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Sovereign Wealth Funds Briefing 19.Oct 2015

Posted on 19 October 2015 by VRS |  Email |Print

Australia’s $118 billion sovereign wealth fund managed to keep its head above water over the volatile September quarter, growing the fund by $600 million during a period when global sharemarkets saw their worst performance in four years.
However, Future Fund chairman Peter Costello has warned again of lower expected returns in the long term, after the fund managed to eke out a gain of 0.5 per cent over the three months to September 30, taking the total value of the fund to $117.8bn. The 0.5 per cent rate of return over the period was below the Future Fund’s target of 1.6 per cent for the quarter, but came at a time when global sharemarkets, including the Australian bourse, posted their worst performance since 2011………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

Australia’s sovereign wealth manager, the Future Fund, said on Monday it returned 0.5 percent in the September quarter, marking slower growth for the fund which has returned an average 11.1 percent annually over five years. The fund, which has consistently outperformed its target return since it was set up in 2006, also fell short of its July-September target of 1.6 percent.
Future Fund Chairman Peter Costello reiterated that returns were likely to decline amid a large correction in Australian equities and increased volatility generally. Australian shares fell about 8 percent in the three months to September, the worst quarterly performance since 2011, largely due by fears about slowing growing in China and uncertainty about the timing of U.S. interest rate hike………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

The Future Fund has issued a warning to investors that the high returns of the past few years are unlikely to continue in the medium term. The latest update shows the Future Fund’s investment strategy has almost doubled the value of original government contributions since its inception.
Since its launch in May 2006, the sovereign wealth fund has added $57.3 billion in investment returns to the government’s original contributions, which were valued at $60.5 billion at the time of transfer. The performance translates to annualised return of 7.8%, comfortably ahead of the long-term target return of CPI +4.5%, which equates to 7.1%. Performance is also well ahead over one, three, five and seven years………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

The Singapore government’s investment arm has announced plans to fund projects in the UK property market, writes Chris Smith. The sovereign wealth fund GIC announced it is investing £90m in the private equity firm Maya Capital to fund acquisitions outside the M25. Maya has investment from GWM Capital Advisors and has started projects in Newcastle and Wales.
David Pralong, managing partner of Maya Capital, said: “The fact that we have received financing from such a high profile and internationally respected financial institution such as GIC will allow us to continue to pursue our strategy.”……………………………………….Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

A consortium led by Korean sovereign wealth fund (SWF), the Korea Investment Corporation (KIC), has sealed a deal to acquire five-star hotel InterContinental Hong Kong for US$940 million. According to a report from MK Business News, the KIC hooked up with Hong Kong-based real estate private equity firm Gaw Capital Partners (Gaw Capital) to forge a sales agreement with the InterContinental Hotels Group in July.
The consortium injected US$470 million into the acquisition and borrowed the other half from local lenders to finance the deal. Gaw Capital previously announced it would retain InterContinental Hotels Group to continue managing the property, whilst using its existing hospitality platform, GCP Hospitality, to enhance the asset management side of things if the transaction went through………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

Russian sovereign wealth fund Rusnano Management Company will create a $2-billion (Rs 13,000 crore) fund with equal contribution from Indian financial institutions to invest in joint venture companies formed between the two countries which will develop defence and aerospace equipment with high-end technology , two persons with direct knowledge of the development said.
“We will invest up to 49% in the joint venture company and the rest will be owned by the Indian partner,” said one of the persons.”We will also transfer critical technology to the joint venture in both defence and aerospace. The entire plan is part of the Make In India initiative.” The fund will be a subset fund of the National Infrastructure Investment Fund (NIIF) launched to invest in new infrastructure companies and stressed ones which are starved of capital………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

Norway’s Government Pension Fund Global will soon start investing in Japanese office buildings, possibly spending $5 billion to $8 billion over the long term, according to the chief real estate investment officer at Norges Bank Investment Management. Among Asian cities, the world’s largest sovereign wealth fund has set its sights on Tokyo and Singapore, said Karsten Kallevig. Norges Bank Investment Management, which manages the fund, opened an office here in early October for this purpose.
Growth is expected over the long term thanks to the concentration of global businesses, Kallevig said of the Tokyo market. Investment will be limited to the capital, with no plans to expand to Osaka or Nagoya. With the weakening of the yen, some view Japanese real estate as a bargain for overseas investors. But Kallevig said the soft price trend did not factor into the fund’s decision………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

Volkswagen is set to be pushed deeper into crisis after it emerged that the carmaker is facing a record-breaking €40bn (£30bn) legal attack spearheaded by one of the world’s top law firms.Now Quinn Emanuel and Bentham are contacting VW’s biggest investors – which include sovereign wealth funds of Qatar and Norway – to ask them to join the claim.
VW has admitted that it fitted “defeat devices” to 11m cars that allowed them to fraudulently pass pollution controls, though the company’s senior management has insisted it was unaware of the practices………………………………………..Full Article: Source

Posted on 19 October 2015 by VRS |  Email |Print

Sovereign wealth funds (SWFs) across the Arabian Gulf are selling financial assets as the low oil price hits the region’s economies. The Saudi Arabian Monetary Authority (Sama) and the Qatar Investment Authority (QIA) are selling stakes in European companies, as the oil price slump forces Gulf states to run major fiscal deficits for the first time since 2009, and encourages SWFs to plug the gap.
Sama has withdrawn US$1.3 billion from European equities this year, according to Nasdaq estimates. The QIA said last week that it was selling its 10 per cent stake, valued at $615 million, in the German construction company Hochtief, the QIA’s third divestment in three months. Sama and QIA did not respond to requests for comment………………………………………..Full Article: Source

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