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Sovereign Wealth Funds Briefing 22.May 2015

Posted on 22 May 2015 by VRS |  Email |Print

China’s sovereign wealth fund, China Investment Corporation (CIC), has created a new direct investment arm with US$5 billion in seed capital to help Chinese companies invest overseas, according to statements made by a senior government official quoted by Chinese media.
Gu Dawei, a director in charge of overseas investment at China’s National Development and Reform Commission, implied during a press conference yesterday in Beijing that the new investment entity could eventually be as large as over US$40 billion. “(The fund) will be large, potentially larger than the Silk Road Fund,” says Gu, referring to an investment fund established in November 2014 to invest in infrastructure projects in Asia to upgrade trade and transportation networks between China, Central Asia and Europe………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

1Malaysia Development Berhad’s (1MDB) restructuring report is expected to be tabled to the Cabinet next week, Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah said. He said the restructuring of the alleged debt-ridden government investment arm was possible and he had concrete plans on how to do so.
“Whenever you want to do a restructuring, firstly you have to know what their position is, which is very clear.Then you have to look at how to go from there and for that we have concrete plans. I’m completing the report and next week I will table it to the Cabinet. After that maybe we can announce the next part of 1MDB’s restructuring,” Ahmad Husni said………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

Second Finance Minister Datuk Seri Ahmad Husni Mohamad says 1Malaysia Development Bhd (1MDB) has made a mistake and misinterpreted the nature of its assets kept in BSI Bank in Singapore. “I feel it was a mistake, a mistake in the nature that it was interpreted when 1MDB said that it had redeemed (US$1.1 billion from Cayman Islands) and kept it in a bank in Singapore,” he told reporters at Parliament lobby.
Ahmad Husni explained that it was “assets” and not cash that was redeemed from Cayman Islands as reported before. “It is actually savings (in the form of unit)… that is unit, that it is, unit that is being backed by the sovereign wealth fund,” he said………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

1Malaysia Development Berhad (1MDB) is experiencing “short term” cashflow problem with the ability to pay its debts, said Finance Minister II Datuk Seri Husni Hanadzlah. He assured that the Government would find a solution for the debt-laden government investment arm.
“The problem is a short term cashflow problem, that is all. We will settle it. In terms of asset quality, they have the assets to pay all. It is only a short term cashflow problem,” he told reporters at Parliament lobby, Thursday. Husni said 1MDB might have misinterpreted the investment of US$1.103bil (RM4bil) in BSI Bank (Singapore) Ltd………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

Qatar-owned Paris Saint-Germain are the best paid team in world sport according to Sportingintelligence’s new Global Sports Salaries Survey (GSSS) for 2015. The average first-team pay at the French football club has been calculated at £5.3 million ($8.3 million) per year, or £101,898 ($159,797) per week in the period under review.
PSG have just completed a hat-trick of league titles in France’s top division, adding the 2014-15 crown to those won in 2013-14 and 2012-13 on the back of a takeover by the oil-funded Qatar Sports Investments (QSI) in 2011. Qatar’s sovereign wealth fund, which draws from the same resources that fund PSG’s owners QSI, has an estimated $304 billion under investment. The sovereign wealth fund of Abu Dhabi, which includes City’s owner Sheikh Mansour on its board of directors, has assets estimated at $773 billion………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

“Sovereign wealth funds (are) where money is set aside for investment to benefit a country and its people,” Kenred Dorsett, Minister of the Environment and Housing, Bahamas said, adding that its purpose will be to “save and invest surplus funds derived from oil, gas minerals and other natural resources to provide a heritage for future generations of the citizens of the Bahamas, to support and increase savings for future generations, to enhance sustainable long term capital growth for The Bahamas and to support and promote any other strategic development objectives of The Bahamas.”
“This fund,” he said, “is for the holding of money derived not only from petroleum but from the development of the natural resources of the country. We are creating a mechanism to ensure that any excess profits gained from such ventures will benefit future generations of The Bahamas.” The House of Assembly morning session was cut short because opposition members did not have an opportunity to see the amendments to the bills. The House of Assembly will meet again on May 26………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

Sovereign wealth funds and public pension funds have been moving aggressively into real estate and infrastructure to offset low returns in traditional markets, raising the risk of asset bubbles, said the Global Public Investor 2015 (GPI 2015) report. The survey of 500 global public-sector institutions across 180 countries found that central banks, on the other hand, continue their purchases of equities.
Total assets under management, including gold, of these 500 public sector asset managers rose 1.8 per cent or US$520 billion in 2014 to US$29.7 trillion. Growth was primarily driven by public pension and sovereign funds. The Official Monetary and Financial Institutions Forum (OMFIF), the global research and advisory group behind the report, estimates that 9.1 per cent or US$2.7 trillion of the total assets held by the 163 central banks, 89 sovereign funds and 248 public pension funds surveyed lie in real estate and infrastructure………………………………………..Full Article: Source

Posted on 22 May 2015 by VRS |  Email |Print

Personally, I agree that, in general, large sovereign funds and pensions should invest for the long-term. There are scores of reasons why and thousands of papers produced by asset managers, think tanks and professors who believe so. Nearly every institutional investor with over US$ 100 billion in assets subscribes to the “long-term investor” philosophy.
Will the Canary Wharf deal be a positive in the long-run for the Qatar Investment Authority (QIA) given the price paid and resources allocated? Incorrect expectations based on a shaky premise can lead to money being stuck in an underperforming asset (this is especially the case with sizable illiquid investments)………………………………………..Full Article: Source

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