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Sovereign Wealth Funds Briefing 26.Nov 2015

Posted on 26 November 2015 by VRS |  Email |Print

Guyana will next year table legislation in the National Assembly to create a Sovereign Wealth Fund (SWF), ahead of commercial drilling for oil by American oil giant, Exxon Mobil, Minister of Governance Raphael Trotman announced Wednesday.
Addressing the opening of a workshop on the SWF’s creation at the Arthur Chung Conference Centre (ACCC), he said the Bill would be laid in the House before the end of 2016 for scrutiny and debate as well as inputs from the wider Guyanese public. “Nationwide consultations will be held both before and during the process of finalizing this policy through necessary legislation,” he said………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

The Government of Guyana, in collaboration with the Canadian High Commission and the University of Calgary’s School of Public Policy, today began a two-day workshop on the establishment of a Sovereign Wealth Fund (SWF) for the country. The event is being held at the Arthur Chung Convention Centre (ACCC).
During the course of the next two days, the facilitating team will undertake a study of current legislative policies to see how best they can be improved to suit the Oil and Natural resources sectors………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

Singapore sovereign wealth fund GIC on Wednesday said that it is “underinvested” in property. Real estate currently makes up 7 per cent of its asset mix. It plans to raise this proportion to 9-13 per cent. It will do so by looking at big transactions in deep and liquid markets in key gateway cities. Emerging markets will also be important for its long-term strategy, notwithstanding short-term geopolitical risks.
GIC will also continue to partner global players, including private equity firms and other sovereign wealth funds, on bigger deals as competition heats up for global assets………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

GIC, which manages more than US$100 billion (S$141 billion) of Singapore’s reserves, is “underinvested” in property and interested in transactions of scale even as it faces an increasingly difficult investment environment.
GIC has about 7 per cent of assets in real estate, while it can invest 9 per cent to 13 per cent, GIC Real Estate president Goh Kok Huat said in his keynote speech at a conference organised by the Asia Pacific Real Estate Association……………………………………….Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

Home prices in Beijing and Shanghai, which have surged this year, have room to rise further as the inflow of residents bolsters demand in China’s biggest cities, said the head of real estate investments at Singapore’s sovereign wealth fund.
Despite some short-term volatility, the long-term outlook for the China’s real estate market is solid given its growth prospects, Goh Kok Huat, president of GIC Pte’s real estate unit, said in an interview on Wednesday with Bloomberg Television’s Haslinda Amin in Singapore. Retail properties face consolidation in China’s cities as more consumers turn to online shopping, he said………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

GIC, Singapore’s sovereign wealth fund, is taking a long view on its real-estate investments, particularly eyeing emerging markets despite recent turmoil, the president of the fund’s property division said. The usually tight-lipped fund has plenty of dry powder to pursue property deals.
he fund, which manages upwards of $100 billion, has an allocation of 9-13 percent of its portfolio toward property, but at the moment only around 7 percent has been invested in the segment. GIC’s property portfolio has more than 350 investments in over 40 countries. GIC’s mandate bars it from investing in Singapore’s property market………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

The Abu Dhabi Investment Authority, the nation’s sovereign wealth fund, has added to its portfolio of Manhattan hotels. The fund paid $382 million, or $678,000 per room, to the Blackstone Group for the leasehold for the 563-key London NYC Hotel at 151 West 54th Street, between Sixth and Seventh avenues in Midtown.
Of that total, $194 million paid for the property itself, with the remaining $154 million made on the building’s debt. As per the lease agreement, the ADIA will pay $157 million to the Sol Goldman estate through 2136. Roy March, Larry Wolfe and Mark Schoenholtz of Eastdil Secured represented Blackstone in the deal………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

It’s rare to see the Malaysian ringgit rise against the US dollar - especially given its performance this year - down some 18%. Even more curious that it happened while regional currencies like the Indonesian rupiah and Thai baht continued to fall. Research houses are also upgrading their forecasts for Malaysia’s stock markets and the economy.
So what’s driving all this positivity? Well, in part it is thanks to the sale of the energy assets at one of Malaysia’s most notorious institutions: IMDB. 1Malaysia Development Bhd (1MDB) is a state investment fund set up in 2009 and was supposed to turn Kuala Lumpur into a financial hub. But it is currently on a fragile financial footing………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

Malaysia’s beleaguered sovereign wealth fund 1Malaysia Development Berhad (1MDB) has sold its energy assets for 9.83 billion ringgit ($2.3 billion) to a Chinese nuclear power supplier, in a move that should help it cut its debt burden.
As part of the deal, which is expected to be completed in February 2016, China General Nuclear Power and its subsidiaries will acquire the Edra group of companies and assume all the relevant gross debt and cash. This transaction was a major milestone in the 1MDB rationalization plan that was presented to Malaysia’s cabinet on May 29, 1MDB said in a statement………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

Kazakhstani national companies will soon be facing a major restructuring. Samruk Kazyna National Wealth Fund plans to cut expenditures by 519 billion tenge ($16.9 billion) by selling non-core assets to increase the company’s value after major changes. As the national wealth fund, Samruk Kazyna is bound to conduct various social projects. Yet, to increase the return, the fund plans to get rid of a number of companies that are currently part of the fund.
Samruk-Kazyna is a sovereign wealth fund and joint stock company in Kazakhstan which owns, either in whole or in part, many important companies in the country, including the national rail (Kazakhstan Temir Zholy) and postal service (KazPost), state oil and gas company KazMunayGas, state uranium company Kazatomprom, Air Astana, and numerous financial groups………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

The UK is to launch a sovereign wealth fund with the receipts of shale gas revenue, the government has confirmed. First mentioned in July’s Budget, chancellor of the Exchequer George Osborne confirmed its creation during the Autumn Statement, when he pledged to support the shale gas industry “by ensuring communities benefit from a shale wealth fund”.
The UK Treasury also revealed that up to 10% of shale gas tax revenue would be diverted to the new sovereign wealth fund, which it said would invest in local communities “hosting shale gas developments”………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

The Norwegian Pension Fund, the world’s top sovereign wealth fund, is rotating a chunk of its $860bn of assets into property in London, Paris, Berlin, Milan, New York, San Francisco and now Tokyo and East Asia. “Every real estate investment deal we do is funded by sales of government bonds,” says Yngve Slyngstad, the chief executive.
It already owns part of the Quadrant 3 building on Regent Street, and bought the Pollen Estate - along with Saville Row - from the Church Commissioners last year. But this is just a nibble. The fund is eyeing a 15pc weighting in property, an inflation-hedge if ever there was one………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

The sovereign investment fund of Kuwait, Kuwait Investment Authority, will invest an additional $500 million in the Russian economy. On Nov. 10, it signed an agreement to that effect with the Russian Direct Investment Fund (RDIF), a special investment fund set up by the Russian government in 2011 to attract foreign investment into the fast-growing sectors of the Russian economy.
Thus, the amount of Kuwaiti investment into Russian projects will double. The Kuwaiti fund had already invested $500 million in Russia in 2012. “The RDIF is the first and only fund to have raised over $20 billion worth of long-term investment into Russia from major Middle East sovereign funds,” a RDIF spokesman told RBTH………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

A consortium including Abu Dhabi Investment Authority will invest A$10.3 billion (Dh27.42bn) in one of Australia’s biggest utilities. The deal involves a 99-year lease on the TransGrid electricity network in New South Wales. The winning group that took control of TransGrid was led by the Canadian pension fund Caisse de depot et placement du Quebec, which has a 25 per cent stake.
Adia, through its Tawreed Investments unit, has a 20 per cent stake. Meanwhile, Hastings Fund Management has 20 per cent, while Kuwaiti investors have 20 per cent and Spark Infrastructure has 15 per cent, according to the Australian government………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

Remember the days when SWFs were considered the saviours of the universe? The white knights of the banking crisis? The clients every asset manager wanted to have. Well, fast-forward seven years or so and they’re bullet point number seven in Morgan Stanley’s “10 Surprises for 2016″ outlook piece. A bigger risk, they add, than retail mutual fund redemptions. Who’d have thought, eh?
From banking research team (our emphasis): SWF redemptions may prove more material than retail mutual fund withdrawals – but mutual fund stress tests will be introduced due to concerns on corporate bond market liquidity driving cost creep, whilst FCA competition review will add to regulatory uncertainties for UK based asset managers………………………………………..Full Article: Source

Posted on 26 November 2015 by VRS |  Email |Print

By some measures, SWFs have already been extensively researched. Yet extant empirical research offers incomplete evidence about the impact of Sovereign Wealth Fund investments on the value of publicly traded companies.
Studies that examine SWF investments using event-study techniques (Dewenter, Han, and Malatesta 2010; Kotter and Lel 2011) find positive announcement-period returns. Unfortunately, these results offer little insight into the role of SWFs as investors, as corporate finance research consistently documents positive announcement-period abnormal returns for all types of direct stock purchases by institutional investors………………………………………..Full Article: Source

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