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Sovereign Wealth Funds Briefing - Archive | January, 2016

Norway’s oil fund wary of corruption in Brazil firm

Posted on 29 January 2016 by VRS  |  Email |Print

Norway’s state pension fund, the world’s biggest sovereign wealth fund, said on Thursday it had placed Brazilian oil group Petrobras “under observation” because of corruption fears following a kickbacks scandal. The move means that the ethics council that advises the Norwegian central bank on the fund’s investments will follow developments closely, which could lead to the fund divesting its holding.
“Should further cases of gross corruption be revealed in Petrobras’ operations in the future and the company cannot satisfy that the anti-corruption programme is being complied with and effectively improved, the condition for exclusion may be met,” the council said in a statement………………………………………..Full Article: Source

Norway wealth fund’s ethics watchdog probing 14 corruption cases

Posted on 29 January 2016 by VRS  |  Email |Print

The ethics watchdog for Norway’s $800 billion sovereign wealth fund, the world’s largest, is stepping up its scrutiny of companies the fund invests in to make sure they are not involved in corruption, an official at the watchdog told Reuters.
Eli Ane Lund, administrative leader of the ethics council, said the watchdog was currently investigating 14 companies for suspected corruption across nine countries. These include Brazilian oil firm Petrobras, which is currently mired in the country’s biggest ever corruption scandal, she said, while declining to name the other companies………………………………………..Full Article: Source

Norway accepts hostile takeover by Vonovia

Posted on 29 January 2016 by VRS  |  Email |Print

Norway said its $800billion sovereign wealth fund has accepted Vonovia’s hostile takeover bid for rival Deutsche Wohen. The fund holds 4.6% of the shares in Vonovia and 6.9% in Deutsche Wohen.
A spokeswoman for the Sovereign Fund said it thought the move was in “the best interest” of the shareholders. She said: “The rationale behind this is that we see advantages of scale, as well as cost benefits.”……………………………………….Full Article: Source

Norway’s oil wealth is an enviable nest egg in hard times

Posted on 29 January 2016 by VRS  |  Email |Print

When times get tough, it never hurts to have €700bn stashed away like Norway does in the world’s biggest sovereign wealth fund, to cushion the blow of plunging oil prices. Oslo has prudently tucked away most of its oil money since the 1990s in order to be able to finance its generous welfare state indefinitely.
Invested in stocks, bonds and real estate, the fund is now worth about 6.96-trillion kroner (€734bn), equivalent to about six annual budgets or more than €137,000 for each of the country’s 5.2-million inhabitants………………………………………..Full Article: Source

Should you follow the Future Fund into cash?

Posted on 29 January 2016 by VRS  |  Email |Print

At the Future Fund’s quarterly portfolio update, the fund’s chairman and founder Peter Costello expressed his pride that the fund had been recognised by the Central Banking Journal as the sovereign investor of the year.
Australia’s $118 billion sovereign wealth fund has built a reputation as one of the most astute investment firms in the world and the award recognised the fund’s conservatism at a time when low returns compelled many investors to take more risk………………………………………..Full Article: Source

China sovereign wealth fund joins $6.3 bln bid for Australia’s Asciano

Posted on 29 January 2016 by VRS  |  Email |Print

Australian port operator Qube Holdings Ltd said on Thursday a Chinese sovereign wealth fund was taking part in its A$8.9 billion ($6.3 billion) bid for rail giant Asciano Ltd, potentially complicating regulatory approval amid a political backlash against Chinese investors.
Qube revealed the participation of China Investment Corp (CIC) as it made the binding cash-and-share offer for Australia’s largest rail freight network, which narrowly bests an offer from Canadian infrastructure giant Brookfield Asset Management Inc………………………………………..Full Article: Source

Australia-led group bids $6.3bn for logistics firm Asciano

Posted on 29 January 2016 by VRS  |  Email |Print

An Australian-led consortium including a Chinese sovereign wealth fund bid US$6.30 billion for ports and rail operator Asciano Thursday, kicking off a bidding war with a Canadian asset manager.
Qube Holdings — leading a group including China’s CIC Capital Corporation, the Canada Pension Plan Investment Board and investment group Global Infrastructure Partners — said it had submitted the offer with an implied value of Aus$9.17 per Asciano share. That valued the bid at Aus$8.95 billion………………………………………..Full Article: Source

Are sovereign wealth funds big sellers in Indian stocks?

Posted on 29 January 2016 by VRS  |  Email |Print

Are sovereign wealth funds (SWFs) big sellers in Indian stocks? The conventional answer to that question is a yes, but data points to another intriguing trend — the rising share of direct sovereign fund investments in India. Assets under management (AUM) of SWFs in Indian equities climbed 14% to Rs 1.74 lakh crore in December 2015 from Rs 1.53 lakh crore a year ago, data compiled by ETIG shows.
An increase in SWF assets at a time of poor market returns shows that they have been buying Indian equities directly though they are sellers in foreign funds where they have parked their money………………………………………..Full Article: Source

Govt does not monitor Temasek, GIC’s investments in haze-linked firms: MOF

Posted on 29 January 2016 by VRS  |  Email |Print

Mr Heng Swee Keat, Singapore’s Finance Minister, says that commercial decisions by GIC and Temasek Holdings are made independent of state involvement. The Government only monitors the performance of haze-linked companies that sovereign wealth fund GIC and investment firm Temasek Holdings have investments in, said finance minister Heng Swee Keat, and not their commercial decisions.
Nonetheless, both are fully supportive of zero-burning policies for land clearance, he said. “GIC has also the Government that the palm oil companies in Indonesia that GIC invests in have confirmed that they observe zero-burning policies for their plantations………………………………………..Full Article: Source

SAMA’s net foreign assets reach SR2.283 trillion

Posted on 29 January 2016 by VRS  |  Email |Print

Net foreign assets at Saudi Arabian Monetary Agency (SAMA) declined 3.1 percent in December from the previous month to SR2.283 trillion ($609 billion), the central bank announced. Assets dropped 15.9 percent from a year earlier to their lowest level since August 2012. They reached a record high of $737 billion in August 2014 before starting to shrink.
The central bank, which acts as Saudi Arabia’s sovereign wealth fund, has been drawing down its assets to cover a huge state budget deficit caused by a plunge in oil prices. The bulk of foreign assets are believed to be denominated in US dollars………………………………………..Full Article: Source

Sainsbury’s likely to find support from Qatar Investment Authority for Home Retail Group bid

Posted on 29 January 2016 by VRS  |  Email |Print

Qatar Investment Authority (QIA), which holds a 25% stake in Sainsbury’s, is believed to have backed the supermarket chain it revises its offer for the Home Retail Group acquisition. This backing from QIA seen as significant is important as the takeover process has to complete before 2 February, reported The Times newspaper.
Investors of Home Retail have expressed dissatisfaction as the board did not counsel them when the offer was first made by Sainsbury’s in November, reported. Toscafund and Schroders, among the primary five investors in Home Retail, are believed to have brought both the sides for a new deal………………………………………..Full Article: Source

Sovereign Funds Vs. Asset Managers: The Big Picture

Posted on 29 January 2016 by VRS  |  Email |Print

A number of asset managers who focus on institutional investors such as commodity-based sovereign wealth funds have been ravaged with redemptions. The rapid descent of oil prices flummoxed wealth fund chiefs. In response to the oil glut, the money management spigot for investment managers running listed equity strategies has slowed.
Furthermore, Middle Eastern sovereign funds have been dumping some hedge funds (some shuttered operations), while Canadian asset giants shift more focus toward private credit, real estate and infrastructure investments. However, for some cash-rich sovereign wealth funds like the Abu Dhabi Investment Authority (ADIA), the sustained low price of oil has a negligible effect on their real estate investment activities………………………………………..Full Article: Source

Oman fund, Iran’s Khodro sign MoU for $200 mln auto venture

Posted on 28 January 2016 by VRS  |  Email |Print

An Omani sovereign wealth fund has signed an understanding with Iran’s biggest auto maker, Iran Khodro Industrial Group, to study a proposal for a $200 million auto plant in Oman, a fund official said on Wednesday.
The memorandum of understanding is one of the first signed between a major Iranian company and a Gulf Arab state since international sanctions against Iran were lifted earlier this month. Traditionally, Oman has had closer ties to Iran than its Arab neighbors………………………………………..Full Article: Source

Oxford, Abu Dhabi Investment Authority face off on EB-5

Posted on 28 January 2016 by VRS  |  Email |Print

Two of the largest foreign investors in New York City real estate are at odds over the value of EB-5 investment, a funding vehicle popular among developers that provides foreign investors a path to U.S. citizenship. Tom Arnold, head of real estate in the Americas for the Abu Dhabi Investment Authority, warned against falling into “quick assumptions” about the program’s benefits, calling it a “cheap ticket” to American citizenship.
“This EB-5 thing is really controversial,” Arnold, whose employer has invested more than $2 billion in Manhattan real estate according to Real Capital Analytics, said at a Wednesday conference hosted by the ULI New York. “It’s up there with abortion and global warming.”……………………………………….Full Article: Source

Bad News For Stocks As Sovereign Wealth Funds Feel Pinch Of Cheap Oil

Posted on 28 January 2016 by VRS  |  Email |Print

Investors are facing stiff challenges in 2016, as the year opened with an explosion of selling, as if someone flipped a switch at the end of 2015 and released an onslaught of angry bears. While markets are often emotional, the fundamentals have not changed.
The simple question everyone is asking is, “Why?” If you look at the standard answers in the media and from many in the financial world you will see the same explanations: China growth uncertainty, extensive declines in oil and commodity prices, the Federal Reserve tightening, global geopolitical uncertainties, and a number of additional irritants like the strength of the U.S. dollar……………………………………….Full Article: Source

Australia’s Future Fund Returns 8.4% in 2015, Expands Cash Level

Posted on 28 January 2016 by VRS  |  Email |Print

Australia’s sovereign wealth fund returned 8.4 percent last year to beat global and domestic benchmarks, as it increased cash holdings to pare risk. Future Fund, which manages A$118.4 billion ($83 billion), trimmed its global stock and private-equity investments, it said in an e-mailed statement Wednesday.
It warned that future returns may be lower as central banks withdraw monetary stimulus. “We have gradually reduced the level of risk in the portfolio through 2015, reflecting our view of the investment environment,” Managing Director David Neal said in the statement………………………………………..Full Article: Source

Future Fund on defensive with 20pc cash weighting

Posted on 28 January 2016 by VRS  |  Email |Print

The managing director of the Future Fund has warned investors are not being adequately compensated for a rising number of risks in global markets, including energy prices, volatility in China, Europe’s refugee crisis and the US Federal Reserve’s actions.
The $118 billion sovereign wealth fund, which reported an 8.4 per cent return for 2015, has increased its weighting to cash above 20 per cent of its portfolio as it remains concerned about valuations in global markets, even as sharemarkets have been battered in a tumultuous start to 2016………………………………………..Full Article: Source

Happy returns for the Future Fund, for now

Posted on 28 January 2016 by VRS  |  Email |Print

As Australia’s $118 billion sovereign wealth fund prepares to celebrate its first decade in operation, it can look back with some satisfaction at a track record of beating its benchmark through years of volatile investment markets.
But, as the Future Fund has been warning would happen for the past couple of years, its returns slowed sharply in the latest six-month period as global markets shuddered at the prospect of some central banks winding down stimulus and growing divergence between major economies………………………………………..Full Article: Source

‘Much to worry about’, says Future Fund boss

Posted on 28 January 2016 by VRS  |  Email |Print

Addressing media at a portfolio update to 31 December 2015, Future Fund chairman Peter Costello said returns are likely to be harder to come by in the immediate future. The Future Fund, which like all sovereign wealth funds around the world pays no tax, returned a healthy 8.4 per cent throughout 2015.
However, the return for the last six months of the year was only 1.0 per cent. Mr Costello put the difficulties facing the Future Fund down to the phenomenon of central banks “pumping lots of money at very low interest rates” into the global economy………………………………………..Full Article: Source

Are sovereign wealth funds big sellers in Indian stocks?

Posted on 28 January 2016 by VRS  |  Email |Print

Are sovereign wealth funds (SWFs) big sellers in Indian stocks? The conventional answer to that question is a yes, but data points to another intriguing trend — the rising share of direct sovereign fund investments in India. Assets under management (AUM) of SWFs in Indian equities climbed 14% to Rs 1.74 lakh crore in December 2015 from Rs 1.53 lakh crore a year ago, data compiled by ETIG shows.
An increase in SWF assets at a time of poor market returns shows that they have been buying Indian equities directly though they are sellers in foreign funds where they have parked their money. Most SWFs have no direct presence in Indian equities but those that do have been increasing their exposure to the country………………………………………..Full Article: Source

Norway’s oil wealth, an enviable nest egg in hard times

Posted on 28 January 2016 by VRS  |  Email |Print

When times get tough, it never hurts to have 700 billion euros stashed away like Norway does in the world’s biggest sovereign wealth fund to cushion the blow of plunging oil prices. Oslo has prudently tucked away most of its oil money since the 1990s in order to be able to finance its generous welfare state indefinitely.
Invested in stocks, bonds and real estate, the fund is now worth around 6.96 trillion kroner (S$1.13 trillion), equivalent to around six annual budgets or more than 137,000 euros for each of the country’s 5.2 million inhabitants………………………………………..Full Article: Source

Norway’s oil fund backs Vonovia bid for Deutsche Wohnen

Posted on 28 January 2016 by VRS  |  Email |Print

Norway’s $800 billion sovereign wealth fund, the world’s largest, has accepted Vonovia’s hostile takeover bid for rival Deutsche Wohnen , it said on Wednesday.
“We have accepted the offer from Vonovia, which we think is in the best interest of the shareholders. The rationale behind this is that we see advantages of scale, as well as cost benefits,” a spokeswoman for the fund told Reuters, adding that it would also reduce the competition between the two companies………………………………………..Full Article: Source

Boom, Bust, or Broke: What ‘Replumbing’ the Permanent Fund Would Look Like

Posted on 28 January 2016 by VRS  |  Email |Print

“Re-plumbing” the Permanent Fund is the most significant piece of Walker’s plan to close the budget deficit, projected to be $3.5 billion in Fiscal Year 2017. Attorney General Craig Richards told State Affairs members Tuesday that SB 128 will transition Alaska from an oil-based budget to one based on financial assets.
Stocks have performed better than oil since the Great Depression. They have significantly outperformed oil since about 1950, as Harvard Kennedy School of Government Fellow Malan Rietveld showed the committee………………………………………..Full Article: Source

Alaska still richest oil economy on earth, even with big budget deficit

Posted on 28 January 2016 by VRS  |  Email |Print

Alaska may have a nearly $4 billion budget deficit looming over its head, but a Harvard researcher brought to testify before the Alaska Legislature said we’re still better off than most other places.
“Alaska is the richest country in the world based on sovereign wealth fund assets,” Malan Rietveld told the legislature Tuesday. Rietveld misspoke about Alaska being a country, but was right about Alaska’s big oil money investments………………………………………..Full Article: Source

Aberdeen Sees Sovereign Assets Shrink $19 Billion in Two Years

Posted on 28 January 2016 by VRS  |  Email |Print

Aberdeen Asset Management Plc has seen sovereign wealth-fund assets shrink by about 13 billion pounds ($19 billion) since a peak in 2013 as clients from oil-dependent countries cashed out and markets slumped.
Chief Executive Officer Martin Gilbert said SWF’s now represent about 2.5 percent, or 7 billion pounds, of Aberdeen’s total assets under management. That’s down from 10 percent two years ago. Aberdeen rose Wednesday after the company said outflows slowed in the first quarter and more cost cuts were announced………………………………………..Full Article: Source

Future Fund shifts to cash as global investment risks rise

Posted on 27 January 2016 by VRS  |  Email |Print

Australia’s sovereign wealth fund has warned that the unwinding of economic stimulus and record low interest rates is likely to create more instability on global financial markets. The Future Fund today reported growth of 8.4 per cent for the recently ended calendar year, taking its value to $118.4 billion, but chairman Peter Costello outlined a continued cautious focus given the recent volatility.
“The run-up in asset prices has been driven by record low interest rates and … the withdrawal of monetary stimulus would see prospective returns lower than in recent years,” former Australian treasurer Mr Costello told reporters………………………………………..Full Article: Source

Australia’s Future Fund delivers 8.4 pct, lowest return since 2011

Posted on 27 January 2016 by VRS  |  Email |Print

Australia’s sovereign wealth manager, the Future Fund, on Wednesday said it returned 8.4 percent in the year ending Dec. 31, its lowest annual return since 2011 as it boosts cash holdings amid greater global markets volatility.
Global markets have been unusually volatile since last August, largely led by fears of slowing growth in China and uncertainty over the timing of U.S. interest rate hikes. Future Fund Managing Director David Neal said the fund has “gradually reduced the level of risk” in the portfolio through 2015………………………………………..Full Article: Source

Qube seeks passive CIC role

Posted on 27 January 2016 by VRS  |  Email |Print

Chris Corrigan’s Qube Holdings has sought assurances from its partner Global Infrastructure Partners that Chinese sovereign wealth fund China Investment Corporation will play only a passive role in their joint bid for Asciano in the wake of the backlash against a Chinese company’s lease of the Port of Darwin.
As it emerged yesterday that CIC held a small stake in Asciano as part of its global infrastructure portfolio, well below the 5 per cent threshold requiring a substantial shareholding notice, it is understood Qube has taken active steps to ensure the involvement of CIC will not further stoke concerns about Chinese investment in key Australian infrastructure assets………………………………………..Full Article: Source

Temasek said to discuss potential sale of Keppel stakes in M1, Keppel Reit

Posted on 27 January 2016 by VRS  |  Email |Print

Temasek Holdings is discussing options for portfolio companies Keppel Corp and Sembcorp Industries, ranging from divesting their non-core assets to selling shares, as the two Singaporean rig builders grapple with the oil-price slump, people with knowledge of the matter said.
Temasek is weighing the possibility of Keppel selling its 19.1 per cent stake in wireless operator M1 and paring its 44.6 per cent interest in office landlord Keppel Reit, the people said, asking not to be identified as the information is private. Keppel’s holdings in the two firms are worth a combined S$1.6 billion at current market prices, according to data compiled by Bloomberg……………………………………….Full Article: Source

Temasek increases stake in US-based pharma firm

Posted on 27 January 2016 by VRS  |  Email |Print

Temasek Holdings lifted its shareholding in Nasdaq-listed Portola Pharmaceuticals last year, according to a United States Securities and Exchange Commission filing. The sovereign wealth fund increased its holdings by 750,000 shares over the course of last year to 6.584 million, as at Dec 31.
However, Temasek’s percentage stake in the firm actually fell slightly, from 12 per cent to 11.8 per cent as the overall number of Portola shares increased last year. When contacted, Temasek confirmed the share purchase but declined to disclose when it purchased the shares and for how much………………………………………..Full Article: Source

Saudi royal family gave Najib $681M ‘personal donation’

Posted on 27 January 2016 by VRS  |  Email |Print

Saudi Arabia’s royal family gave Malaysian Prime Minister Najib Razak a $681 million gift, Malaysia’s attorney general has revealed, ending months of speculation about the source of the huge personal donation.
In addition, the attorney general reportedly said that he was satisfied that no offence had been committed in relation to SRC International, a former subsidiary of heavily indebted state fund 1Malaysia Development Berhad (1MDB). SRC had been probed over the alleged misappropriation of fund worth $932 million………………………………………..Full Article: Source

World’s Biggest Wealth Fund Speaks Out on Liquidity Banks Miss

Posted on 27 January 2016 by VRS  |  Email |Print

As some of the world’s best-known investment banks blame tougher capital rules for contributing to the lack of liquidity in financial markets, the world’s biggest sovereign wealth fund has a different take. The argument is “an excuse for something else,” Oeyvind Schanke, chief investment officer of asset strategies at Norway’s $790 billion fund, said in an interview in Oslo on Tuesday.
One week after bank executives met in Davos, Switzerland, where they spent some time discussing the fallout of stricter financial requirements, Norway’s wealth fund is questioning a tendency to blame regulators………………………………………..Full Article: Source

Kazakh sovereign fund prepares for weaker oil, tenge

Posted on 27 January 2016 by VRS  |  Email |Print

Kazakh Samruk-Kazyna sovereign wealth fund expects the country’s tenge currency to weaken further this year along with oil prices, its chief financial officer told Reuters on Tuesday.
“An optimistic scenario for our companies would be $35 per barrel and … an exchange rate of up to 380 tenge per dollar (on average in 2016),” Yelena Bakhmutova, managing director in charge of finance and operations, said in an interview. “The baseline scenario is $25 per barrel and 400 tenge per dollar, a stress one is $20 and 420 tenge per dollar.”……………………………………….Full Article: Source

Azerbaijan’s anti-crisis defences larger than dwindling reserves imply

Posted on 27 January 2016 by VRS  |  Email |Print

Azerbaijan’s $34 billion sovereign wealth fund means the energy-rich former Soviet republic has significantly stronger anti-crisis defences than its dwindling central bank reserves imply. But the impregnability of those defences could yet be tested as global oil prices show no sign of staging a lasting recovery from multi-year lows under $30 a barrel.
Azerbaijan let its manat currency float in late December, triggering losses of around a third against the dollar, after burning through $9 billion of its official reserves in 2015 to defend a currency peg. It also started dollar sales from its state oil fund, called SOFAZ, as an emergency measure………………………………………..Full Article: Source

Lendlease-ADIA to include 429 apartments in Paya Lebar project

Posted on 27 January 2016 by VRS  |  Email |Print

The consortium comprising Lendlease and Abu Dhabi Investment Authority (ADIA) that last year bagged a plum site in Paya Lebar Central, has obtained provisional permission from Singapore’s planning authority to build a project that will comprise offices, retail space as well as 429 apartments.
Going by market talk, the apartments are expected to be launched for sale probably next year. This will mark the first time the Australian group will be developing homes in Singapore. It has been operating here for more than four decades………………………………………..Full Article: Source

China Investment Corporation a new force in Asciano race

Posted on 26 January 2016 by VRS  |  Email |Print

A new name has surfaced in the $9 billion race for Asciano, potentially leading to a formal offer from ASX-listed Qube in coming weeks. State-owned China Investment Corporation (CIC) revealed to the market last night that it had joined the Asciano register, tagging onto the near 20 per cent stake owned by Global Investment Partners (GIP) and Qube.
The latter two groups have been working with Canada Pension Plan Investment Board on an acquisition of Asciano (AIO). The ASX release disclosed an agreement between CIC affiliate Shunrong and GIP in particular, which would see them bid together for the in-demand logistics giant………………………………………..Full Article: Source

Temasek increases stake in US-based pharma firm

Posted on 26 January 2016 by VRS  |  Email |Print

Temasek Holdings lifted its shareholding in Nasdaq-listed Portola Pharmaceuticals last year, according to a United States Securities and Exchange Commission filing. The sovereign wealth fund increased its holdings by 750,000 shares over the course of last year to 6.584 million, as at Dec 31.
However, Temasek’s percentage stake in the firm actually fell slightly, from 12 per cent to 11.8 per cent as the overall number of Portola shares increased last year………………………………………..Full Article: Source

Jaitley to launch India’s first sovereign wealth fund on Feb 4

Posted on 26 January 2016 by VRS  |  Email |Print

The ‘ 40,000-crore National Investment and Infrastructure Fund (NIIF), India’s own sovereign wealth fund, will be launched on February 4 by finance minister Arun Jaitley, sources said. The launch, expected to be a grand event spread over two days, will showcase the specific infrastructure needs of different states.
A few of these projects would be identified for investment. Several domestic, and international infrastructure companies, lenders and sovereign wealth funds, from countries such as Japan, UAE, China, and Australia etc are expected to be present at the launch. The sovereign wealth fund would invest in greenfield, brownfield and stalled projects, which are commercially viable………………………………………..Full Article: Source

South Korea’s new SWF chief sets sights on ‘top ten’

Posted on 26 January 2016 by VRS  |  Email |Print

Former World Bank executive director takes office as CEO of the Korea Investment Corporation; sets out desire to grow assets under management beyond $200 billion The new chief executive officer of the Korea Investment Corporation has set his sights on making the sovereign wealth fund (SWF) one of the “top 10″ in the world, since taking office last week.
Sung-Soo Eun, formerly an executive director at the World Bank, joined the fund, which oversees around $85 billion in assets………………………………………..Full Article: Source

Energy-rich sovereign wealth funds pull money from firms

Posted on 26 January 2016 by VRS  |  Email |Print

Global money managers are losing some of their most reliable client assets as the stubbornly low oil price continues to take a toll on the world’s largest sovereign wealth funds. Sources with knowledge of sovereign wealth funds and their assets said the price of oil — which hovered around $30 a barrel as Pensions & Investments went to press — will affect funds in different ways because of their varied objectives.
Development funds, for example, are unlikely to redeem assets, sources said, while stabilization funds that are designed to cover fiscal deficits may be tapped by governments to plug the gap………………………………………..Full Article: Source

Europe well placed to weather the turmoil

Posted on 26 January 2016 by VRS  |  Email |Print

There are many reasons to be concerned about the economic outlook for Europe. Risks are arising from political instability in Spain and Portugal, a looming standoff between Greece and its creditors, a possible British decision to quit the EU and fallout from the potential unravelling of Europe’s Schengen passport-free travel zone.
But all signs point to this market slide — which began mysteriously on the last trading day of 2015 without any obvious news to trigger the rout — as having been a liquidity-driven event most likely sparked by a New Year change in investment strategy by a major, or several major, investors, perhaps a sovereign-wealth fund looking to liquidate assets to make up for budgetary shortfalls arising from low oil prices………………………………………..Full Article: Source

Azerbaijan’s Reserves Rapidly Evaporating Amid Fiscal Storm

Posted on 26 January 2016 by VRS  |  Email |Print

With oil prices now barely above $31 per barrel, Azerbaijan’s energy-export economy is taking on lots of water. And what is worse, Baku’s lifeboat, the State Oil Fund of Azerbaijan, appears to be in danger of foundering. The State Oil Fund of Azerbaijan (SOFAZ), a critical source of funding for Azerbaijan’s state budget, needs help, too, some observers say. The question is what, or who can supply it.
Established in 1999, at the dawn of Azerbaijan’s oil boom, the extra-budgetary fund was designed to safeguard and invest for the public good the windfall profits earned from Azerbaijan’s oil and gas exports………………………………………..Full Article: Source

Kuwait Plans $100 Billion Sovereign Fund

Posted on 25 January 2016 by VRS  |  Email |Print

Kuwait plans a new state-owned fund to manage as much as $100 billion in local assets with the goal of selling them to private investors in five to seven years, Al-Anba newspaper reported.
The new sovereign wealth fund will include local assets managed by Kuwait Investment Authority, which has been burdened by its domestic mandate and will focus more on its international portfolio, Al-Anba reported, citing unidentified officials. Stakes in local companies, as well as power and water projects, will be included in the new fund, it said………………………………………..Full Article: Source

Sovereign wealth funds rise in private equity ranks

Posted on 25 January 2016 by VRS  |  Email |Print

Sovereign wealth funds have overtaken private pension funds to become the second-largest group of investors in private equity after a sustained increase in allocation to the asset class in the past two years.
Despite being few in number – Preqin tracks 76 globally – the government funds as a whole have $83.1 billion committed to the asset class as of January 2016, up from $79.8 billion in January 2014, according to the data provider. This comprises 17% of all capital committed to private equity, for the first time putting sovereign wealth funds ahead of private sector pension funds, which made up 15%………………………………………..Full Article: Source

CIC joins Gooman in $500m UK deal

Posted on 25 January 2016 by VRS  |  Email |Print

Australian industrial property powerhouse Goodman Group has struck a fresh tie-up with one its major shareholders, sovereign wealth fund China Investment Corporation, agreeing a £250 million ($509.32m) deal in Britain.
The pair are poised to acquire three business parks in Britain’s southeast from the unlisted Arlington Business Parks Partnership, which Goodman already operates and owns with local group Legal & General Property. The deep-pocketed CIC was identified as the likely capital partner to buy the properties — Hammersmith Embankment, Oxford Business Park and Uxbridge Business Park — by British journal Property Week………………………………………..Full Article: Source

Temasek increases stake in Portola Pharmaceuticals

Posted on 25 January 2016 by VRS  |  Email |Print

Temasek Holdings Ltd filed increased its stake in Portola Pharmaceuticals, with an SEC filing indicated that they now own 11.8 per cent (96,583,568 shares) of Portola Pharmaceuticals Inc, which is listed on the NASDAQ. Prior to this transaction, Temasek Holdingshel held 5833568 shares as of Q3 2015, for 2.36 per cent of its US stock portfolio.
According to the latest SEC filings, 162 investors own Portola Pharmaceuticals Inc stock, with institutional ownership in Q3 2015 high at 81.73 per cent of outstanding shares………………………………………..Full Article: Source

The sovereign wealth ruling class

Posted on 25 January 2016 by VRS  |  Email |Print

It’s always good to have deep pockets, but few institutional investors carry checkbooks backed by entire nations. Yet point to one of New York City’s recent big-ticket real estate deals and there’s a good chance a sovereign wealth fund was one of the buyers.
Through the first 11 months of 2015, sovereign wealth funds spent more than $22.6 billion on real estate in the United States, up from about $9.8 billion in 2014, according to research firm Real Capital Analytics. “If you need billions of dollars for a project, where are you going to go?” said Savills Studley executive managing director Woody Heller, who heads the brokerage’s capital markets group………………………………………..Full Article: Source

How Nigeria can survive economic downturn, by NLC, NES, others

Posted on 25 January 2016 by VRS  |  Email |Print

The establishment of a Stabilisation Fund can help the country get out of its economic downturn, a report has said. The report, which was put together by a group, which includes the Nigeria Labour Congress (NLC) and the Nigeria Economic Society (NES), added that Nigeria is occupying the 55th position of 69 nations rated for savings and investment.
The depletion of the Excess Crude Account (ECA) when oil prices were high was also said to have contributed to the financial meltdown which the nation is facing. These facts are contained in a report by 43 groups under the auspices of the Citizens Wealth Platform(CWP)………………………………………..Full Article: Source

FSI Investmenti at cutting edge of Arab-Italian ventures

Posted on 25 January 2016 by VRS  |  Email |Print

The Fondo Strategico Italiano (FSI) achieves its aims via direct investments and systemic joint ventures that together forge the fundamental strategy of the semi-official sovereign wealth fund. The FSI is creating close relationships with the Arab world, in particular with Kuwait and other emirates in the Gulf Cooperation Council.
The most important operation FSI brokered recently is with the Kuwait Investment Authority (KIA). The two companies announced, at the beginning of 2014, an agreement negotiated under the government of former Italian Prime Minister Enrico Letta and then officially approved in July 2014………………………………………..Full Article: Source

Russian Fund Under Scrutiny for Loan to Company Linked to Kremlin

Posted on 25 January 2016 by VRS  |  Email |Print

The Russian Direct Investment Fund defends the Sibur deal, saying it follows the fund’s investment guidelines. The chief executive, Kirill Dmitriev, in a written statement, characterized the loan as commercially motivated and issued “in line with our established practices.”
Mr. Putin, like many Russian officials, refuses to discuss his family or reveal family business activities. Mr. Shamalov has declined to confirm or deny whether he is married to the younger of Mr. Putin’s two daughters; a representative for Mr. Shamalov did not respond to written questions………………………………………..Full Article: Source

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