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Sovereign Wealth Funds Briefing - Archive | October, 2015

Malcolm Turnbull wants sovereign wealth fund

Posted on 26 October 2015 by VRS  |  Email |Print

Australia should establish a sovereign wealth fund when the budget returns to surplus rather than spend all the extra money on tax cuts and middle-class welfare, as happened under the Howard government, Prime Minister Malcolm Turnbull says. The Prime Minister would not commit to a timetable for the budget to be out of deficit, saying only that Tony Abbott’s aspiration to have a strong surplus by 2023-24 was “a good goal”.
Turnbull said when growth returned to trend, the budget should be back in balance. “We certainly need to get the budget back to balance over the cycle,” he said. “When you talk about the budget being in balance over the cycle, when the business cycle is roaring ahead and the terms of trade are booming, you want to be running surpluses and putting money in the bank, preferably in a sovereign wealth fund………………………………………..Full Article: Source

China Investment Corporation: $2.45 billion deal to buy stakes in nine Australian office towers

Posted on 26 October 2015 by VRS  |  Email |Print

The China Investment Corporation — a state-owned sovereign wealth fund — earlier this month closed a $2.45 billion deal to buy stakes in nine Australian office towers, seven of which are in Sydney. The Australian-record purchase includes a 50 per cent share of the Telstra building on George St, a 25 per cent share of the Deutsche Bank building on Phillip St and 100 per cent shares of high-rises on Elizabeth and Market streets and in North Sydney.
Helped by the falling Aussie dollar, the deal is the latest in a growing list of recent local Chinese purchases whose values have reached hundreds of millions of dollars and beyond. A report this month by real estate services giant Cushman & Wakefield found that Sydney was the world’s fourth-most popular city for global investors, behind only London, New York and Paris………………………………………..Full Article: Source

HKMA warns on Exchange Fund

Posted on 26 October 2015 by VRS  |  Email |Print

The performance of Hong Kong’s Exchange Fund in the first three quarters this year, which will be announced early next month, can hardly be encouraging, warns Eddie Yue Wai-man, deputy chief executive of Hong Kong Monetary Authority.
And chief executive Norman Chan Tak-lam’s warning in January that the investment environment in 2015 will be more complex and difficult than last year is quite prescient as global financial markets have been abnormally turbulent so far, especially in the third quarter, Yue wrote in an article on the authority’s website………………………………………..Full Article: Source

Oman, Japan to form $400 mln fund to invest in food sector -Omani officials

Posted on 26 October 2015 by VRS  |  Email |Print

Oman’s biggest sovereign wealth fund has agreed with Japanese institutions to set up a joint $400 million fund that will invest in food and agribusiness industries, Omani officials said on Sunday. The fund will facilitate direct investment in Gulf Cooperation Council (GCC) states by Japanese food and agribusiness firms, ranging from grains and feed to vegetables, milk and dairy products, logistics and research firms, they said, aiming to spend at least 35 percent of the money in Oman.
The Gulf Japan Food Fund will be owned 37.5 percent by Oman’s State General Reserve Fund. State-run Oman National Investments Development Co and Gulf Investment Corp, owned by the six GCC states, will hold a combined 12.5 percent………………………………………..Full Article: Source

In Malaysia, 1MDB Scandal Hinders Economic Growth

Posted on 26 October 2015 by VRS  |  Email |Print

This week, with Malaysia’s parliament back in session, the opposition is renewing its efforts to oust Prime Minister Najib Razak through a no-confidence vote. The effort follows the prime minister’s involvement earlier this year in a scandal surrounding the heavily indebted 1Malaysia Development Berhad (1MDB) sovereign wealth fund. Among other points of controversy, Najib is struggling to explain the source of nearly $700 million deposited to his personal account.
Even without the political crisis, Malaysia is already facing economic headwinds because of low commodity prices and a looming interest rate hike by the U.S. Federal Reserve. But the scandal may be worsening the situation. Malaysia’s once globally esteemed financial institutions are now in question, and 1MDB is involved in nearly every part of the Malaysian economy, including energy, agriculture, tourism and real estate………………………………………..Full Article: Source

1MDB boss looks forward to being questioned by PAC

Posted on 26 October 2015 by VRS  |  Email |Print

1Malaysia Development Berhad (1MDB) president and group executive director Arul Kanda Kandasamy has reiterated that he “looks forward” to being questioned by the Public Accounts Committee (PAC). “Yes. We have confirmed to this publicly many times. We look forward to the PAC hearing in order to provide answers to the lawful authorities of the country,” said Arul.
He was present at Malaysia’s Economic Outlook Seminar to give a briefing on 1MDB’s history as well as to hold a question-and-answer session for MCA members. Applause could be heard from the seminar room when Arul concluded his session………………………………………..Full Article: Source

Norwegian Lessons: Takeouts from a thrifty country

Posted on 26 October 2015 by VRS  |  Email |Print

Is it possible to make a link between what you (should) do as a private investor and what the world’s richest country does? Yes! Therefore, in a series of articles we look at Norway, its sovereign wealth fund – known as Government Pension Fund Global, and the lessons private investors can learn from the country.
Do you usually earn more than you spend and have money left over to invest? If the answer is “yes”, you have something in common with the kingdom in the north. Since 1996, it has been saving part of its oil and gas revenue in its so-called oil fund, which with an value of roughly $875 billion has become the largest sovereign wealth fund, at least of those that make data public………………………………………..Full Article: Source

SOFAZ expects deficit-ridden budget in 2015

Posted on 26 October 2015 by VRS  |  Email |Print

The budget of the State Oil Fund of Azerbaijan (SOFAZ) for 2015 will be deficit-ridden due to the long decline in world oil prices, SOFAZ told Trend Oct. 23. While drawing up SOFAZ budget-2015, the basic parameters of the state budget were taken as a basis. The oil price was set at $90 per barrel, the source said.
“Taking into account the oil price at $50 a barrel, SOFAZ’s total income, including the proceeds from the oil and gas sale are predicted at 7.4 billion manat till late 2015, which is 28 percent less than SOFAZ income approved for this year,” SOFAZ said………………………………………..Full Article: Source

World’s biggest wealth fund calls for rules to fight ETF risks

Posted on 23 October 2015 by VRS  |  Email |Print

Norway’s sovereign wealth fund says there’s a need for new rules to limit the risks spreading from the growth in exchange-traded funds. The $860-billion fund is concerned over the growing impact ETFs have on the underlying securities they are connected to, said Oeyvind Schanke, chief investment officer for allocation strategies at Norges Bank Investment Management, the department in the central bank in Oslo that runs the fund.
A good step has been imposing circuit breakers on exchanges, “but the interaction between ETFs and underlying securities is also important,” he said in an interview after participating at a conference in Qatar. The interaction between futures and the ETFs underlying securities is increasing “so we probably need some set of rules that take care of that inter- connectivity.”……………………………………….Full Article: Source

Norway Fund Sets Tougher Water-Use Requirements on Companies

Posted on 23 October 2015 by VRS  |  Email |Print

Norway’s sovereign-wealth fund, the world’s largest by assets, has decided to impose tougher requirements on how businesses it invests in manage water resources. The fund, which is run by Norges Bank Investment Management, an arm of Norway’s central bank, will ask companies to come up with clear strategies and risk-management plans for water resources.
Until now, the fund only required companies to report on their water use. “We want our expectations to be very clear,” William Ambrose, a senior manager at NBIM told The Wall Street Journal………………………………………..Full Article: Source

Executive Director of SOFAZ attends 30th EITI Board Meeting in Switzerland

Posted on 23 October 2015 by VRS  |  Email |Print

Chairman of the National EITI Commission, a member of the EITI International Board and the Executive Director of the State Oil Fund of Azerbaijan (SOFAZ) Shahmar Movsumov is attending the 30th Extractive Industries Transparency Initiative (EITI) Board Meeting in Bern, Switzerland.
Azerbaijan joined EITI in 2003. Azerbaijan was awarded the “2009 EITI Award” for its commitment to EITI principles and criteria and achievements in EITI Implementation, AzerTag reports. The EITI is an international organization which maintains a standard, assessing the levels of transparency regarding countries’ oil, gas and mineral resources………………………………………..Full Article: Source

Here’s what Temasek Holdings & GIC do with your money

Posted on 23 October 2015 by VRS  |  Email |Print

It’s high time someone talks about the elephant(s) in the room (Singapore) that has been the talk of this election and conspiracy theorists: Temasek Holdings and GIC. Sovereign wealth funds (SWFs) have been accused of having hidden agendas, being state economic weapons. At the same time, they’ve also been hailed as saviors, buoying up banks during the financial crisis when capital markets were frozen.
Singapore isn’t the only nation with a SWF; many other nations (mainly net exporters) that enjoy current account surpluses and hoard reserves have a SWF as well. SWFs manage vast amounts of money, also often seen as the true lender of last resort in its home country. The below table shows the world’s largest SWFs:……………………………………….Full Article: Source

Singapore’s sovereign wealth fund invests in an Indian office joint venture

Posted on 23 October 2015 by VRS  |  Email |Print

Singapore’s sovereign wealth fund, GIC, has signalled its confidence in India’s commercial real estate market, with a 50% stake in an office development in Hyderabad. The investment is a 50/50 joint venture with Tishman Speyer, a U.S. real estate development firm.
The Waverock development is located near Gachibowli, the IT hub of Hyderabad. Waverock is in its third and final phase of development and will be completed over the next two years. The already completed office segments are fully leased and includes major companies such as DuPont and TCS Accenture. Upon completion, the entire development will be 2.5 million square feet and house more than 20,000 professionals………………………………………..Full Article: Source

GIC investment spurs 28% gain in India’s best junk bond

Posted on 23 October 2015 by VRS  |  Email |Print

A bit of AAA-rated endorsement can go a long way for a little-known junk bond issuer. Dollar notes in India’s Greenko Group Plc have gained 28 per cent in 2015 after Singapore sovereign wealth fund GIC agreed to take full control of one of the renewable energy firm’s businesses. It’s the best performing high-yield bond in India in a Bank of America Merrill Lynch index of dollar notes that’s lost 1.3 per cent this year.
Greenko isn’t the first Asian company to benefit from Singapore’s intervention. Holders of Olam International’s unrated notes also profited after state investment arm Temasek Holdings Pte made a takeover offer for the commodity trader once attacked by Muddy Waters LLC………………………………………..Full Article: Source

Nigeria: Buhari and the Sovereign Wealth Dilemma

Posted on 23 October 2015 by VRS  |  Email |Print

When the Edo State Governor and Chairman of the National Economic Council (NEC) Ad-hoc Committee on the management of the Excess Crude Account (ECA) and related federation accounts issues, Comrade Adams Oshiomhole, recently threw a big dart at the Sovereign Wealth Fund (SWF), I was not one bit surprised.
However, given the season we are in, there is the temptation for some people to believe that the Nigeria Sovereign Investment Authority (NSIA) is being accused of corruption or mismanagement of fund. That is not the case even though President Muhammadu Buhari has a serious problem on his hands on the issue………………………………………..Full Article: Source

Future Fund returns pretty super

Posted on 22 October 2015 by VRS  |  Email |Print

You have to wonder how Peter Costello and his Future Fund team do it. At a time of intense global financial market volatility, the fund still managed to add $600 million - a return of 0.5 per cent - to its ever-growing investment pool during the September quarter.
Compare that to Super Ratings research, which shows the median return on “balanced option” superannuation accounts during the same period returned declined by 1.7 per cent. The Future Fund also outgunned the same super accounts for every comparable return period - one, three, five and seven years - by a significant margin. It also was comfortably ahead of its own legislated target return of CPI plus 4.5 per cent………………………………………..Full Article: Source

Future Fund taps AP4 veteran to oversee its equity allocations

Posted on 22 October 2015 by VRS  |  Email |Print

Bjorn Kvarnskog will join Australia’s A$117.8 billion ($85.5 billion) Future Fund in early 2016 as head of equities and a member of the Melbourne-based sovereign wealth fund’s investment committee. Kvarnskog will take over that position from acting head of equities Sarah Carne, who took over when Elspeth Lumsden, the fund’s previous head of equities, left in late 2014, spokesman Will Hetherton said in an e-mail. Ms. Carne will resume her position of director, equities.
Kvarnskog will relocate to Melbourne from Stockholm, where he served as head of global equities with the 310.5 billion Swedish kronor ($37.6 billion) AP4, Stockholm………………………………………..Full Article: Source

Australia’s Santos rejects $5.1 bln sovereign wealth-backed bid

Posted on 22 October 2015 by VRS  |  Email |Print

Embattled Australian oil and gas producer Santos Ltd said on Thursday it has rejected a A$7.1 billion ($5.1 billion) takeover proposal from a fund backed by the ruling families of Brunei and the United Arab Emirates.
Santos effectively put itself on the block in August, looking to sell assets in a race to cut its A$8.8 billion net debt as its Gladstone liquefied natural gas (LNG) project begins operations amid a sharp slump in oil prices. It said the bid from Bermuda-headquartered Scepter, pitched at a 26 percent premium to its last trade, was too cheap and included conditions that would hurt Santos’ consideration of other alternatives in its asset sale process and a wider strategic review………………………………………..Full Article: Source

GIC co-invests in a 2.5m sq ft office development in Hyderabad

Posted on 22 October 2015 by VRS  |  Email |Print

Singapore’s sovereign wealth fund GIC announced Thursday (Oct 22) that it has partnered New York-based real estate company Tishman Speyer to co-own an office development project in Hyderabad, India.
The partnership will be in a form of a 50-50 joint venture. Located near the high-growth financial district employment corridor in the capital of southern India’s Telangana state, the total area of the project will be 2.5 million sq ft upon completion. It will house more than 20,000 professionals………………………………………..Full Article: Source

Sovereign wealth funds sell chunk of Indian stocks; oil-rich countries among top sellers

Posted on 22 October 2015 by VRS  |  Email |Print

Sovereign wealth funds, known to be long-term global investors, aggressively pulled money out of Indian stocks in the recent emerging market sell-off in the last couple of months. These funds withdrew roughly Rs 6,000-7,000 crore from domestic shares between July and September by selling shares directly, redeeming from global emerging market funds and India-centric funds, according to three people familiar with their investments.
These investors have invested in India through a mix of direct investments, mutual fund schemes and emerging market funds. Official data on how much they pulled out of India is not available. Funds owned by oil-rich countries such as Abu Dhabi, Kuwait, Qatar and Oman were among the top sellers as international crude oil prices crashed to six-year lows………………………………………..Full Article: Source

Japanese real estate investment expected to increase

Posted on 22 October 2015 by VRS  |  Email |Print

The city’s real estate market could see increased investment from Japanese institutional investors, with Japan’s Government Pension Investment Fund (GPIF) – the world’s largest pension fund – expected to increase global real estate investment. The GPIF is anticipated to allocated up to 5 percent of its roughly $1.2 trillion in assets into “alternative investments” that would include real estate, according to a report by commercial brokerage CBRE.
That means the pension fund’s total investments in overseas real estate markets alone over the coming years could reach $1.8 billion – equal to total Japanese outbound real estate investment in 2014, CBRE said………………………………………..Full Article: Source

Norway’s fund to seek approval for top property deals, central bank says

Posted on 22 October 2015 by VRS  |  Email |Print

The board of Norway’s central bank is introducing an extra layer of supervision for the country’s sovereign wealth fund, which will need to seek approval for all property deals over $250 million, the bank said on Tuesday. For the first time, the $860 billion wealth fund, the world’s largest, will need approval for some of its most valuable property deals. Property represents 2.7 percent of its total value, which it wants to increase to five percent.
The fund, which invests Norway’s revenues from oil and gas in stocks, bonds and property, will now need approval from a new investment committee for deals over $250 million. Deals worth more than $1 billion will need the approval of the board of the central bank. Until now, the fund’s management, led by Chief Executive Yngve Slyngstad, decided on its own………………………………………..Full Article: Source

Norway’s central bank ensures sovereign wealth fund seeks approval for large property deals

Posted on 22 October 2015 by VRS  |  Email |Print

The board of Norway’s central bank is introducing an extra layer of supervision for the country’s sovereign wealth fund, which will need to seek approval for all property deals over US$250 million, the bank said on Tuesday. For the first time, the US$860 billion wealth fund, the world’s largest, will need approval for some of its most valuable property deals. Property represents 2.7 percent of its total value, which it wants to increase to five percent.
The fund, which invests Norway’s revenues from oil and gas in stocks, bonds and property, will now need to approval from a new investment committee for deals over US$250 million. Deals worth more than US$1 billion will need the approval of the board of the central bank. Until now, the fund’s management, led by chief executive Yngve Slyngstad, decided on its own………………………………………..Full Article: Source

New wealth fund pledged by city council contender

Posted on 22 October 2015 by VRS  |  Email |Print

A council leadership contender has vowed to create a regional sovereign wealth fund to invest in Birmingham businesses, housing and infrastructure. Coun John Clancy, who is front-runner in the battle to succeed Sir Albert Bore as leader, wants to “sweat” the council’s £5-£6 billion land and property assets to build and support jobs, economic growth and housing in the region.
In his detailed manifesto, he says: “This would use our physical asset base to generate capital spend in building housing and investing in business, jobs and infrastructure across all wards of the city, to generate economic growth city-wide. “We must use it to ensure thousands of affordable homes are built each year over the next decade in this city………………………………………..Full Article: Source

Norway’s fund to seek approval for top property deals, central bank says

Posted on 21 October 2015 by VRS  |  Email |Print

The board of Norway’s central bank is introducing an extra layer of supervision for the country’s sovereign wealth fund, which will need to seek approval for all property deals over $250 million, the bank said on Tuesday. For the first time, the $860 billion wealth fund, the world’s largest, will need approval for some of its most valuable property deals.
Property represents 2.7 percent of its total value, which it wants to increase to five percent. The fund, which invests Norway’s revenues from oil and gas in stocks, bonds and property, will now need to approval from a new investment committee for deals over $250 million. Deals worth more than $1 billion will need the approval of the board of the central bank. Until now, the fund’s management, led by Chief Executive Yngve Slyngstad, decided on its own………………………………………..Full Article: Source

India should fund its innovators: Jayant Sinha

Posted on 21 October 2015 by VRS  |  Email |Print

The Centre’s move to assist start-ups and SMEs appears to have gathered steam, with fund-of-funds India Aspiration Fund (IAF) already sanctioning INR 700-800 crore of its first tranche of INR2,000 crore to domestic venture capital firms. The Fund is an attempt to boost the start-up ecosystem and harness the potential of India’s innovators and entrepreneurs by providing them with a network of domestic financers, said Minister of State for Finance Jayant Sinha.
“Almost 90-95 per cent of venture capital funding comes from outside India. India’s innovation is being funded by the Teachers Pension Plan of Ontario, the Stanford Endowment, the Norwegian sovereign wealth fund, by Temasek (Singapore’s sovereign fund). We need to fund Indian innovation here in India, and we need to build venture capital here,” he said………………………………………..Full Article: Source

1MDB, subsidiaries tax exempted for 10 years

Posted on 21 October 2015 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB) and its wholly-owned subsidiaries have been granted tax exemptions for 10 years by Prime Minister Datuk Seri Najib Razak, who is also the finance minister. Najib announced the tax holiday for 1MDB, which is currently under probe by the Public Accounts Committee (PAC), in Parliament yesterday through a written reply to Kampar member of Parliament (MP) Dr Ko Chung Sen who asked about taxes paid by the strategic investment fund since 2009.
“1MDB and its wholly-owned subsidiaries can enjoy tax exemptions including dividends for a period of 10 years in line with Section 127(3A) of the Income Tax Act 1967. However, other subsidiaries acquired by 1MDB are not entitled to the tax exemptions,” said Najib, who is also chairman of 1MDB’s board of advisors………………………………………..Full Article: Source

Dhanabalan to chair Temasek’s Mandai rejuvenation unit

Posted on 21 October 2015 by VRS  |  Email |Print

Temasek Holdings’ proposal to turn Mandai into an integrated wildlife and nature heritage area has been taken another step towards realisation. The Singapore investment firm has set up a wholly-owned unit to oversee the “concept development” for the estate’s makeover and asked its former chairman S Dhanabalan to chair it, according to a press release the unit sent out on Tuesday.
Mandai Safari Park Holdings said in its statement that it commissioned a study of the proposed development’s impact on the environment in March this year and expects to be able to publish findings in the second quarter of 2016. This environmental impact assessment “aims to explore and incorporate sustainable solutions in the development of the precinct”, it added………………………………………..Full Article: Source

Singapore: GIC to acquire Greenko Mauritius for $251m

Posted on 21 October 2015 by VRS  |  Email |Print

GIC unit Greenko Energy Holdings has proposed the acquisition of Indian renewable energy company Greenko Group’s majority interest in its Mauritius-based holding firm, Greenko Mauritius, for about £162.8 million ($251.8 million). This was conducted through Cambourne, a GIC affiliate.
Greenko Group entered into a sale and purchase agreement (SPA) with Greenko Energy Holding, a subsidiary of Cambourne Investment, for the disposal of all of the company’s shares in Greenko Mauritius and all other assets held by Greenko Mauritius………………………………………..Full Article: Source

Australia Sovereign Wealth Fund Boosts Cash Reserves

Posted on 21 October 2015 by VRS  |  Email |Print

Australia’s A$118 billion sovereign wealth fund, the Future Fund, has increased its cash reserves because of uncertainty in global financial markets and worries about the impact of a rate rise by the U.S.central bank. “We believe that prospective returns are relatively low at the moment and we believe that the risks are relatively high,” Future Fund Managing Director David Neal tells a Budget oversight committee of Australian lawmakers.
Neal adds that the key risks worrying the world’s 14th largest sovereign fund include U.S. monetary policy and “whether the U.S economy will be able to withstand rising interest rates and how it will cope with rising interest rates.”……………………………………….Full Article: Source

Commodity prices pile pressure on Middle East

Posted on 21 October 2015 by VRS  |  Email |Print

As a result of the falling oil price, Norway, which runs the latest sovereign wealth fund in the world plans to draw some $450 million from the fund in 2016 to make up for lost oil revenues. But with around $820 billion under management, that is not a huge portion. Saudi Arabia, where the central bank also doubles as the country’s sovereign wealth fund, is also set to tap its foreign currency reserves according to chief market strategist at Convergex Nick Colas.
Moody’s said that Bahrain and Oman will also putting their sovereign wealth fund “buffers” to use, with reserves falling by 15 percent to $5.2 billion in April from $6 billion in December but have risen again slightly in May and stabilized since then. The agency said sovereign credit quality of GCC states could deteriorate if government spending continues to grow at a rapid pace and public debt levels mount sharply………………………………………..Full Article: Source

Rival Libyan investment authorities sabre rattle ahead of peace deal deadline

Posted on 21 October 2015 by VRS  |  Email |Print

Libya’s rival investment authorities, both claiming control of the embattled North African oil producer’s sovereign wealth fund, have reasserted their claim to the $60bn (£39bn) portfolio ahead of a UN-imposed deadline for peace.
Just as Libya currently has two governments battling for control of the country, two rival investment authorities have emerged claiming control of the nation’s surplus oil revenue investments. The claims are inherently tied to the two rival governments and ahead of a UN deadline which would see both share power in a unity government as of 20 October, the investment authorities have staked their claim to Libya’s frozen billions………………………………………..Full Article: Source

Schwarzman: SWFs build PE exposure, even after oil price collapse

Posted on 21 October 2015 by VRS  |  Email |Print

Sovereign wealth funds are an increasingly important funding source for Blackstone Group, even those that have been hammered by the collapse of oil prices, Chief Executive Officer Steve Schwarzman said during the firm’s third quarter earnings call last week.
There are two types of sovereign funds — those related to oil proceeds, and “all else,” Schwarzman said. Funds reliant on oil proceeds have not been growing, which creates a situation where fund managers have to compete for dwindling resources from those funds, he said. But that doesn’t mean those types of oil-oriented funds are backing away from private equity. “Some of them, interestingly, are significantly increasing their share of alternatives because of its performance characteristics,” Schwarzman said………………………………………..Full Article: Source

Future Fund uses Cayman Is tax haven

Posted on 20 October 2015 by VRS  |  Email |Print

Australia’s Future Fund has money invested in funds based in a notorious tax haven. Future Fund Management Agency managing director David Neal told a Senate estimates hearing on Tuesday the fund - which stood at $117.8 billion at the end of September - had money invested in funds that used the Cayman Islands.
“We’ve got a number of vehicles in the Cayman Islands and I think it would be standard practice,” Mr Neal said. Finance Minister Mathias Cormann said the Future Fund did not pay any tax so it would be wrong to suggest the Caymans were being used to minimise tax. “It’s related to their overall risk management strategy not seeking a particular tax outcome,” the minister told the hearing………………………………………..Full Article: Source

Australia’s Future Fund went bargain hunting in the September quarter

Posted on 20 October 2015 by VRS  |  Email |Print

Australia’s sovereign wealth fund, the Future Fund, released its quarterly portfolio update earlier today with the value of assets under management increasing by $610 million to $117.83 billion as of September 30.
While small, the increase of 0.52% came despite significant stock market declines, both domestically and abroad. Over the September quarter Australia’s benchmark ASX 200 index fell by 8.01%, its largest quarterly decline in four years. One of the most interesting features of the Future Fund portfolio update is just that – what assets it invested in………………………………………..Full Article: Source

Future Fund reduces exposure to emerging markets

Posted on 20 October 2015 by VRS  |  Email |Print

The $118 billion Future Fund moved some of its cash into new hedge funds in the September quarter, as the fund’s managers continued to avoid risk in choppy markets. The national sovereign wealth fund also switched about $1.5 billion from emerging market global equities to developed market equities during the three months to 30 September.
Separately, the federal government made its first contribution of $1.01 billion to the Medical Research Future Fund established by former treasurer Joe Hockey during the quarter………………………………………..Full Article: Source

GIC to invest S$350m in Indian clean energy projects

Posted on 20 October 2015 by VRS  |  Email |Print

An affiliate of Singapore’s sovereign wealth fund GIC will invest about £162.8 million (S$350 million) to buy over clean energy assets in India. This will be done via the proposed acquisition of Greenko Group PLC’s majority interest in Greenko Mauritius, which is the holding company for Greenko’s business in India. Greenko operations in India include wind power, run-of-river hydropower, natural gas and biomass assets.
Mr Stuart Baldwin, global head of Infrastructure at GIC, said in a statement on Monday (Oct 19): “We look forward to working closely with Greenko’s management to develop the company to be the leading owner and operator of clean energy projects in India.”……………………………………….Full Article: Source

GIC provides $139m loan to realty PE Maya Capital for investments in UK

Posted on 20 October 2015 by VRS  |  Email |Print

Singapore’s sovereign wealth fund (SWF) GIC has increased its exposure in the UK property market with the grant of a £90-million ($139.1 million) loan to a private equity firm, Maya Capital. Maya Capital, a pan-European realty investment firm and advisory, said that the GIC loan would help fund acquisitions in areas outside London and the London Orbital Motorway (M25) which have seen a resurgence in activity on the back of better economic conditions and employment.
According to a report in UK business publication City A.M., Maya Capital’s ‘regional strategy plan’ is already backed by independent financial firm GWM Capital Advisors, with the firm completing several other transactions in townships surrounding London. According to Maya Capital and GWM, the capital commitment for this initiative is £50 million (US$77.3 million)………………………………………..Full Article: Source

What does China own in the UK?

Posted on 20 October 2015 by VRS  |  Email |Print

China may be the world’s second-largest economy behind the US, but it has more money in the bank than any other country. Indeed three of the world’s 10 biggest sovereign wealth funds are Chinese, together holding more than $1.5tn (£988bn) in assets.
And despite the slowdown in the Chinese economy in the past five years, the government has been putting this money to good use, particularly so since it recovered from the global economic slowdown sparked by 2008’s financial crisis. In fact, overseas investments have grown from $20bn in 2005 to $171bn last year. And, as the chart below shows, the UK is one of China’s favourite places to invest………………………………………..Full Article: Source

1MDB slams DAP publicity secretary for using unverified info

Posted on 20 October 2015 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB) took a swipe at DAP publicity secretary Tony Pua for recycling incorrect statements for cheap political gain. The government investment arm criticised Pua for also using unverified information from a discredited foreign blog to level baseless allegations against it.
1MDB said it had given authentic documents, including the minutes of the board of directors meeting, to the police and the Auditor-General to facilitate investigations. “But Pua has continuously used selective information to discredit 1MDB,” it said………………………………………..Full Article: Source

Greens Build on Wealth Fund Win to Ban Oslo From Fossil Fuels

Posted on 20 October 2015 by VRS  |  Email |Print

Norway’s Green Party is forcing the capital city’s $9.3 billion pension manager to sell out of fossil fuel companies, building on momentum from helping re-shape guidelines for the nation’s $860 billion sovereign wealth fund.
The party surged in municipal elections last month, winning 8.1 percent of votes in Oslo, making it the third largest party. They will now for the first time form a government with the Labor Party and the Socialist Left. “Oslo will take responsibility for the climate, both through our own policies and our investments,” Lan Marie Nguyen Berg, first candidate for the city’s Green Party, said in an e-mailed statement………………………………………..Full Article: Source

Norway’s Green Party to ban Oslo pension fund from investing in fossil-fuel companies

Posted on 20 October 2015 by VRS  |  Email |Print

Norway’s Green Party is forcing the capital city’s $9.3 billion pension manager to sell out of fossil-fuel companies, building on momentum from helping reshape guidelines for the nation’s $860 billion sovereign wealth fund, Government Pension Fund Global, Oslo.
Officials at Oslo Pensjonsforsikring AS, the city’s pension fund, are working on how they will implement the proposed ban and are compiling a list of companies the fund will need to sell, CEO Aamund Lunde said by phone. Mr. Lunde declined to say how much will be sold or how many companies would be covered………………………………………..Full Article: Source

Future Fund grows despite global market ructions

Posted on 19 October 2015 by VRS  |  Email |Print

Australia’s $118 billion sovereign wealth fund managed to keep its head above water over the volatile September quarter, growing the fund by $600 million during a period when global sharemarkets saw their worst performance in four years.
However, Future Fund chairman Peter Costello has warned again of lower expected returns in the long term, after the fund managed to eke out a gain of 0.5 per cent over the three months to September 30, taking the total value of the fund to $117.8bn. The 0.5 per cent rate of return over the period was below the Future Fund’s target of 1.6 per cent for the quarter, but came at a time when global sharemarkets, including the Australian bourse, posted their worst performance since 2011………………………………………..Full Article: Source

Australia’s Future Fund returns 0.5 pct in Sept qtr

Posted on 19 October 2015 by VRS  |  Email |Print

Australia’s sovereign wealth manager, the Future Fund, said on Monday it returned 0.5 percent in the September quarter, marking slower growth for the fund which has returned an average 11.1 percent annually over five years. The fund, which has consistently outperformed its target return since it was set up in 2006, also fell short of its July-September target of 1.6 percent.
Future Fund Chairman Peter Costello reiterated that returns were likely to decline amid a large correction in Australian equities and increased volatility generally. Australian shares fell about 8 percent in the three months to September, the worst quarterly performance since 2011, largely due by fears about slowing growing in China and uncertainty about the timing of U.S. interest rate hike………………………………………..Full Article: Source

Future Fund issues return warning

Posted on 19 October 2015 by VRS  |  Email |Print

The Future Fund has issued a warning to investors that the high returns of the past few years are unlikely to continue in the medium term. The latest update shows the Future Fund’s investment strategy has almost doubled the value of original government contributions since its inception.
Since its launch in May 2006, the sovereign wealth fund has added $57.3 billion in investment returns to the government’s original contributions, which were valued at $60.5 billion at the time of transfer. The performance translates to annualised return of 7.8%, comfortably ahead of the long-term target return of CPI +4.5%, which equates to 7.1%. Performance is also well ahead over one, three, five and seven years………………………………………..Full Article: Source

Singapore wealth fund eyes UK housing

Posted on 19 October 2015 by VRS  |  Email |Print

The Singapore government’s investment arm has announced plans to fund projects in the UK property market, writes Chris Smith. The sovereign wealth fund GIC announced it is investing £90m in the private equity firm Maya Capital to fund acquisitions outside the M25. Maya has investment from GWM Capital Advisors and has started projects in Newcastle and Wales.
David Pralong, managing partner of Maya Capital, said: “The fact that we have received financing from such a high profile and internationally respected financial institution such as GIC will allow us to continue to pursue our strategy.”……………………………………….Full Article: Source

KIC and Gaw Capital seal deal for InterContinental Hong Kong

Posted on 19 October 2015 by VRS  |  Email |Print

A consortium led by Korean sovereign wealth fund (SWF), the Korea Investment Corporation (KIC), has sealed a deal to acquire five-star hotel InterContinental Hong Kong for US$940 million. According to a report from MK Business News, the KIC hooked up with Hong Kong-based real estate private equity firm Gaw Capital Partners (Gaw Capital) to forge a sales agreement with the InterContinental Hotels Group in July.
The consortium injected US$470 million into the acquisition and borrowed the other half from local lenders to finance the deal. Gaw Capital previously announced it would retain InterContinental Hotels Group to continue managing the property, whilst using its existing hospitality platform, GCP Hospitality, to enhance the asset management side of things if the transaction went through………………………………………..Full Article: Source

Russia’s Rusnano to create $2-billion fund to invest in Indo-Russian defence joint ventures

Posted on 19 October 2015 by VRS  |  Email |Print

Russian sovereign wealth fund Rusnano Management Company will create a $2-billion (Rs 13,000 crore) fund with equal contribution from Indian financial institutions to invest in joint venture companies formed between the two countries which will develop defence and aerospace equipment with high-end technology , two persons with direct knowledge of the development said.
“We will invest up to 49% in the joint venture company and the rest will be owned by the Indian partner,” said one of the persons.”We will also transfer critical technology to the joint venture in both defence and aerospace. The entire plan is part of the Make In India initiative.” The fund will be a subset fund of the National Infrastructure Investment Fund (NIIF) launched to invest in new infrastructure companies and stressed ones which are starved of capital………………………………………..Full Article: Source

Norway oil fund turning its eyes to Tokyo real estate

Posted on 19 October 2015 by VRS  |  Email |Print

Norway’s Government Pension Fund Global will soon start investing in Japanese office buildings, possibly spending $5 billion to $8 billion over the long term, according to the chief real estate investment officer at Norges Bank Investment Management. Among Asian cities, the world’s largest sovereign wealth fund has set its sights on Tokyo and Singapore, said Karsten Kallevig. Norges Bank Investment Management, which manages the fund, opened an office here in early October for this purpose.
Growth is expected over the long term thanks to the concentration of global businesses, Kallevig said of the Tokyo market. Investment will be limited to the capital, with no plans to expand to Osaka or Nagoya. With the weakening of the yen, some view Japanese real estate as a bargain for overseas investors. But Kallevig said the soft price trend did not factor into the fund’s decision………………………………………..Full Article: Source

Volkswagen faces EUR40bn lawsuit from investors

Posted on 19 October 2015 by VRS  |  Email |Print

Volkswagen is set to be pushed deeper into crisis after it emerged that the carmaker is facing a record-breaking €40bn (£30bn) legal attack spearheaded by one of the world’s top law firms.Now Quinn Emanuel and Bentham are contacting VW’s biggest investors – which include sovereign wealth funds of Qatar and Norway – to ask them to join the claim.
VW has admitted that it fitted “defeat devices” to 11m cars that allowed them to fraudulently pass pollution controls, though the company’s senior management has insisted it was unaware of the practices………………………………………..Full Article: Source

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