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Sovereign Wealth Funds Briefing 15.Oct 2015

Posted on 15 October 2015 by VRS |  Email |Print

Central bank and sovereign wealth fund assets will shrink by $1.2 trillion, or almost 7 percent, by the end of the year as China and petrostates including Russia and Saudi Arabia dip into their savings amid slower growth and lower crude revenues, according to UBS Group AG.
The decline will be driven by China withdrawing its foreign exchange reserves, while oil-producing countries tap foreign assets to support government spending, Massimiliano Castelli, head of global strategy at UBS Asset Management, said in a phone interview from Zurich Tuesday………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

The first major test of whether a Malaysian state investment fund can pay off its heavy debt load will come Friday when bids are due for a group of power plants the fund is trying to sell. But few potential buyers remain for the plants, including government-owned power producers in Malaysia and Qatar, as other possible buyers stepped back from the deal or weren’t invited to bid in the final round, people familiar with the matter said.
A smaller number of bidders could mean a lower price for the power plants. The sale is crucial for 1Malaysia Development Bhd., as it tries to dig out of its $11 billion debt hole. The fund paid roughly 12 billion ringgit ($2.85 billion) for the plants in 2012, and had valued them around $4 billion in a planned initial public offering earlier this year………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

Utility heavyweight Tenaga Nasional Bhd (TNB) is inching towards a multi-billion dollar purchase of energy assets from 1Malaysia Development Bhd (1MDB) after a rival bidder dropped out, a deal that would bring welcome financial relief to the state fund. Hong Kong-listed CGN Meiya Power Holidings Co, the only firm beyond TNB to have openly expressed an interest for some 1MDB assets, said in regulatory filings on Friday it was no longer considering the transaction.
Other companies that had been initially shortlisted for the asset sale were not expected to bid before an end of week deadline, leaving the field open for the Malaysian suitor, bankers and sources close to the situation told Reuters………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

Goldman Sachs’ actions as an adviser to Malaysia’s troubled sovereign wealth fund are being examined by U.S. authorities, The Wall Street Journal has reported. Citing unnamed sources, the WSJ wrote that Goldman was consulted on the creation of 1Malaysia Developmment Berhad (1MDB), and advised on three acquisitions and $6.5 billion bond sale by the fund. The bank’s fees for its work were far more than $350 million, according to the report.
The inquiries by the Federal Bureau of Investigation and the Department of Justice were at an early stage, sources told the WSJ, and there was no suggestion of wrongdoing by Goldman………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

Goldman Sachs Group shares are declining 0.71% to $179.67 on reports that as the FBI and the U.S. Department of Justice are investigating the investment banking company’s actions in a series of transactions at 1 Malaysia Development Bhd. (1MDB), an economic development fund in Malaysia, the Wall Street Journal reports.
However, the inquiries are still at an early stage and there is no suggestion of wrongdoing by the company. The investigators “have yet to determine if the matter will become a focus of any investigations into the 1MDB scandal,” the Journal noted. Goldman Sachs is an adviser to Malaysia’s wealth fund, advising on three acquisitions and $6.5 billion bond sale, CNBC.com added………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

Former Treasurer Peter Costello has previously said it would be “a very strange thing” for the nation’s sovereign wealth fund to divest from fossil fuels. Dr John Hewson’s not so sure. Former Liberal leader Dr John Hewson has launched a scathing attack on Peter Costello for being “wilfully blind to the risks of climate change” in his management of Australia’s massive sovereign wealth fund, even accusing the Howard-era Treasurer of “a clear breach of fiduciary duty”.
Dr Hewson is the Chair of the Asset Owners Disclosure Project (AODP), a non-profit which ranks the top 1,000 asset owners for their exposure to investments that risk the climate and, increasingly, their returns………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

The Qatari fund has stepped up disposals in recent months amid a slump in oil prices. The sale by Qatar Investment Authority of its 10 per cent stake in Hochtief for 540 million euros ($615 million) marks the third publicly announced disposal in as many months by the sovereign wealth fund of the world’s largest exporter of liquefied natural gas.
The QIA, as the fund is known, disposed of 7 million shares in the Essen, Germany-based construction company at a price equal to 77 euros apiece, it said in a statement Monday. A “significant portion” of the shares went to a single strategic holder that wasn’t identified. The sale is part of routine portfolio management, said the QIA, which invested in Hochtief in 2011………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

France has signed military, trade and economic co-operation deals worth €10bn (£7.5bn; $11.4bn) with Saudi Arabia. The agreements cover a range of sectors including aerospace, construction and naval research.
Saudi Arabia’s sovereign wealth fund is also to invest $2bn in French private funds with a focus on renewable energy. The deals were signed by French Prime Minister Manuel Valls in Riyadh on 13 October and signal a deepening of relations between the two countries………………………………………..Full Article: Source

Posted on 15 October 2015 by VRS |  Email |Print

Some big REIT deals have included well-heeled financial partners like pensions and sovereign wealth funds. That sounds like a good thing. But maybe it’s just allowing more deals to get done at higher cap rates.
The real estate investment trust, or REIT, sector has had a rough year so far share price wise. That said, operationally things appear to be going well for most REITs. One issue that’s popped up more than once, however, is the high price of acquisitions. And the trend toward partnering up with sovereign wealth funds and pensions could be a part of the problem……………………………………….Full Article: Source

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