Insto roundup: Calstrs ramps up China investment; GIC targets UK logistics assets
AUSTRALIA
AustralianSuper, Canada Pension Plan Investment Board (CPPIB) and UniSuper have acquired a combined 50% stake in Chesapeake toll roads in the US worth $2.1 billion.
AustralianSuper acquired 25%, CPPIB 15% and UniSuper 10%. Toll road operator and developer Transurban will retain the remaining 50%.
The transaction is expected to be completed by the end of 2021, Transurban said in a statement.
Source: AustralianSuper, Transurban
Superannuation funds Cbus and Media Super will proceed to the next stage of their merger in 2021, putting them on track for completion by the end of 2021.
The two funds signed a memorandum of understanding for the merger in July, conditional on a detailed due diligence process, which is now complete.
Media Super is an A$5.9 billion ($4.49 billion) industry super fund for the printing, entertainment, arts and media industries. The merger with Cbus, the industry super for the building, construction and allied sectors, would result in an A$60 billion fund with 840,000 members.
Source: Financial Standard, Cbus
The Australian Prudential Regulation Authority (Apra) is reviewing eight trustees in relation to 10 MySuper products for failing to meet their obligations to members.
In its second MySuper product heatmap released on December 18, Apra compiled data highlighting the fees, costs and investment performance of 86 funds. Products with high fees and poor returns were highlighted in varying shades of orange and red.
The authority said eight trustees would be issued notices to provide information about the underperformance of their MySuper products and actions taken to address the issue. Apra declined to name these trustees.
Source: Apra, Australian Financial Review
CHINA
Dai Xianglong, a former governor of the People's Bank of China and former head of the National Social Security Fund, is calling for allocating a proportion of assets confiscated from corrupt officials and a proportion of land transfer fees to replenish pension reserves.
At a pension reserves forum hosted by the Chinese Academy of Social Sciences on December 19, Dai said the amount of assets confiscated from corrupt officials could total billions of yuan.
In recent years, with the increasing number of elderly in China, the sustainability of the pension fund is under threat. In 2019, the balance of social insurance funds nationwide was Rmb585.486 billion, and after fiscal subsidies were excluded, there was a deficit for the seventh consecutive year.
Source: Global Times
JAPAN
Government Pension Investment Fund (GPIF) has begun passively investing a combined total of ¥1.3 trillion ($12.5 billion) against two new environment, social and governance-themed indices.
The benchmarks are MSCI All Country World ESG Universal Index and Morningstar Gender Diversity Index, the pension fund said on December 18. GPIF said it would continue proactive ESG investment to protect and grow the pension reserve for several generations of beneficiaries.
Source: GPIF
MIDDLE EAST
Having lost out on buying stocks on the cheap during the 2008 global financial crisis, Saudi Arabia’s sovereign wealth fund was ready to react when the coronavirus pandemic sent markets into a tailspin.
“The crown prince [of Saudi Arabia] always talked about how we missed an opportunity in 2008 to invest in international markets, so we were ready,” Yasir Al Rumayyan, governor of the Public Investment Fund, said in a televised interview. The two had “talked about the things that we should do if we face something like this”.
PIF received a $40 billion transfer from the country’s reserves in March so it could take advantage of the crash in markets, buying stakes in companies including Citigroup, Facebook and cruise ship operator Carnival. By the end of June it had sold most of those stakes and switched to holding about $7 billion in exchange-traded funds.
Source: Bloomberg
MALAYSIA
Sovereign wealth fund Khazanah Nasional has bought part of private equity firm India Alternatives’ stake in Indian credit information bureau TransUnion Cibil for Rp3.4 billion ($46.0 million).
India Alternatives invested in TransUnion Cibil in 2015, which began operations in 2000 and offers services ranging from basic credit scoring to high-end predictive analysis.
Source: Livemint
SINGAPORE
Sovereign wealth fund GIC has agreed a joint venture with US property investment firm Kennedy Wilson to acquire and manage urban logistics properties in the UK, with the potential to expand into Ireland and Spain.
The JV will be seeded with a $220 million portfolio comprising 18 urban logistics assets in prime locations in the UK that are currently owned by Kennedy Wilson. The JV will seek additional last-mile urban distribution centre investment opportunities, targeting total assets of up to $1 billion.
Kennedy Wilson will be responsible for the sourcing, acquisition and management of the assets. The company will have 20% ownership and GIC 80% ownership in the JV.
Source: GIC / Kennedy Wilson
Singaporean sovereign wealth fund GIC has invested $200 million in a geothermal heating company backed by China’s biggest oil refiner, people with knowledge of the matter said.
The venture, called Sinopec Green Energy Geothermal Development, is considering an initial public offering in China or Hong Kong as soon as next year, said the people, who asked not to be identified. It is valued at around $1 billion, one of the people said.
GIC has previously invested in other renewable energy firms, including India’s Greenko Energy Holdings and Japan Renewable Energy Corp.
Source: Bloomberg
INTERNATIONAL
California State Teachers' Retirement System is accelerating investment into Chinese companies, with Chinese tech giants Alibaba and Tencent now representing two of its top 10 equity holdings, alongside Apple and other US companies.
This is first time two Chinese companies were among the pension fund's top 10 holdings, said Christopher Ailman, chief investment officer. He said the company's focus was on two "Cs": climate change and China.
Chinese stocks, including those listed in Hong Kong, now account for 2.9% of listed stocks under the fund's management. This is just below its holding of Japanese stocks at 3.5%, its largest after US shares.
Source: Nikkei Asia
Canada’s Ontario Teachers’ Pension Plan (OTPP) has agreed to invest W300 billion ($275 million) into South Korean fried chicken restaurant chain BHC Group, valuing it at W1.8 trillion, according to a report.
The Korea Economic Daily reported on December 16 that OTPP recently signed an agreement to buy shares in a special purpose company (SPC) that owns BHC from its existing shareholders including Asian private equity firm Elevation PE.
The SPC was formed in 2018 by BHC chairman Park Hyun-jong, MBK Partners’ inaugural special situations fund and Elevation PE to acquire the chicken franchise for W680 billion ($617 million).
Source: DealStreetAsia
Swedish state pension fund AP7 has cut several Asian coal producers from its equity portfolio in an expansion of the blacklist it introduced in 2018 tied to the Paris Agreement on climate change.
Ten coal producers have been excluded, eight of which are Asia-based: China Resources Power Holdings, Coal India, Inner Mongolia Yitai Coal Company, Korea Electric Power Corp, PT Adaro Energy, SDIC Power Holding, Shaanxi Coal Industry and Yanzhou Coal Mining.
The pension fund, which has around $51 billion under management, revises its list twice a year and has excluded 84 companies to date.
Source: Funds Europe