Insto roundup: CIC's fixed income head quits; HK Life sale called off
AUSTRALIA
Suncorp Group, an Australian financial services firm with insurance and superannuation businesses, has announced the appointment of Ian Hammond as non-executive director.
Hammond started his role on October 2, and he joins as the eighth member of the board and the seventh non-executive director. His appointment follows the retirement of non-executive chairman Zygmunt Switkowski at the conclusion of the annual general meeting (AGM) on September 20. Fellow non-executive director Christine McLoughlin was nominated to replace Switkowski as chairman at the AGM.
Source: Suncorp
CHINA
China Investment Corporation's (CIC) head of fixed income and absolute return has resigned. Fan Hua had worked at the $930 billion sovereign wealth fund since 2009, and was previously the head of Goldman Sachs' risk modeling group for 11 years. She is believed to have left to pursue other opportunities, and the fund did not comment on who it would appoint to fill Fan's role.
This year has also seen the departure of Wang Ou, head of CIC's private equity division, and Winston Ma Wenyan, its head of North America. CIC has gone a year without a chairman, but it reported a 17.6% return in 2017, its best annual return since inception.
Source: Bloomberg, Chief Investment Officer
Debt-laden and nationalised insurer Anbang aims to sell about $200 million of foreign properties, including residental holdings in Japan, to foreign bidders, including Blackstone Group, two years after buying them from the US group.
Anbang was brought under state control after a $30 billion spending spree in overseas assets and controversial policy offers left it in trouble. It initially bought the assets from Blackstone for $2.3 billion. All-told, Anbang is looking to sell $10 billion in offshore assets as part of a restructuring effort led by Beijing.
Source: Insurance Journal
HONG KONG
Singapore’s OCBC Bank has said that a planned sale of Hong Kong Life Insurance to investment firm First Origin had been called off after the buyer failed to meet certain conditions before a September 30 deadline, according to media reports.
OCBC, via subsidiary OWHB in Hong Kong, owns a third of the insurer.
OWHB is one of five owners including Chong Hing Insurance, a unit of Chong Hing Bank.
First Origin International agreed to acquire the business in March last year for HK$7.1 billion ($900 million), according to two of the sellers.
Source: FreeMalaysiaToday.com
INDONESIA
At least five insurers, including Britain’s Prudential and Canada’s Sun Life, have bid for Commonwealth Bank of Australia’s (CBA) majority stake in an Indonesian insurance venture, a media report said citing people with knowledge of the matter.
The stake sale, which could value the venture at between $250 million and $300 million, has also received second-round bids from insurer FWD Group, Singapore-listed Great Eastern Holdings and Indonesia’s Sequis Life, three people said.
Australia’s biggest lender is selling its 80% stake in PT Commonwealth Life, Reuters reported in January.
Source: Reuters
JAPAN
Government Pension Investment Fund, the world's largest pension fund, temporarily loosened a restriction that required it to invest at least one quarter of its assets into local government bonds, citing the ultra-low yields they currently provide.
At the end of June, GPIF's local Japanese government bond allocation was 27.14%, close to the minimum level, and well below its stated 35% target. With the Japanese central bank pursuing a near-zero 10-year yield policy, returns for local bonds have been minimal, so GPIF opted to include its cash amount into its 25% bond minimum. Under the new rule the fund's total allocation to cash and JGBs has to be between 25% and 40%. GPIF had 6.65% in cash as of June.
Source: Reuters
MALAYSIA
The Employees Provident Fund has added a technology mandate under its private equity programme, according to chairman Tan Sri Samsudin Osman.
The Malaysian pension fund’s private equity allocation stands at 2% of its total strategic asset allocation and EPF is targeting an increase to above 3% over the next ten years, Osman said in a statement.
Source: EPF
NEW ZEALAND
New Zealand Super Fund announced that total assets under management increased by NZ$4 billion ($2.6 billion) to $25.8 billion in the fiscal year to June 30.
The super fund, which released its fiscal year results on September 28, saw returns of 12.43% last year, beating its passive reference portfolio market benchmark by 2.02%, though falling short of the 20.71% growth the previous year. Returns performance was attributed to strategic investments in different asset classes, particularly in the timber industry, as well as efficient fund management costs, which have declined from 0.44% of net assets five years ago to 0.28% this year.
Source: NZ Super Fund
PHILIPPINES
The Bangko Sentral ng Pilipinas is eyeing to set up an online marketplace for the Personal Equity and Retirement Account (Pera), as it attempts to attract more investments for the two-year old savings scheme.
The central bank has received proposals to create a digital space in order to popularise the investment tool among the public.
Pera, which was launched in 2016, aims to complement mandatory contributions for workers through the Government Service Insurance System (GSIS) for state employees and the Social Security System (SSS) for those in the private sector.
Signing up for Pera is voluntary, unlike both GSIS and SSS.
Source: Opengovasia.com
SOUTH KOREA
Korea Post president Kang Seong-ju said in an interview that the asset owner is looking to buy riskier debt in Europe and the US and invest into offshore infrastructure and property as it aims to increase its level of investment return. The asset owner is also looking at mezzanine and distressed debt from high performing managers.
So far, Korea Post has put $760 million in mezzanine and distressed debt, and has also invested about $600 million in US collateralised loan obligations - though it doesn’t put money in equity tranches due to the higher risk, Kang said.
In addition, Korea Post began to offer simple funds to its customers and handle simple payments services via mobile phones through 222 of its postal services branches on September 3. The postal company is offering 13 simple, low risk products such as money market funds, bond-type funds and mixed-type funds.
Source: Newsworld
National Pension Service (NPS) picked BNY Mellon as a global custodian for its fixed income mandate. The pension fund has about $600 billion in assets as of June 2018, of which about $200 billion is invested in global markets.
In addition, it reappointed State Street to provide back office services to it for a further three years, and awarded the US custodian its first ever middle-office servicing mandate. State Street has been operating a variety of services for NPS's global equity portfolio since 2013, including custody and fund accounting.
Source: BNY Mellon, Asset Servicing Times
Public Officials Benefit Association (Poba) is reportedly keen to build its exposure to infrastructure assets from 5% to 10% of its overall portfolio in the next five years. The pension fund said it would look to team up with other global pension funds to do so.
Source: Infrastructure Investor
INTERNATIONAL
Some 120 founding signatories launched the Tobacco-Free Finance Pledge last week, including 15 Australian superannuation funds, New Zealand Superannuation fund and the National Reinsurance Corporation of the Philippines.
The pledge encourages signatories to consider the adoption of tobacco-free finance policies across lending, insurance and investment, in line with the United Nations’ Sustainable Development Goals and the World Health Organization Framework Convention on Tobacco Control.
In addition to asset owners, the signatories included asset managers, banks, endowments and other financial institutions.
Source: United Nations Environment Programme Finance Initiative, Globe Newswire
Canada Pension Plan Investment Board (CPPIB) is starting to invest in equity tranches of collateralised loan obligations (CLOs) alongside CLO asset managers.
CPPIB, Canada’s biggest retirement fund with C$367 billion ($281 billion) under management, said its initial partnership in this area will be with Sound Point Capital Management, a New York-based credit-focused manager.
Toronto-based CPPIB will invest $285 million in a newly established investment vehicle used to buy equity in Sound Point’s CLOs over the next several years. CLOs are securitisation vehicles holding portfolios of actively managed corporate loans.
Source: CPPIB
Other asset owner news on AsianInvestor this week:
Why GPIF invested into two new ESG indexes
Hong Kong's new framework for green finance explained