Insto roundup: China lags on ESG investing, says NSSF; GIC most active state investor in 2020
AUSTRALIA
UniSuper chief investment officer John Pearce is prompting his fund to take an underweight position in the insurance sector. Wild weather and rising sea levels caused by climate change have significant implications for insurer’s potential long-term returns, Pearce said.
Unisuper, which has A$80 billion ($62 billion) in assets under management, is not the only Australian asset owner looking to reduce exposure to climate risk. Other Asian investors have also started looking into mitigating climate risk.
Source: Australian Financial Review
AMG Super is consolidating two of its products into one main division as part of a three-year cost reduction plan.
The A$140 million ($108 million) Emplus Super and A$300 million Freedom of Choice Super will be merged as standalone divisions of AMG. The aim is to cut expenses by 17% over three years.
Source: Financial Standard
Michael Sommers has joined superannuation fund Hesta as general manager of portfolio construction and risk from institutional investor consultancy Frontier Advisors.
He takes charge of managing strategic asset relocation and risk budgeting processes. Sommer will report to Stephanie Weston, head of portfolio design.
He spent seven years at Frontier and previously held roles at the Canadian Imperial Bank of Commerce in London, HBOS Treasury and Lloyds.
Source: Hesta
Chen Wenhui, vice chairman of China’s National Social Security Fund, said at a January 8 summit that China’s environmental, social and governance (ESG) investment approach was lagging that of many developed countries.
MPF reported an average 12.19% return in 2020, down 0.46 percentage points from a year ago.
Dai-ichi Life Insurance decided to make an impact investment of ¥100 million ($960,540) in Metcela, a Japanese startup engaging in the development of regenerative medicines for patients with chronic heart failure.
This investment is part of the company’s ESG investment programme. According to its latest annual report, the insurer aims, by 2023, to double its total ESG investments from ¥1.37 trillion ($13.16 billion) in 2019. Dai-ichi Life had ¥36.8 trillion in total assets as of September 2020.
Source: Dai-chi Life
KOREA
The National Pension Service committed a total of $450 million to two North America-focused funds launched by Stonepeak Infrastructure Partners and Macquarie Infrastructure Partners.
New York-based Stonepeak got $250 million from the South Korean state pension scheme last year, while Australia-based Macquarie received $200 million.
With the US government widely expected to open its purse strings for infrastructure investment under Joe Biden's presidency, both infrastructure funds target annual returns of around 10%.
Source: Korea Economic Daily
Yellow Umbrella Mutual Aid Fund, a W14 trillion ($12.76 billion) vehicle that supports development of small and mid-sized enterprises, is looking to hire four domestic fund managers for a W600 billion foreign bond mandate.
The managers will be appointed for three-year terms. Applicants must have a three-year track record in foreign fixed income investments, with at least W10 billion of total assets in their foreign bond funds.
Applications for the new bond mandate are open until January 21. Evaluation and manager selection are scheduled to be carried out between January 29 and February 9.
Source: Asia Asset Management
MALAYSIA
Khazanah Nasional sold $44 million worth of shares in India’s IDFC, following a $19 million share sale in December. The latest disposal reduces the sovereign wealth fund's stake in the financial services holding company to 2.12% from 7.3%.
Khazanah originally bought an 8.97% stake in IDFC in 2007, its oldest investment in India.
Last year the SWF sold shares in a number of Indian firms, notably Fractal Analytics, L&T Finance and Apollo Hospitals.
Source: The Edge Markets and VCCircle
SINGAPORE
Temasek-linked impact fund ABC World Asia led a $20 million series C funding round in Indian agritech startup CropIn. Existing investors Chiratae Ventures, Invested Development and Ankur Capital also joined the round, as did new investors CDC Group and Pratithi Investment Trust (Kris Gopalakrishnan’s family office).
The investment in CropIn is ABC World Asia’s first in India. As part of the fundraise, the managing director of ABC World Asia, Sugandhi Matta, will get a seat on CropIn’s board.
ABC World Asia invests in companies committed to generating social or environmental impact, according to its website.
Source: Business Standard and VCCircle
Temasek Holdings is competing with investment bank Goldman Sachs and PE firm Carlyle for a 30% stake in contract research organisation (CRO) GVK Biosciences. The successful investor will buy out ChrysCapital’s 17% stake in the firm, which ChrysCapital acquired five years ago.
GVK Biosciences is one of India’s largest CROs and provides research and development services to the biopharma and life sciences industry. The transaction would value the Hyderabad-based company at INR60 billion ($800 million), over three times its 2015 valuation.
Source: VCCircle
GIC took first place in a list of the world’s most active state investors in 2020 compiled by data provider Global SWF.
The sovereign wealth fund came top for the second year running with $17.4 billion worth of investments, though this is lower than its 2019 figure of $24 billion, reflecting disruptions to global economic activity caused by Covid-19.
Fellow Singaporean state investor Temasek came fifth overall, with $11.3 billion, but emerged as the world’s most active investor for technology deals, with $2.3 billion allocated across industries such as healthcare, e-commerce and biotech.
Source: DealStreetAsia
Temasek has hired impact investor Ann-Marie Wun in Singapore as its new operating partner for sustainability. The hire reflects the state investment fund’s increased focus on this area.
Wun previously worked for UBS, Deutsche Bank and Pacific Star Group in senior investment roles, and at PSA International in a treasury role.
In November 2019 Temasek announced its intention to be carbon neutral by 2050 and since 2014 has run a yearly sustainability event known as Ecosperity. Temasek is also an investor in plant-based meats pioneer Impossible Foods.
Source: Eco-Business
The scandal erupted in late November when Yu Nai-wen, BLF’s head of domestic investment, was detained by Taiwan’s anti-corruption unit on suspicion of stock manipulation. The Financial Supervisory Commission has launched a probe into the matter, said a spokesperson for the regulator.
Source: Asia Asset ManagementTaiwan launched a pension fund for farmers on January 6, into which eligible individuals can deposit 1% to 10% of their earnings.
President Tsai Ing-wen said the fund’s establishment completed a benefits package that the government had promised to farmers. She added that the implementation of farmers’ insurance meant Taiwan had retirement funds for all sectors of the economy.
Source: Radio Taiwan International
VIETNAM
State Capital Investment Corporation will buy Vnd8 trillion ($348 million) of new shares in Vietnam Airlines on behalf of the government as part of a rescue plan for the struggling national carrier.
Vietnam Airlines is seeking to raise Vnd8 trillion equity from shareholders, following a loss of Vnd10.7 trillion for the first nine months of 2020.
The state-owned holding company-cum-sovereign wealth fund agreed to acquire 85% of the new shares as part of a rescue package that also includes Vnd4 trillion in soft loans. The issuance will be completed by June 2021.
Source: Ch-aviation
INTERNATIONAL (EXCLUDING ASIA)
A group of institutions boasting $2.4 trillion in assets, incorporating asset owners and asset managers, has filed a resolution asking HSBC to publish a strategy and targets to cut its exposure to fossil fuel assets in alignment with the Paris targets, starting with coal.
According to the Rainforest Action Network, HSBC is Europe’s second largest financier of fossil fuels after Barclays, having provided $87 billion to some of the world’s largest fossil fuel companies since the Paris Agreement was signed
The asset owners involved include Denmark’s AkademikerPension; the UK’s Brunel Pension Partnership, Merseyside Pension Fund, Islington Pension Fund and Trinity College, Cambridge. Amundi and Man Group are among the asset manager signatories.
Source: Citywire
Based on pension plan data for 366 Fortune 1000 companies that sponsor US defined benefit (DB) pension plans with a fiscal year ending in December, the aggregate funded status was an estimated 87% at the end of 2020, the same as at the end of 2019, according to analysis from Willis Towers Watson.
As a result, aggregate pension plan assets for the DB funds increased to an estimated $1.6 trillion at the end of 2020 from $1.52 trillion at the end of the previous year.
Source: Chief Investment Officer
After seeing their aggregate funding level plummet to around 80% at the end of the first quarter, Canadian defined benefit plans rebounded to end the year at 91.2% from 90.8% a year earlier, according to professional services firm Aon.
“Equity markets performed strongly in 2020 and helped funded ratios improve,” Erwan Pirou, Canada CIO for Aon’s retirement solutions unit, said in a statement. “However, some pension plans did not realise the full benefit of the equity market rally, as some active equity managers underperformed their benchmark.”
Source: Chief Investment Officer