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Sovereign Wealth Funds Briefing - Archive | December, 2015

Arab sovereign wealth fund exodus just beginning

Posted on 30 December 2015 by VRS  |  Email |Print

Oil-rich Gulf sheikhdoms are being forced to raid their sovereign wealth funds to shore up their budgets. With U.S. crude oil prices falling below $40 per barrel in December, they have no choice but to reach into these rainy-day savings. For now, they can hold on to some of their trophy assets, like strategic investments in Volkswagen or Barclays. But if crude prices keep tumbling, a fire sale will be hard to avoid.
During the most recent energy boom, the six members of the Gulf Cooperation Council – including Saudi Arabia, Qatar and Kuwait – amassed sovereign funds worth more than $2.3 trillion. These assets have traditionally comprised a mix of debt and other securities, in addition to influential stakes in some of the world’s biggest companies such as Glencore, VW and Barclays………………………………………..Full Article: Source

‘Politicised’ SWFs earn lower returns

Posted on 30 December 2015 by VRS  |  Email |Print

Sovereign wealth funds that are “highly politicised” earn lower returns on their stock-market investments than more independent peers, according to new academic research. An analysis of more than 1,000 sovereign wealth fund investments in publicly traded companies found that shares in those companies rose less following a purchase by a sovereign wealth fund compared with almost 6,000 comparable stock purchases by private investors.
The so-called SWF discount was worse when funds with strict government oversight bought shares. There was no discount when Norway’s independently managed sovereign wealth fund bought shares, according to Veljko Fotak of the University at Buffalo, who wrote the report with Bernardo Bortolotti of Turin University in Italy and William Megginson of the University of Oklahoma………………………………………..Full Article: Source

The key to the success of NIIF, India’s new SWF, will be governance

Posted on 30 December 2015 by VRS  |  Email |Print

India now has a sovereign wealth fund. The National Investment and Infrastructure Fund (NIIF) will soon get a chief executive even as negotiations are on with strategic investors to put in capital above the Rs.20,000 crore a year that the government has promised. This money will be leveraged through debt.
Governments are generally bad at picking investment opportunities. The key to the success of NIIF will be governance. Money is to be put not just into asset management companies that buy infrastructure assets but also private projects, both new and stalled. It is thus important that the fund managers are given operational freedom to invest in the most attractive opportunities………………………………………..Full Article: Source

Global sovereign funds keen on investing in India: FM Arun Jaitley

Posted on 30 December 2015 by VRS  |  Email |Print

The first meeting of the governing council of National Investment and Infrastructure Fund (NIIF) was held on Tuesday, wherein it was decided to appoint a chief executive officer for the fund by January-end and rope in several sovereign and pension funds to invest in it. In the meeting, possible infrastructure projects that could be taken up by the fund were discussed, finance minister Arun Jaitley said adding that sovereign funds and pension funds from UAE, Singapore, UK and Russia have shown interest to invest in NIIF.
“Several sovereign funds and pension funds across the world have expressed their willingness to participate and cooperate in various manners with the NIIF so the progress with regard to the suggestions which have come from UAE, Singapore, UK and Russia were discussed,” Jaitley told reporters after the meeting………………………………………..Full Article: Source

1MDB and the Money Network of Malaysian Politics

Posted on 30 December 2015 by VRS  |  Email |Print

Malaysian Prime Minister Najib Razak was fighting for his political life this summer after revelations that almost $700 million from an undisclosed source had entered his personal bank accounts. Under pressure within his party to resign, he called together a group of senior leaders in July to remind them everyone had benefited from the money.
The funds, Mr. Najib said, weren’t used for his personal enrichment. Instead, they were channeled to politicians or into spending on projects aimed at helping the ruling party win elections in 2013, he said, according to a cabinet minister who was present………………………………………..Full Article: Source

Russian state fund to keep deposits at VEB bank - minister

Posted on 30 December 2015 by VRS  |  Email |Print

Russian Economy Minister Alexei Ulyukayev told state television on Tuesday that a proposal to extend the sovereign National Wealth Fund’s deposits in troubled state development bank Vnesheconombank was already “practically a decided matter”.
The proposal, put forward by the Finance Ministry, is part of measures aimed at helping the ailing bank, hit by Western sanctions over Moscow’s role in the Ukraine crisis and facing bad loans and heavy external debt repayments………………………………………..Full Article: Source

SOFAZ not to cut expenditures

Posted on 30 December 2015 by VRS  |  Email |Print

Azerbaijan’s oil fund SOFAZ has no plans to cut budget expenditures for 2016, the fund told Trend. “The budget of the fund, as well as the state budget, is approved by the decree of the president of Azerbaijan in manats and is a financial document, expenditures of which should be executed,” the fund said. “In this regard, regardless of income level in the next year, SOFAZ is obliged to fulfill the expenditure budgeted.”
The revision of the budget expenditures of the fund due to the fact that expenditures of the SOFAZ are linked to expenditures of the consolidated budget, the limit of which is approved by law on the state budget, will be possible only in case of revision of the state budget of the country, according to the fund………………………………………..Full Article: Source

Largest 10 Direct Sovereign Wealth Fund Deals of 2015

Posted on 29 December 2015 by VRS  |  Email |Print

Large real estate developments like Manhattan West and vast portfolios of industrial properties dominate as some of the biggest sovereign wealth fund transactions in 2015. Despite lingering low oil prices, sovereign wealth funds’ interest in direct deals shows very little signs of abating.
Wealth funds backing these monstrous deals are the China Investment Corporation (CIC), Abu Dhabi Investment Authority (ADIA), Norway’s sovereign wealth fund and the Qatar Investment Authority (QIA). Surprisingly, two large technology plays made the top 10 list this year. A few widely reported deals such as ADIA and CIC buying interests in Autobahn Tank & Rast Holding Gmbh failed to make the final cut. Some notable financial advisors in these deals are UBS, Morgan Stanley and CBRE………………………………………..Full Article: Source

Wealth funds invested 60% more in real estate this year

Posted on 29 December 2015 by VRS  |  Email |Print

Sovereign funds had invested $1.9 trillion in equities and $900 billion in fixed income and short-term liquid assets at the end of 2014, according to Moody’s. They allocated just $400 billion to alternative investments including real estate, infrastructure, private equity and hedge funds, the ratings company said.
Real estate is particularly attractive after it returned an average of 14.1 percent last year for the funds, almost double their 7.4 percent target, according to a survey by Cornell University and advisory firm Hodes Weill & Associates published Dec. 2………………………………………..Full Article: Source

Russia may extend National Wealth Fund deposits in VEB for 5 years

Posted on 29 December 2015 by VRS  |  Email |Print

Russia’s finance ministry has proposed to extend the National Wealth Fund’s deposits in state development bank Vnesheconombank (VEB) for five years, the ministry’s document showed on Monday.
The ministry also suggested that the government should extend the Fund’s deposits in VEB at an interest rate of no less than 0.25 percent with a three-year grace period, the document published on the website for official drafts showed………………………………………..Full Article: Source

Kazakhstan looks to up sovereign real estate investments

Posted on 29 December 2015 by VRS  |  Email |Print

The Central Asian nation of Kazakhstan is seeking to boost returns on a possible $93 billion in wealth funds, and some of real estate’s biggest private equity players could be the beneficiaries.
Kazakhstan’s $64 billion National Fund has struggled to achieve an average return of 2 percent annually for the past five years, and Central Asia’s largest energy exporter is looking to real estate and other alternative investments as the price of oil flirts with an 11-year low and returns from commodities slump to levels last seen in 1999………………………………………..Full Article: Source

ADIA, Portuguese insurer garner bulk of QFII quota awards for December

Posted on 29 December 2015 by VRS  |  Email |Print

China’s State Administration of Foreign Exchange extended another $1 billion in quota capacity to the Abu Dhabi Investment Authority on Dec. 25, lifting the sovereign wealth fund’s total under the state’s qualified foreign institutional investor program to $2.5 billion, according to SAFE’s latest monthly listing of QFII quotas Monday.
The Christmas top-up leaves ADIA on par with Norges Bank and the Hong Kong Monetary Authority as the QFII participants with the biggest quotas, $2.5 billion apiece………………………………………..Full Article: Source

Saudi central bank’s foreign assets drop 1.9 pct in November

Posted on 29 December 2015 by VRS  |  Email |Print

Net foreign assets at Saudi Arabia’s central bank fell 1.9 percent in November from the previous month to 2.356 trillion riyals ($628 billion) as the government liquidated assets to cover a huge budget deficit caused by low oil prices.
Assets dropped 14.2 percent from a year earlier to their lowest level since October 2012, central bank data showed on Monday. They reached a record high of $737 billion in August last year before starting to shrink. The central bank acts as Saudi Arabia’s sovereign wealth fund and has born the brunt of financing the deficit, which totalled 367 billion riyals this year, according to a Finance Ministry statement on Monday………………………………………..Full Article: Source

CIC Declares Ownership of 2.1% Stake in SMI

Posted on 29 December 2015 by VRS  |  Email |Print

China Investment Corporation recently revealed that they own 2.1% of Semiconductor Manufacturing Int’l in a Form 13D/A disclosure that was filed with the SEC on Monday, December 28th. The investor owns 905,598,902 shares of the stock worth $4,691,002,312.
The reporting parties listed on the disclosure included China Investment Corporation, Bridge Hill Investments Limited and Country Hill Limited………………………………………..Full Article: Source

Temasek Maintains 12.5% Stake in Tuniu Corp

Posted on 29 December 2015 by VRS  |  Email |Print

Temasek Holdings (Private) Limited recently revealed that they own a 12.5% stake in Tuniu Corp in a Schedule 13G/A disclosure that was filed with the Securities and Exchange Commission (SEC) on Tuesday, December 22nd. The investor owns 24,583,333 shares of the stock worth about $412,016,661.
The reporting parties listed on the disclosure included Temasek Holdings (Private) Limited, Tembusu Capital Pte Ltd and Esta Investments Pte Ltd. The disclosure is available through EDGAR at this link………………………………………..Full Article: Source

‘Politicized’ Sovereign Funds Earn Lower Returns, Study Says

Posted on 28 December 2015 by VRS  |  Email |Print

Sovereign-wealth funds that are “highly politicized” earn lower returns on their stock-market investments than more independent peers, according to new academic research. An analysis of more than 1,000 sovereign-wealth fund investments in publicly traded companies found that shares in those companies rose less following a purchase by a sovereign-wealth fund compared with almost 6,000 comparable stock purchases by private investors.
The so-called SWF discount was worse when funds with strict government oversight bought shares. There was no discount when Norway’s independently managed sovereign-wealth fund bought shares, according to Veljko Fotak of the University at Buffalo……………………………………….Full Article: Source

5 Things to Know About Sovereign-Wealth Funds

Posted on 28 December 2015 by VRS  |  Email |Print

Sovereign-wealth funds have surged in number and assets since 2007, bolstered in part by the climb in oil prices. Now with oil’s slump, some funds are shrinking. But because many of them don’t disclose their assets or strategy, they represent a large black box in the global financial system, The Wall Street Journal r​eports​.
Here are five things to know about sovereign-wealth funds: 1. They have gotten bigger: The world’s sovereign-wealth funds together have assets of $7.2 trillion, according to the Sovereign Wealth Fund Institute, which studies them. That is twice their size in 2007………………………………………..Full Article: Source

Cash-Strapped Brazil Taps into Sovereign Wealth Fund

Posted on 28 December 2015 by VRS  |  Email |Print

Brazil dipped into its $620 million sovereign wealth fund on Tuesday as the government struggles to shore up public accounts that have been hit by the deepest economic recession in 25 years.
The government withdrew 855 million reais ($216 million) from the fund, or about one-third of its assets, as part of a strategy to boost public coffers, the Finance Ministry said in a statement Wednesday. The decision was made “in a context of economic contraction with a sharp drop in fiscal revenue and difficulties to cut mandatory expenses,” the statement read………………………………………..Full Article: Source

Brazil Withdraw R$855 Million from Sovereign Wealth Fund to Boost Public Coffers

Posted on 28 December 2015 by VRS  |  Email |Print

In order to strengthen the reserves of the National Treasury, the Brazilian government withdrew US $213 million (R$ 855 million) from the Sovereign Wealth Fund on Tuesday (22), a fund created with what was leftover from the tax collection of 2008 and which has been expended in the last few years.
According to the Ministry of Finance, the bailout had been predicted since May, when the government divulged the second evaluation report of income and expenses, and refers to money that was invested in government bonds………………………………………..Full Article: Source

Peru govt given key to sovereign wealth fund

Posted on 28 December 2015 by VRS  |  Email |Print

Peru’s government said it may resort to the country’s sovereign wealth fund for the first time to help President Ollanta Humala finance infrastructure spending in his final year in office.
The board of directors in charge of the fund, which includes finance minister Alonso Segura, central bank president Julio Velarde and a representative of the cabinet chief’s office, authorized the “temporary” use of up to 4.29bn soles (US$1.28bn). This is to prevent a drop in public spending in the face of dwindling tax revenues, the finance ministry said in a statement………………………………………..Full Article: Source

The Trouble With Sovereign-Wealth Funds

Posted on 28 December 2015 by VRS  |  Email |Print

Kazakhstan’s $55 billion sovereign-wealth fund helped pull the country through the global financial crisis and offered funding for the country’s bid to host the 2022 Winter Olympics. But the collapse in oil prices has hit Kazakhstan and its fund, Samruk-Kazyna JSC, hard.
In October, the fund borrowed $1.5 billion in its first syndicated loan to help a cash-strapped subsidiary saddled with a troubled oil-field investment. “Our oil company lost lots of its revenues,” says the fund’s chief executive, Umirzak Shukeyev. “Currently, we are trying to adjust to the situation.”……………………………………….Full Article: Source

SOFAZ not to cut expenditures in 2016

Posted on 28 December 2015 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) has no plans to cut budget expenditures for 2016, the fund told Trend. “The budget of the fund, as well as the state budget, is approved by the decree of the president of Azerbaijan in manats and is a financial document, expenditures of which should be executed,” the fund said. “In this regard, regardless of income level in the next year, SOFAZ is obliged to fulfill the expenditure budgeted.”
The revision of the budget expenditures of the fund due to the fact that expenditures of the SOFAZ are linked to expenditures of the consolidated budget, the limit of which is approved by law on the state budget, will be possible only in case of revision of the state budget of the country, according to the fund………………………………………..Full Article: Source

Samruk-Kazyna announces six agreements at Kazakhstan-China Business Council

Posted on 28 December 2015 by VRS  |  Email |Print

Samruk-Kazyna, the sovereign wealth fund of the Republic of Kazakhstan, has announced memorandums of understanding and agreements for five projects totaling US$4bn around the 3d meeting of the Kazakhstan-China Business Council (KCBC).
The agreements reached at the KCBC demonstrate the deepening relationship between Kazakh and Chinese business, the two nations at the heart of the New Silk Road. Attended by more than 350 representatives from governments and business of both countries, the event included key note remarks from Kazakhstan’s Prime Minister Karim Massimov, Samruk-Kazyna’s CEO Umirzak Shukeyev………………………………………..Full Article: Source

Norway’s oil fund takes France’s Alstom off ethics risk list

Posted on 28 December 2015 by VRS  |  Email |Print

Norway’s $837 billion sovereign wealth fund, the world’s largest, has removed French engineering group Alstom SA off its ethics monitoring list, the fund said on Tuesday. The fund said Alstom was put on the list in 2011 when Norway’s finance ministry also put the French company under observation based on an assessment of possible risks of corruption in its operations.
The observation period was set for four years with the ministry asking the fund’s ethics council to monitor the company and follow developments in its anti-corruption efforts. The Norwegian central bank, which supervises the sovereign wealth fund, said on Tuesday that it had decided to end the monitoring on the advice of the fund’s ethics council………………………………………..Full Article: Source

The world’s biggest wealth fund just weighed in on the debate dividing Wall Street

Posted on 28 December 2015 by VRS  |  Email |Print

Norges Bank Investment Management has sent a letter to the Securities and Exchange Commission supporting IEX Group, the stock-trading venue at the center of Michael Lewis’ book “Flash Boys.”
The Norwegian sovereign wealth fund, which manages $824 billion in assets and ranks as the biggest fund of its type in the world, is the latest market participant to weigh on IEX’s application to become an exchange………………………………………..Full Article: Source

Russian SWFs have shown investment interest in NIIF: FinMin

Posted on 28 December 2015 by VRS  |  Email |Print

Stressing that Russian companies want to be part of ‘Make in India’, Finance Ministry today said Russian sovereign wealth funds, including Rusnano, have shown keen interest to invest in National Investment and Infrastructure Fund (NIIF).
“Very positive discussions in India Russia CEOs meeting. Great interest from Russian side to invest in India and be part of Make in India,” Economic Affairs Secretary Shaktikanta Das tweeted. Hard selling India as an attractive investment destination, Prime Minister Narendra Modi has invited Russian CEOs to invest in sectors like infrastructure, aerospace and diamond………………………………………..Full Article: Source

DLF gets Rs 1,992 crore from GIC for stake sale in 2 projects

Posted on 28 December 2015 by VRS  |  Email |Print

India’s largest real estate firm DLF has said that it has received Rs 1,992 crore from Singapore’s sovereign wealth fund GIC after the completion of its deal to sell 50 per cent stake in two of its new projects in Delhi. DLF had earlier announced that it has signed an agreement with GIC to enter into a joint venture to invest in two upcoming projects located in central Delhi.
The deal was later approved by the Competition Commission of India. “DLF Ltd has now informed BSE that subsequent to receipt of CCI approval and having met other preclosing conditions, the funding for the above said transaction has been concluded on December 23, 2015 with the receipt of Rs 1,992 crore from GIC, Singapore’s sovereign wealth fund,” the company said in a filing to the Bombay Stock Exchange. ……………………………………….Full Article: Source

Libyan Investment Authority assets should remain frozen says chairman

Posted on 28 December 2015 by VRS  |  Email |Print

Responding to calls by breakaway factions to unfreeze Libya’s assets, Mr AbdulMagid Breish, chairman and CEO of the Libyan Investment Authority (LIA), says:“While important negotiations on a National Unity Government continue, it is imperative that the Libyan Investment Authority’s assets remain frozen to safeguard them against the continued threat of misappropriation and corruption”.
“Rogue parallel institutions outside the country have been appealing to the international community to loosen the sanction regime on the LIA’s assets in order to gain access to these funds.It would be dangerous, and deeply counter-productive, to let the prospect of peace provide an excuse for unfreezing any of the LIA’s assets,” says Breish………………………………………..Full Article: Source

Qatar Investment Authority to be stakeholder in $8.6 billion Manhattan West project

Posted on 28 December 2015 by VRS  |  Email |Print

A joint venture was recently formed between Brookfield Property Partners LP and Qatar Investment Authority (QIA) for a Manhattan West development project in New York City. The estimated value of the completed project is $8.6 billion, with Brookfield selling a 44 percent interest in the development to QIA.
“Brookfield has enjoyed a long-standing, successful relationship with QIA and we are thrilled that they share our vision for this transformative project,” Brookfield Asset Management CEO Bruce Flatt said. “We are pleased to expand our relationship with Brookfield and invest in this world-class project,” Qatar Investment Authority CEO Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani said………………………………………..Full Article: Source

Gov’t, private reps likely to manage Wealth Fund

Posted on 28 December 2015 by VRS  |  Email |Print

The David Granger administration hopes that the proposed Sovereign Wealth Fund (SWF) will be managed by a hybrid of government and private individuals, according to Minister of Governance Raphael Trotman.
“It is a well-known phenomenon that where governments are too involved in managing funds, they don’t always function at an optimum level especially if these are funds to be invested. It is best when funds are managed partially between government and private sector professionals. Some countries even have funds managed out of the country,” he said………………………………………..Full Article: Source

Abu Dhabi sovereign fund looks beyond trophy sites and major cities

Posted on 21 December 2015 by VRS  |  Email |Print

The four-star Renaissance hotel in Raleigh, N.C., and the cluster of 75 residential apartments in east London called Fizzy Canning Town have little in common except that they share a landlord based in a Middle Eastern desert thousands of miles away.
That landlord—the Abu Dhabi Investment Authority, or ADIA—has become one of the largest property owners in the world. Increasingly, its army of Persian Gulf-based deal makers is looking beyond the trophy properties that have attracted sovereign-wealth funds in the past to a broader range of cities and buildings………………………………………..Full Article: Source

Consortium closes in on City Airport

Posted on 21 December 2015 by VRS  |  Email |Print

A huge consortium including the sovereign wealth fund of Kuwait has been short-listed to bid for the airport. A mega-consortium of some of the world’s most powerful sovereign wealth and pension funds is among the leaders in the £2bn race to buy London City Airport.
A team made up of five suitors, including Wren House Infrastructure, which is an arm of the Kuwait Investment Authority, is believed to be on a shortlist of bidders that will be invited to make second-round offers for the airport in February. The group also includes Canadian funds Ontario Teachers’ Pension Plan (OTPP), Borealis Infrastructure, AIMCo and Hermes, the British investment manager………………………………………..Full Article: Source

Accel Partners sells fractional stake in Flipkart to Qatar Investment Authority for $100 million

Posted on 21 December 2015 by VRS  |  Email |Print

Accel Partners has sold a fractional stake in Flipkart to Qatar Investment Authority for $100 million (about Rs 650 crore), in a deal that values India’s biggest online marketplace at $15 billion, according to two people aware of the transaction. Accel, the first venture investor in Flipkart, remains the second-largest shareholder in the ecommerce company behind New York-based hedge fund Tiger Global Management.
The venture firm’s latest transaction is its most significant involving Flipkart since selling the ecommerce company’s shares worth more than $80 million to undisclosed buyers last year. “The (Accel-QIA) deal closed in November,” one person said. “Given that valuation numbers are expected to stabilise, this is the right time to book returns.” Both the sources declined to be identified………………………………………..Full Article: Source

China state fund CIC eyes German investments

Posted on 21 December 2015 by VRS  |  Email |Print

Chinese sovereign wealth fund China Investment Corporation (CIC) [CIC.UL] is eyeing investments in Europe’s biggest economy, its chief investment officer has told a German business paper. “We are looking at a variety of objects,” Li Keping, who also serves as CIC’s vice chairman and president, told Handelsblatt in an interview, excerpts of which were published on Sunday.
He said the fund, which manages about $750 billion of China’s foreign exchange reserves, was particularly interested in firms involved in ‘Industrie 4.0′, a German government initiative backed by lobby groups in engineering, electronics and high-tech to address issues such as worker skills, data transfer standards and data security………………………………………..Full Article: Source

1MDB scandal rocks Malaysian politics

Posted on 21 December 2015 by VRS  |  Email |Print

The year in Malaysia started with the debt struggles of state investment firm 1Malaysia Development Berhad (1MDB) and how it got into the mess in the first place. And the same questions remain as the year draws to a close.
The 1MDB, which is owned by the Finance Ministry, was set up by Prime Minister Najib Razak in 2009 and he heads its board of advisers. In July, Datuk Seri Najib was confronted with another scandal when some US$680 million (S$961 million) in cash was discovered in his bank accounts by investigators probing 1MDB. The Malaysian government says it is working hard to erase 1MDB’s debts………………………………………..Full Article: Source

How 1MDB overpaid for its power assets

Posted on 21 December 2015 by VRS  |  Email |Print

Most of 1MDB’s power assets were acquired within a 16-month time frame between March 2012 and July 2013. The spending spree raised many questions at the time, which remain unsatisfactorily unanswered as at writing time. The underlying logic of buying over independent power producers (IPPs), as understood by market observers, would likely be the strong cash flow.
In simple terms, IPPs have a steady stream of cash flow by virtue of their power purchase agreements (PPAs), which are iron-clad agreements that guarantee a steady stream of money in exchange for a steady level of power generation as stipulated in the agreement………………………………………..Full Article: Source

1MDB’s love affair with the Arab world

Posted on 21 December 2015 by VRS  |  Email |Print

When it was first set up as Terengganu Investment Authority (TIA) in early 2009, 1Malaysia Development Bhd (1MDB) set out to drive strategic development of national interests. After it was taken over by the federal government by mid-2009, however, the meaning of ‘strategic’ seems to have taken an Arabic flavour.
The company’s board of advisers, for starters, count two prominent Middle Easterners as advisers - former Qatar prime minister Sheikh Hamad Bin Jassim Bin Jabr Al-Thani as special adviser while adviser Khaldoon Khalifa Al Mubarak is CEO of Mubadala Development Co, an investment company owned by the Abu Dhabi emirate in the United Arab Emirates………………………………………..Full Article: Source

Samruk Kazyna Top Management to Be Reduced by Nearly Half as Fund Undergoes Transformation

Posted on 21 December 2015 by VRS  |  Email |Print

The top management of the Samruk Kazyna Sovereign Wealth Fund will shrink from 16 to 9 managing directors as part of its transformation process, Chair of the Samruk Kazyna Board Umirzak Shukeyev announced Dec. 8 at the congress dedicated to transformation of the state-owned fund, its website reported.
While presenting the new functional model of the fund, Shukeyev focused his attention on the fact that Samruk Kazyna will have three basic directions in the future: commercial unit, including portfolio management of current assets; corporate unit, including finance, human resource management and operational support; and monitoring, which will incorporate compliance as a new function………………………………………..Full Article: Source

Norway Oil Fund Plans Infrastructure Foray in 2017

Posted on 18 December 2015 by VRS  |  Email |Print

Yngve Slyngstad, chief executive of Norway’s oil fund, one of Europe’s largest investors, said Thursday that the fund would be ready to buy infrastructure around 2017 if mandated by the Norwegian parliament, but it would proceed more slowly than it did with real estate.
“We are signaling a relatively slow buildup,” Mr. Slyngstad told The Wall Street Journal in an interview. “It took a little bit more than a year from [when] we got the mandate to invest in real estate until we made our first investment, and that will clearly also be the case for infrastructure.”……………………………………….Full Article: Source

Norway SWF names CEO of real estate group

Posted on 18 December 2015 by VRS  |  Email |Print

Norway’s $840 billion sovereign wealth fund named Karsten Kallevig as the head of its new real estate group, formed this summer to expand the fund’s real estate footprint worldwide. Kallevig joined Norges Bank Investment Management, a division of Norway’s central bank that manages the country’s substantial oil wealth, in 2010 and helped Norges amass an $18 billion real estate portfolio.
In New York City, Norges is in contract to partner on Trinity Real Estate’s 11-building Hudson Square portfolio, in a deal that values the real estate at $3.55 billion. Norges will pay $1.56 billion for a 44 percent share in a 75-year ownership stake………………………………………..Full Article: Source

Norway’s wealth fund has spent $23.7 bln in property in 2015

Posted on 18 December 2015 by VRS  |  Email |Print

Norway’s $845-billion sovereign wealth fund, the world’s largest, has invested 208 billion crowns ($23.73 billion) in real estate in 2015, the fund said on Friday in presentation material.
The fund has a mandate to invest up to 5 percent of its value in real estate. ($1 = 8.7644 Norwegian crowns)……………………………………….Full Article: Source

Azerbaijan’s Oil Fund: part of trade & office center ‘Actor Gallery’ rented for long term

Posted on 18 December 2015 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) has clarified the information of several Russian mass media about the closure of SOFAZ-owned commercial & office center “Actor Gallery” for reconstruction. SOFAZ reports that part of this center (add: 16, Tverskaya Street, Moscow) will be rented for a long term.
“Please be informed that centre’s 3-storey part with shopping facilities will be rented for a term of 32 years to one of the famous brands. This will have a positive impact on the cost of the building and profitability of investments made by SOFAZ at the time of its purchase,” the Fund said in a statement………………………………………..Full Article: Source

The Future Fund should not be used to pay off deficits

Posted on 18 December 2015 by VRS  |  Email |Print

The government’s budget update was an occasion to despair about the point of the Future Fund, Australia’s $118 billion sovereign wealth fund set up by the Howard government in 2006 mainly from the proceeds from the sale of Telstra. It seems it’s going to be largely wasted, and not invested in the proper sense of the word.
It turns out — highly conveniently for the government — that the first year of the Turnbull government’s (tiny) scheduled budget surplus in the financial year ending June 2021 is the same year the Future Fund’s assets are able to legally be drawn down………………………………………..Full Article: Source

$850M 1MDB payment sent to Virgin Island firm: WSJ

Posted on 18 December 2015 by VRS  |  Email |Print

A deeply indebted Malaysian investment fund may have sent as much as $850 million to a British Virgin Islands entity set up with a name closely resembling one owned by an Abu Dhabi sovereign wealth fund, the Wall Street Journal reported, citing documents and people familiar with the matter.
Last year, a unit of 1Malaysia Development Bhd., or 1MDB, transferred funds to an entity called “Aabar Investments PJS Ltd.,” which has a name closely resembling Aabar Investments PJS, a subsidiary of Abu Dhabi’s International Petroleum Investment Co. (IPIC), the WSJ said………………………………………..Full Article: Source

1MDB sent $ 850 mil to entity set up to appear owned by Abu Dhabi wealth fund

Posted on 18 December 2015 by VRS  |  Email |Print

A troubled Malaysian state investment fund sent at least $850 million last year to an offshore entity set up to appear that it was owned by an Abu Dhabi sovereign-wealth fund, a transfer which deepens the mystery over billions of dollars that are unaccounted for, according to documents reviewed by The Wall Street Journal and people familiar with the matter.
The 1Malaysia Development Bhd. fund, or 1MDB, set up by Malaysian Prime Minister Najib Razak in 2009 to promote economic development, is under investigation in at least six countries over a broad array of allegations that money was siphoned off for political spending and for personal gain. One focus of investigation is $2.4 billion in payments that 1MDB said it made to a unit of Abu Dhabi’s International Petroleum Investment Co., or IPIC, as part of a deal involving the Malaysian fund’s purchase of power plants………………………………………..Full Article: Source

Temasek will wait before deciding on StanChart stake

Posted on 18 December 2015 by VRS  |  Email |Print

Standard Chartered got a boost from a report that a sovereign wealth fund was willing to give it more breathing room to successfully complete its turnaround, before deciding what to do with its stake in the lender. Reuters reported that, for the moment, Singapore´s SWF, Temasek, would hold off from deciding the fate of its approximately £2.6bn stake in the Asia-focused lender.
In a vote of confidence for the bank, in a research note sent on 16 December analysts at JP Morgan said that following the recent successful $5.2bn rights issue and after the Bank of England´s stress tests, in their view investors´ capital concerns had been adressed………………………………………..Full Article: Source

Narayana Hrudayalaya raises $27m from Singapore’s GIC, other anchor investors

Posted on 18 December 2015 by VRS  |  Email |Print

Healthcare firm Narayana Hrudayalaya Ltd on Wednesday raised nearly $27 million (Rs.184 crore) through anchor investors ahead of its initial public offering (IPO) on Thursday. The anchor book is that portion of the IPO which bankers allot to institutional investors on a discretionary basis.
Foreign institutional investors, including Fidelity, Government of Singapore’s GIC and Harvard Management Co., bought the firms share. Domestic institutions which subscribed to the anchor book include mutual funds from asset managers such as Birla Sunlife, SBI, ICICI Prudential, Reliance Capital and HDFC Mutual Fund………………………………………..Full Article: Source

Natural Resources: New Fiscal Regime Under Development

Posted on 18 December 2015 by VRS  |  Email |Print

The Government is working with the Commonwealth Secretariat to finalise a new fiscal regime for the mining of sand, aragonite and other Bahamian natural resources, the Minister of the Environment and Housing said. Kenred Dorsett, while the House of Assembly on the Sovereign Wealth Fund Bill, said: “The Commonwealth Secretariat is in town, and we are seeking to finalise the new fiscal and legislative regime for mining in the country; for instance, the use of sand, aragonite and other natural resources.
As for the creation of a sovereign wealth fund, Dorsett said it would be established to mainly save and invest surplus funds gained from oil exploration, natural gas, minerals and other natural resources. Sovereign wealth funds, such as Singapore’s Temasek, have been established by many Middle Eastern and Asian nations as vehicles to hold multi-billion dollars worth of assets and revenues……………………………………….Full Article: Source

Canadian-Abu Dhabi venture buys $3 bln real estate portfolio

Posted on 18 December 2015 by VRS  |  Email |Print

A joint venture between Canadian pension fund PSP Investments and the Abu Dhabi Investment Authority has acquired a portfolio of U.S. industrial properties from Exeter Property Group for $3.15 billion, the buyers said. Canadian pension funds and sovereign wealth funds are looking to buy real estate assets to diversify their investments and offset the effects of volatility in global equity markets and economic uncertainty.
“This investment is consistent with PSP Investments’ real estate strategy to make direct investments in sizeable, core industrial assets in key markets alongside experienced partners who share our long-term investment horizon,” said Neil Cunningham, PSP’s global head of real estate investments………………………………………..Full Article: Source

Petrodollars And Sovereign Wealth Funds

Posted on 18 December 2015 by VRS  |  Email |Print

Discussion of sub-$50 crude oil on SWFs (Sovereign Wealth Funds) and the resulting reversal in flows to equity, bond, commodity, capital and asset markets. Brief discussion of ED, or “euro/dollar,” liquidity. Brief discussion of the effects of a potential dollar melt up.
Funded by oil revenues, mostly, it is estimated that sovereign wealth funds have amassed at least $7 trillion in assets, and quite likely significantly more than that…. That sets up a sort of petro-stock flow, operating in an almost direct manner exactly as the wrongly characterized petro-dollar is thought to………………………………………..Full Article: Source

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