oil, gas and coal……………………………………….Full Article: Source

These are the world’s top 10 largest sovereign wealth funds

Posted on 26 June 2015 by VRS  |  Email |Print

Number 1? Norway’s Government Pension Fund - Global with $882bn worth of assets. Be it China or Qatar, the world’s sovereign wealth funds are snapping up British assets every other day. But which are the world’s top 10 largest sovereign wealth funds? Take a look at this list by Sovereign Wealth Fund Institute.
1. Government Pension Fund - Global. Country: Norway Assets: $882bn Inception: 1990. 2. Abu Dhabi Investment Authority. Country: UAE – Abu Dhabi Assets: $773bn Inception: 1976. 3. SAMA Foreign Holdings Country: Saudi Arabia Assets: $757.2bn Inception: n/a……………………………………….Full Article: Source

Renzi plans shake-up at Italy’s EUR400bn sovereign wealth fund

Posted on 25 June 2015 by VRS  |  Email |Print

Matteo Renzi, Italy’s prime minister, is planning to extend his reformist agenda into Italian business and finance as he seeks a more aggressive mandate for the country’s €400bn sovereign wealth fund in an effort to spur growth and create jobs.
The move by Mr Renzi comes as Italy’s economy showed signs of growth in the first quarter after a three-year recession, buoyed by lower oil prices, a weaker euro and an European Central Bank €60bn-a-month quantitative easing programme. There are also signs structural reform and an increase in foreign investment are starting to have an impact………………………………………..Full Article: Source

Queen’s grant: Treasury still controls sovereign fund not Scots

Posted on 25 June 2015 by VRS  |  Email |Print

Edinburgh’s takeover of Scottish Crown Estate assets may rile the royal household worried for its purse, but a misdirected fight could feed Scots’ republican instincts. The royal household is annoyed and appears to be picking a fight with Scotland’s government over the Queen’s share of the UK’s largest and most valuable property portfolio, the Crown Estate.
The publicly owned property empire, which takes in Ascot racecourse, London’s West End, Highland estates, farms, shopping centres, leisure parks, mining operations and most of the UK’s seabed and coastline, as well as lucrative licences to install wind farms and wave energy machines on the seabed, is worth billions of pounds………………………………………..Full Article: Source

African central bank governors to discuss sovereign wealth funds

Posted on 25 June 2015 by VRS  |  Email |Print

Central bank governors drawn mainly from eastern and southern Africa will meet for a workshop to discuss the leveraging of sovereign wealth funds to establish economic stabilization on the continent. Reserve Bank of Zimbabwe John Mangudya will officially open the forum held in Switzerland on June 27, according to the forum’s organizer, the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), which operates in 14 African countries.
“We are delighted to be hosting our member countries as well as some visiting countries’ central bank governors to discuss this most important issue which will help to establish long-term prosperity on our continent,” Caleb Fundanga, executive director of the MEFMI, told Xinhua Wednesday………………………………………..Full Article: Source

Nigerian Governors : Our problem with ECA, SWF

Posted on 25 June 2015 by VRS  |  Email |Print

State governors yesterday said they were opposed to the continued existence of the Excess Crude Account and the Sovereign Wealth Fund (SWF) because both had been abused by the federal government. The chairman of the Nigeria Governors’ Forum and Zamfara State Governor Abdulazeez Yari, stated this while speaking with reporters after the governors met President Muhammadu Buhari.
Yari said the sum of $10.3 billion was in the Excess Crude Account governors in 2013 when the governor forum became factionalised and sharing of money stopped. However, he said, the governors discovered that the fund, which is being operated by the federal government, declined inexplicably to $2.6 billion last year………………………………………..Full Article: Source

Qatar in $8bn bid to buy Formula One motor racing

Posted on 25 June 2015 by VRS  |  Email |Print

A Qatari investment vehicle is working together with an American company to buy a multi-billion dollar stake in Formula One (F1) racing, according to a report by the Financial Times. Qatar Sports Investments (QSI) and RSE Ventures have teamed up to purchase a 35.5 percent share of F1 from its holding company CVC Capital Partners and the sport’s chief executive Bernie Ecclestone.
QSI is a subsidiary of the Gulf state’s sovereign wealth fund, the Qatar Investment Authority, and its most well-known asset is French football club Paris Saint Germain, which was bought for $130mn in 2012. RSE Ventures is a sports and entertainment company that was founded by 75-year-old Stephen Ross in 2012 and owns the American football team Miami Dolphins……………………………………….Full Article: Source

How a US-Qatar takeover will take Formula 1 up a gear

Posted on 25 June 2015 by VRS  |  Email |Print

Reports are emerging that America’s RSE Ventures, owner of the Miami Dolphins, and Qatar Sports Investments (QSI), a sovereign wealth fund, are seeking to acquire the 35.5% of F1 owned by CVC Capital Partners. It is being predicted that any such deal would be worth between $7 billion and $8 billion.
Significantly, should the deal go through then it will probably also see F1 supremo Bernie Ecclestone selling his 5% holding in the sport. It is also being suggested that QSI will use its purchase of the two shareholdings to ultimately launch a complete takeover of F1………………………………………..Full Article: Source

Government should restart contributions to NZ Super Fund

Posted on 25 June 2015 by VRS  |  Email |Print

The New Zealand Superannuation Fund has been the world’s most successful sovereign wealth fund over the past five years. In that time, it has returned 17 per cent a year. Over the past three years, the going’s been even better, at 21 per cent. These are frankly extraordinary numbers – as fund chairman Gavin Walker said last week, if he saw an investment product promising such returns, “I would be thinking it was too good to be true”.
It wasn’t too good to be true, but it is too good to last. The fund’s managers held their nerve during the global financial crisis and bought underpriced equity – they have made hay as the global economy has recovered. There won’t always be such lucrative opportunities – inevitably, given the fund’s mandate to take some risks, there will be down times too………………………………………..Full Article: Source

Noble shares rise on buyback and China shareholder’s support

Posted on 25 June 2015 by VRS  |  Email |Print

Shares of Noble Group rose after the company bought more stock and its second-largest shareholder, China’s sovereign wealth fund, voiced support for the company for the first time in the wake of criticism of its accounting practices.
“As a major shareholder of Noble Group, we will continue to support its business,” Xie Ping, executive vice president of China Investment Corp., said in a Noble statement on Wednesday morning announcing the appointment of a new director. Noble, Asia’s largest commodity trader, rose as much as 4.3 per cent and at 10:50 a.m. local time was up 2.9 per cent to 71.5 Singapore cents, outpacing Singapore’s benchmark index………………………………………..Full Article: Source

The state pension fund as a sovereign wealth fund

Posted on 25 June 2015 by VRS  |  Email |Print

Sovereign wealth funds have been very holistic in their approach to strategic asset allocation. These funds think about the true risks for their clients (citizens) which is associated with the consumption and revenue pattern of their country. They truly have to think about portfolios that can weather ‘bad times” or market downturns because they are investing their country’s wealth.
They have to account for demographics and the depletion of resources. There are a few states that have the same mandate as a sovereign wealth fund given revenues from natural resource extraction like Alaska, New Mexico, Texas, North Dakota, and Louisiana. These funds have to think about resource prices, cash flows, and how to make the money last over the long-term long even after the resources have been used………………………………………..Full Article: Source

Current trends among GCC sovereign wealth funds

Posted on 24 June 2015 by VRS  |  Email |Print

Swelled by oil revenues the region’s sovereign wealth funds remain among the biggest players in the asset management sector despite the recent drop off in oil prices. Mena Fund Manager looks at current trends among the state-owned funds. The sovereign wealth fund (SWF) sector has continued to grow in recent years. With coffers swelled by commodity revenues, the funds have branched out into new asset classes and sought out new investment opportunities.
London lobbying group TheCityUK said SWF assets had grown to $7.1trn during 2014 in its latest survey of the sector. It remains small in comparison with the global mutual, pension and insurance fund sectors, but a significant sector nonetheless………………………………………..Full Article: Source

Things are not looking good for the mining industry

Posted on 24 June 2015 by VRS  |  Email |Print

It is probably not news to most investors that the global mining industry is in trouble at this point. The Chinese, long one of the biggest buyers of mined commodities, are awash in steel, local debt, and ghost cities. Inevitably as sectors underperform, even the most stalwart investors will eventually get tired and jump ship. That appears to be happening now.
The Qataris are apparently tired of the poor returns in the mining industry and appear ready to throw in the towel on that market. The Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, are reportedly shifting away from the mining sector. Qatar is not the first sovereign wealth fund to back out of commodities, and they probably won’t be the last………………………………………..Full Article: Source

Saudi Public Investment Fund acquires stake in S.Korea’s Posco

Posted on 24 June 2015 by VRS  |  Email |Print

Clifford Chance advised the Saudi Public Investment Fund ( PIF ), the investment arm of the Saudi Government, on the acquisition of a 38% stake consisting of new and existing shares in Posco Engineering & Construction Co Ltd (Posco E&C), a leading Korean engineering and construction company with operations in Asia, the Middle East, South America and Europe.
The parties are also presently considering their strategic options for Saudi Arabia including the potential establishment of an EPC/construction company in the Kingdom of Saudi Arabia. Commenting on the deal, Lead Partner, Riyadh-based Omar Rashid said: “We were delighted to work with PIF on this landmark transaction which represents PIF ’s first significant outbound investment. Given the strength and depth of our Saudi practice, together with our renowned capabilities in Seoul, Clifford Chance was ideally placed to provide PIF with seamless advice on both the Korean and Saudi aspects of the transaction.”……………………………………….Full Article: Source

1MDB: Price paid for energy assets based on ‘long-term view’

Posted on 24 June 2015 by VRS  |  Email |Print

1Malaysia Development Berhad (1MDB) debunked allegations made recently in the Wall Street Journal (WSJ) on its 2012 purchase of a power asset from Genting Group, saying the allegedly inflated price paid had not been driven by political considerations.
Instead, 1MDB insisted that like all its other asset acquisitions, the deal with Genting Group was based on a long-term view as well as advice received from independent valuers and the market conditions at the time………………………………………..Full Article: Source

How China’s race to reserve currency status will rock markets

Posted on 24 June 2015 by VRS  |  Email |Print

The inclusion of the Chinese renminbi into the basket of IMF’s reserve currencies will radically transform global markets and developing countries’ central banks policies. That’s according to Ashmore’s head of research Jan Dehn, who shared his views during a press roundtable on Tuesday.
Dehn said China would no longer need its foreign exchange reserves once its reaches global reserve status. He compared it to the US, which currently has hardly any foreign exchange reserves. ‘This means that China’s foreign exchange reserves, nearly $4 trillion, will become a sovereign wealth fund, which is not going to be invested in US dollar, but in global infrastructure, private equity and alternatives.’……………………………………….Full Article: Source

CVC and Temasek to buy Alvogen

Posted on 24 June 2015 by VRS  |  Email |Print

A consortium of investors led by CVC Capital Partners, and including Singapore-based sovereign wealth fund Temasek and Vatera Healthcare Partners,acquired a controlling stake in Alvogen, the US pharmaceutical company.
The bilateral deal values the privately held company at $2bn (£1.3bn), including debt. The shares come from Pamplona Capital Management’s stake, and the investment managers will retain a small interest. This is the latest pharma deal in a global trend which has seen $250bn worth of pharmaceutical mergers and acquisitions so far this year………………………………………..Full Article: Source

New Zealand’s Super Fund – World’s Best-performing Sovereign Wealth Fund

Posted on 24 June 2015 by VRS  |  Email |Print

The New Zealand Superannuation Fund has outperformed all of its counterparts with its generated returns of more than 17 per cent a year over the past five years according to analysis by JPMorgan. “Acting as a long-term investor has brought short-term rewards for New Zealand’s sovereign wealth fund”, write Sophia Grene and Steve Johnson for the Financial Times.
“The New Zealand fund has a very interesting governance model. It is run by a group called the Guardians, who have a very deep belief in the power of long-term returns”, said Patrick Thomson, global head of sovereign wealth funds at JPMorgan………………………………………..Full Article: Source

A beginner’s guide to fossil fuel divestment

Posted on 24 June 2015 by VRS  |  Email |Print

A coalition of philanthropic foundations, including the heirs to the Rockefeller oil fortune, started to pull out their investments last year, while cities divesting include San Francisco, Seattle and Oslo. The world’s largest sovereign wealth fund, Norway’s Government Pension Fund Global (GPFG), recently revealed it had dropped 114 companies, including tar sands producers, on climate grounds.
The Church of England has divested from the most heavily polluting fossil fuels, while the World Council of Churches, which represents half a billion Christians worldwide, has ruled out all fossil fuel investments………………………………………..Full Article: Source

Norway Fund to Open Tokyo Office as It Prepares to Buy Property

Posted on 23 June 2015 by VRS  |  Email |Print

Norway’s $890 billion sovereign wealth fund plans to open an office in Tokyo as it prepares to enter Asia’s real estate market. The investor is in the process of building a team there and will open an office some time this year, fund spokeswoman Marthe Skaar said in an e-mail. She declined to provide further details.
After getting the green-light in 2010 to expand into the property market, the fund has bought real estate in prime locations such as Times Square and Champs Elysees. It now has a strategy to focus on 10 to 15 cities globally and has been eyeing opportunities in Asia for a few years. In March, the fund said it had narrowed its search in the region to Tokyo and Singapore………………………………………..Full Article: Source

Norway’s coal exit creates ripples

Posted on 23 June 2015 by VRS  |  Email |Print

While this decision by the fund could inspire other large investors, the fossil fuel divestment movement has already been building up considerable steam. When the world’s largest sovereign wealth fund decides to exit investments in coal, the ripples of the decision can be felt the world over.
Late last month, Norway’s parliament decided that the $900-billion sovereign wealth fund should exit from utilities and miners that get 30 per cent of their business from coal, a move that could trigger as much as $5 billion of divestments………………………………………..Full Article: Source

Credit Suisse Fund Wary of Norway Risk Amid $4.4 Billion Spat

Posted on 23 June 2015 by VRS  |  Email |Print

A Credit Suisse Group AG-managed fund that is looking to invest in Norwegian wind farms said a recent $4.4 billion conflict over sudden changes to gas pipe regulations had made the Nordic country a riskier place to do business.
Investors including Allianz SE, Abu Dhabi’s sovereign wealth fund and Canadian pension funds sued the Norwegian government after it imposed cuts of as much as 90 percent to tariffs on future natural gas transportation through Norway’s Gassled offshore pipeline network………………………………………..Full Article: Source

CVC and Temasek to buy US$2b generic drugs firm Alvogen

Posted on 23 June 2015 by VRS  |  Email |Print

European private equity fund CVC and Singaporean sovereign wealth fund Temasek are to buy a controlling stake in the pharmaceutical firm Alvogen, its chairman and chief executive said.
Robert Wessman, former CEO of Actavis, founded the New Jersey-based generic drugs firm in 2009. The size of the stake the consortium ‎purchased was not disclosed, but the deal values the company at around US$2 billion, a source familiar with the matter said on Monday………………………………………..Full Article: Source

S. Korea’s sovereign fund nixes plan to buy into LA Dodgers

Posted on 23 June 2015 by VRS  |  Email |Print

South Korea’s sovereign wealth fund has abandoned its plan to buy a stake in the Los Angeles Dodgers, a Major League Baseball club, as part of a broader move to diversify its investment portfolio, sources familiar with the matter said Sunday.
The Korea Investment Corporation (KIC), which manages assets entrusted by South Korea’s central bank, had been in talks to buy a 19-percent stake in the Dodgers from U.S.-based investment firm Guggenheim Partners since last year, a deal estimated at 400 billion won (US$361 million)………………………………………..Full Article: Source

Bersih challenges PM to sue WSJ over claim that 1MDB helped fund BN campaign

Posted on 23 June 2015 by VRS  |  Email |Print

Prime Minister Datuk Seri Najib Razak must disprove the Wall Street Journal’s claim that 1 Malaysia Development Bhd (1MDB) indirectly funded Barisan Nasional in Election 2013 and sue the publication over the article, Bersih 2.0 said today.
The electoral watchdog said the information to confirm or deny the claim was available to Najib, whom the group said must take action against the allegation. “We therefore again call on the Prime Minister to refute these allegations, and take legal action in his capacity as the Chair of 1MDB’s Board of Advisors in which he holds all the knowledge behind 1MDB transactions, if he so believes the WSJ report is untrue………………………………………..Full Article: Source

Rwanda plans to top up sovereign fund

Posted on 23 June 2015 by VRS  |  Email |Print

The government will annually be contributing Rwf 5 billion (currently $6.7 million) from the national budget towards the sovereign wealth fund. The Agaciro Development Fund (AgDF), is a sovereign wealth fund launched in 2012 by President Paul Kagame. At the time he said, “Aid is never enough, we need to complement it with home-grown schemes. We are not changing our relations with our partners, but rather adding value. More dignity can only help.”
Addressing guests recently to celebrate the AgDF achievements in Kigali, Rwanda’s Minister of Finance and Economic Planning Amb. Claver Gatete said, “This fund does not compete with the budget, but is a fund for the future and it has to be managed and will keep growing”………………………………………..Full Article: Source

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