Insto roundup: GIC buys $2.9b property portfolio; New Zealand demands climate disclosures
GLOBAL
Institutional clients in Willis Towers Watson’s $166 billion outsourced chief investment officer (OCIO) business will find carbon emissions in their portfolios halved within the next decade and reduced to net-zero by 2050.
About 385 discretionary clients globally will be affected by the strategic change. Leaders at the consulting firm said Thursday that the decision would generate additional alpha for portfolios by managing risks and enhancing returns related to climate change. (Discretionary clients give the consulting firm authority over their trades).
The consulting firm said the halving of emissions by 2030 will be based on a 2015 baseline, aligning with the goals of the Paris Agreement.
Source: Chief Investment Officer
The likes of Canadian pension plans and Asian sovereign wealth funds are increasingly targeting the US single-family home rental market as more Americans flock to the suburbs for larger spaces.
In January, Canada’s Public Sector Pension Investment Board said it would invest in a $700 million rental-home venture through a partnership with Pretium Partners. Last month, German insurer Allianz SE announced a $300 million investment in a venture with American homebuilder Lennar to convert houses and townhomes into rentals.
And Singapore’s GIC plans to invest in single-family rental homes across the southeastern US, the Wall Street Journal reported, citing people familiar with the matter.
Source: The Real Deal
AUSTRALIA
The industry super funds for the transport and energy sectors have become the latest funds to enter discussions latest funds to enter discussions to explore the possibility of a merger.
Th A$6 billion ($4.64 billion) EISS Super and TWUSuper have entered a Memorandum of Understanding (MOU) to explore the possible merger, which would create a $12 billion fund with 130,000 members.
Members of both funds are similar in that a high portion work in high-risk occupations, which points to an alignment of values and goals, the funds said in a joint statement.
Source: EISS Super, TWU Super
CHINA
China’s finance ministry is considering transferring its stake in China Huarong Asset Management to a unit of the nation’s sovereign wealth fund that invests in financial companies, according to a person familiar with the matter.
One motivation for the proposed transfer to Central Huijin Investment is that the unit has more experience resolving debt risks, the person said, asking not to be identified discussing private information. Deliberations over a transfer have continued as investor concern over China Huarong’s financial health sent the company’s dollar bonds tumbling to record lows this month, the person said.
Source: Bloomberg
A huge run-up in foreign holdings of Chinese government bonds stalled in March as international investors hitting stop acquiring debt as China’s interest-rate advantage over the US has shrunk.
International investor ownership of Chinese government debt fell slightly to about Rmb2.04 trillion ($313 billion) in March, down from Rmb2.06 trillion a month earlier, according to the China Central Depository & Clearing Co. Holdings.
The drop was the first since February 2019, and took place during a month when the renminbi weakened more than 1% against the dollar while prices for US Treasuries and other global government debt was falling. The spread has narrowed to about 1.6 percentage points, after topping 2.2 percentage points throughout the second half of last year, data from FactSet and brokerage Tullett Prebon shows.
Source: Wall Street Journal
INDIA
Sovereign wealth fund Abu Dhabi Investment Authority and the real estate arm of Caisse de dépôt et placement du Québec, Ivanhoe Cambridge, are amongst 14 anchor investors in Mumbai-based real estate developer Macrotech.
Macrotech raised a total of Rs7.4 billion ($499 million) ahead of its initial public offering which opened on April 7 and concluded on April 9. Brookfield Asset Management and Nomura are also among the anchor investors.
This is Macrotech’s third time attempting an IPO after aborting plans in 2009 and 2018 citing market conditions.
Source: DealStreetAsia
JAPAN
The Government Pension Investment Fund (GPIF) said it would decide in the coming months whether to continue to invest via the FTSE Russell’s flagship bond index, a resolution that could affect billions in assets tracking the index.
FTSE Russell confirmed on March 31 that it would include Chinese government bonds in its World Government Bond Index (WGBI), despite reportedly facing objections to its plan from Japanese investors.
Their resistance to China debt inclusion is of vital importance to FTSE Russell because Japanese investors are heavy users of the WGBI. Although there is no concrete data, it has been estimated that investors based in Japan could represent as much as 80% of funds pegged to the index, which is currently tracked by roughly $2.5 trillion of assets, according to Nomura.
Source: Financial Times
Life insurers in Japan and Taiwan are shunning US treasuries as benchmark yields languish around five-week lows.
Japan’s Daido Life Insurance said it would consider buying 10-year treasuries when yields rise to 2%, from around 1.56% currently, while a major Taiwanese insurer said it would buy when yields approach 1.75%.
The benchmark yield rose as high as 1.776% at the end of March for the first time in 14 months, as investors bet that massive fiscal stimulus amid continued monetary easing in the US would spark faster inflation than the Federal Reserve anticipates. But this month, the Fed’s insistence that near-term price pressures will be transitory has soothed the market, with the 10-year yield dropping as low as 1.528% last Thursday.
Source: Reuters
MALAYSIA
Italian insurer Generali is said to be acquiring €700 million ($838 million) worth of French insurer Axa's Malaysian assets. The deal is worth around €300 million, according to the sources, who also said Generali was eyeing Axa's non-life business.
According to Generali chief executive Philippe Donnet, the insurer has more than €2 billion for M&A and on the lookout for opportunities.
Source: Reuters
Sovereign wealth fund Khazanah raised RM312 million ($75.66 million) from a placement of 53.8 million shares in national telecommunications company Telekom Malaysia on April 14. This is part of the state firm’s wider portfolio rebalancing activities.
The shares were placed out to a pool of domestic long-only institutional investors and multi-strategy institutional investors, Khazanah said. The procees from the placement will be used for new investments, including in sectors that can help to spur growth and job creation in Malaysia.
Source: The Edge Markets, Khazanah media release
NEW ZEALAND
New Zealand has become the world’s first country to introduce legislation that requires financial institutions to disclose the impact climate change has on their business.
The bill has been introduced to parliament and is expected to have its first reading this week. It requires eligible companies to report on the effects of climate change and plans to manage these risks and opportunities.
The new legislation will apply to 200 companies, including banks with more than NZ$1 billion ($703 million) assets, insurers with more than NZ$1 billion assets under management, and equity and debt issuers listed on the country's stock exchange.
Source: Reuters
SINGAPORE
Ride-hailing app Grab is to list on Nasdaq through a merger with Altimeter Capital Management’s $450 million special purpose acquisition company (Spac), in the world’s largest Spac deal to date.
Singapore state investor Temasek, Malaysian state investor Permodalan Nasional, BlackRock and Fidelity are among those investing $4 billion as part of the transaction. The deal values the ride-hailing super-app around $39.6 billion.
Temasek’s $10 million investment in Grab in 2017 (then known as Grabtaxi) through its venture capital arm Vertex Ventures, prompted the ride-hailing company to move its headquarters from Malaysia to Singapore. Grab is reportedly considering a secondary listing via Spac in Singapore.
Singapore sovereign wealth fund GIC and Hong Kong-listed real estate platform ESR Cayman are to acquire an Australian property portfolio for A$3.8 billion ($2.9 billion) with funds managed by Blackstone.
Bidco, a 20:80 venture between ESR Cayman and GIC, will enter into unit sale agreements with the Blackstone funds for the acquisition of the property portfolio, which comprises 45 industrial and logistics real estate assets in Australia.
Source: Straits Times
Temasek and GIC took part in a Softbank-lead $676 million funding round for artificial intelligence software firm SambaNova. The investment values the California-based start-up at US$5 billion.
The investment comes from SoftBank Vision Fund 2. UAE’s Mubadala and Saudi Arabia’s Public Investment Fund are limited partners in SoftBank’s $100 billion Vision Fund 1, but disappointing performance reportedly had these investors pull out of the second fund.
Sources: Business Times, Reuters
Singapore state investor Temasek led a $200 million Series E funding round in Chinese dental services group Arrail. Investors OrbiMed Healthcare Fund Management, Ward Ferry Management and Mirae Asset Group also participated.
The Beijing-based firm said it would use the proceeds to expand its stores across China. It currently operates 100 dental clinics and hospitals in 16 cities.
Source: DealStreetAsia
Singapore state-owned investment company Temasek and US equity investor Pontifax AgTech led a $70 million Series C in US food waste solutions firm Hazel Technologies. Hazel has developed vapour-releasing sachets which extend the shelf-life of fresh produce by up to three times, thus reducing food waste caused by decay.
The move follows Temasek’s setting up of carbon-focus venture capital firm with BlackRock earlier this month.
Source: PR Newswire
Singapore sovereign wealth fund GIC led a $234 million funding round in Indonesian ecommerce firm Bukalapak alongside Microsoft and local media conglomerate Emtek.
Standard Chartered’s venture capital arm SC Ventures and South Korean web portal Naver Corp also took part in the round.
The company is said to be mulling a listing an initial public offering (IPO) in Indonesia and a special purpose acquisition company (Spac) listing in the US.
Source: Reuters
INTERNATIONAL (EX-ASIA)
CPPIB in 2019 partnered Piramal Enterprises to co-sponsor India’s first renewable energy-focused infrastructure investment trust Invit. In February, the Ministry of Finance announced the launch of government-sponsored power and highway Invits as part of wider measures to crowd in foreign investment into Indian infrastructure.
Source: Mint
Netherlands based APG Asset Management has acquired a 20% stake in OneAsia for an undisclosed amount. OneAsia, a Hong Kong-based data centre company, will also form a new partnership with APG, it said on Friday (April 16).
While OneAsia has so far operated data centres in Hong Kong and Greater China, it said the partnership would "escalate the momentum of its footprint extension and its diversified reach further into North and South East Asia through a pipeline of opportunities in China, Japan, Korea and Thailand".
Source: OneAsia press release; DealStreetAsia
The Washington State Investment Board will commit as much as $250 million to Blackstone’s second pan-Asian fund.
Blackstone Capital Companions Asia II (BCP Asia II) has target of $6 billion and can invest in large-scale takeovers of development corporations in Australia, China, India, Japan, Korea and Southeast Asia.
Source: DealStreetAsia; Investing News Wire