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Sovereign Wealth Funds Briefing 23.Mar 2015

Posted on 23 March 2015 by VRS |  Email |Print

Norway’s $850bn oil fund has performed a remarkable impression of the proverbial 800-pound gorilla in the past decade. It snapped up 1.3 per cent of the world’s equity market capitalisation and 0.9 per cent of the fixed income market, as well as dabbling in property, as its assets surged sevenfold.
So any substantial change to the fund, or to the wider $7.1tn sovereign wealth fund sector, matters to markets. With $4.3tn of that $7.1tn dependent on revenue streams from oil and gas, according to the Sovereign Wealth Fund Institute, a slump in the oil price from $115 a barrel in June 2014 to $57 now, might be regarded as constituting a material change………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

Norway’s sovereign wealth fund is looking at Tokyo or Singapore for its first real estate investment in Asia as the investor expands globally. “That’s where we think we’ll start,” Karsten Kallevig, the chief investment officer of real estate at the Oslo-based fund, said in an interview after a speech in the Norwegian capital. “If we’re really successful there, then maybe we can add a third and a fourth and a fifth city at some point.”
After in 2010 being allowed to expand into the property market, Norway’s $870 billion wealth fund has amassed about $18 billion in real estate holdings. It has snapped up properties in major cities such as New York, London and Paris, with a main focus on office properties………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

In the negative-yield vortex that is the European bond market, investors are discovering just what lengths they’re willing to go to generate returns. Norway’s $870 billion sovereign wealth fund said this month that it added Nigeria and lifted its share of lower-rated company debt to the highest since at least 2006. Allianz SE, Europe’s biggest insurer, is shifting from German bunds to bulk up on mortgages. JPMorgan Asset Management is buying speculative-grade corporate debt to boost returns.
With the European Central Bank’s fight against deflation pushing yields on almost a third of the euro area’s $6.26 trillion of government bonds below zero, even the most risk-averse investors are taking chances on assets and regions that few would have considered just months ago. That’s exposing more clients to the inevitable trade-off that comes with the lure of higher returns: the likelihood of deeper losses………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

Asset owners could work together to forge a greater focus on long-term investments, according to the CIO for the Government of Singapore Investment Corporation (GIC). In a new research paper, the sovereign wealth fund’s chief investment officer said he was keen for long-term partnerships with external managers.
However, he expressed concern that other investors’ time horizon did not match GIC’s. Lim Chow Kiat, group CIO for GIC, said that the sovereign investor was limited in the number of truly long-term investments it can make by other investors’ and external managers short-term horizons………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

At its annual report launch last week, Bank Negara deputy governor gave a relatively healthy assessment of the country’s economy. So glowing was the report, however, that several members of the audience felt compelled to ask his opinion of 1MDB, the proverbial elephant in the room.
He essentially responded by saying that “sovereigns” (meaning government-backed entities) are not monitored as closely as are “corporates” (meaning the private sector) in their respective issuance of bonds and similar financial instruments. This is presumably because a bond or debt obligation issued by a government authority is usually assumed as low-risk, given that they are backed by the taxing power of the said government………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

Australia’s sovereign wealth fund has promoted an internal candidate to lead its growing infrastructure and timberland portfolio. Wendy Norris, who joined the Future Fund in 2010, has replaced Raphael Arndt at the helm of the $8 billion portfolio, the institution has announced. Arndt was promoted to CIO in September last year.
“[Wendy] combines infrastructure portfolio management, asset management and transaction expertise with the ability to contribute to investment thinking across all asset classes,” said Arndt, who was tasked with creating an infrastructure portfolio when the fund was launched in 2008. He also thanked Barry Brakey, the fund’s head of property, who had been looking after that section of the portfolio while a replacement was found………………………………………..Full Article: Source

Posted on 23 March 2015 by VRS |  Email |Print

Abu Dhabi asset manager Invest AD, part of Abu Dhabi Investment Council, said it’s boosting investments in Egypt on expectation that the country’s renewed political stability and economic reform will help drive growth. The North African country now accounts for 35 percent of Invest AD’s $50 million Africa equity fund, up from 10 to 15 percent last year, portfolio manager Sherif Salem said in an interview. Nigeria is 5 percent, down from 30 to 35 percent.
“The market is already factoring in quite a positive outcome,” Salem said Sunday in Abu Dhabi. “The trigger was political stability. From an economic standpoint, it’s been reassuring in the past six to eight months, the implementation of economic policies and investments that have been promised.”……………………………………….Full Article: Source

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