Insto roundup: GPIF staff say J-Reits more attractive than traditional assets; Hong Kong's strict Spac criteria
AUSTRALIA
Half of EISS Super’s directors have stepped down as a new revelation has emerged that the super fund paid the rent of a charity linked to its former chief executive’s daughter.
Four directors stepped down last week, leaving the fund with four directors – down from eight. Chief executive Alex Hutchison had also resigned after allegations of misuse of funds.
The AU$6 billion ($4.3 billion) energy-sector focused fund was also named as providing one of the 13 worst performing default MySuper funds in Australia.
The Australian Financial Review revealed on Friday (September 17) that the fund has been paying rent as part of a sponsorship deal for the Bayside Women’s Shelter in Sydney since August last year, and that Hutchison’s daughter was a caseworker at the shelter.
The fund had previously defended sponsorship deals such as these as modest charitable sponsorships.
Source: Australian Financial Review
CHINA
The CSRC (China Securities Regulatory Commission) has issued a consultation on disclosure requirements for the issuance of new securities on the BSE (Beijing Stock Exchange).
China President Xi Jinping announced earlier this month that a new stock exchange dedicated to SMEs would be set up in Beijing. The CSRC proceeded to issue draft rules for listing, trading, transfer, delisting and membership management on the new exchange.
The CSRC’s new consultation outlines requirements for prospectuses, issuance reports, annual reports, interim reports, as well as reports for changes in equity, acquisitions, and restructurings, and other information disclosure documents.
The consultation sets requirements on disclosure content and format to ensure the effectiveness and readability of information disclosure by listed companies on the BSE. The consultation is open for comment until October 2.
Source: CSRC
HONG KONG
Hong Kong will only allow large blank-cheque companies that raise at least HK$1 billion ($128 million) to list on its main board and ban retail investors from buying these so-called special purpose acquisition companies (Spacs), according to proposed rule changes by Hong Kong Exchanges and Clearing (HKEX).
In a consultation paper issued on Friday, the bourse operator proposed a range of tough criteria for Spacs listings, including requiring target companies to meet its normal listing requirements to go public. The consultation period is set to run for 45 days.
The proposals, if they move forward, will mean Hong Kong is the latest major market in Asia to allow blank-cheque firms to go public. Singapore adopted new rules this month allowing Spacs to list in the city-state.
Source: South China Morning Post; HKEX
New World Development announced on September 15 that it has signed a strategic partnership agreement with China Taiping Insurance, forming an official strategic alliance with China Taiping.
With the Greater Bay Area as the common strategic focus, the two companies have agreed to combine and deploy their respective resources to co-develop four key businesses in Greater Bay Area, including healthcare and wellness, multi-area investments, insurance businesses and elite customer services.
Source: New World Development
JAPAN
Investments in Japanese real estate investment trusts (Reits) are now more attractive than traditional financial assets such as domestic stocks and bonds thanks to the Bank of Japan’s unprecedented monetary easing, according to a report by staff at the world’s largest pension fund.
Japan’s Government Pension Investment Fund employees concluded in the report released Sept. 10 that portfolio performance could be enhanced by managing J-Reits as a separate asset class. The GPIF, which has 192 trillion yen ($1.7 trillion) of assets under management, said the report is independent of its official position.
KOREA
Korea Teachers’ Credit Union (KTCU) is looking to hire three Korean and foreign asset managers for a 60 billion won ($486 million) domestic equity mandate.
The funding will be split equally between the managers, with a possibility to increase the amount of funds depending on investment performance and market conditions, KTCU said in a statement on Wednesday (September 15).
Applicants must have a minimum of three years experience in Korean equity investments and at least 50 billion won of Korean equity strategies. Applications are open until October 1. Evaluation and manager selection are scheduled for between October 22 and November 18.
KTCU, a welfare scheme for teachers and school administrators, had around 33.1 trillion won of total assets as of June 2020.
Source: Asia Asset Management
SINGAPORE
Temasek participated in the latest funding rounds of clinical-stage biotech start-up Allay Therapeutics and alternative protein maker Growthwell.
The former raised $60 million in a Series C round in which Temasek-linked investors Pavilion Capital, Vertex Growth and Vertex Ventures HC also participated. US healthcare-focused venture capital firm Arboretum Ventures led the funding.
Meanwhile, Singapore-based Growthwell raised $15.9 million in a Series A round, according to DealStreetAsia, which quoted filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA). French private equity firm Creadev also participated. A spokesperson for Growthwell later clarified that a total of $22 million was raised.
Sources: Straits Times, DealStreetAsia
GIC and private equity firm Advent are said to be in discussion to launch a £4 billion ($5.5 billion) bid to acquire leading tea brands owned by Unilever. A consortium made up of PE firm Cinven and the Abu Dhabi Investment Authority is among the rival bidders.
Unilever disclosed it was divesting a part of its tea business in 2020 as a result of weak sales.
The brands up for sale include PG Tips and Lipton. The transaction excludes Unilever’s tea operations in India or Indonesia and its ready-to-drink tea segment.
Source: Sky News
GIC and the Abu Dhabi Investment Authority invested $5.14 million and $4.33 million, respectively, in Bengaluru-based auto component maker Sansera Engineering ahead of its IPO. Other foreign institutions that invested in Sansera include funds managed by Nomura and BNP Paribas.
Separately, GIC also backed a private equity fund by Brazilian banking group Banco BTG Pactual. GIC committed R$2.2 billion ($416 million) to the fund, which controls Brazilian fibre optic company V.tal.
Sources: VC Circle, Brazil Journal
Singapore's government announced a series of measures to boost the local stock market, including a new S$1.5 billion ($1.1 billion) fund alongside Temasek to invest in newly listed companies.
The announcement follows Singapore’s framework for special purpose acquisition companies (Spacs) to list on its bourse earlier this month.
Source: CNBC
TAIWAN
Bureau of Labor Funds invites bid for its newly-announced NTD48 billion ($1.72 billion) domestic mandate on September 17. The mandate will be invested into firms that publish a corporate social responsibility (CSR) report, and aims to bring six asset managers on board.
The funds created the mandate to support long-term deployment of domestic investment into more stable and profitable stocks with high yields.
Source: Bureau of Labor Funds
Taiwan’s insurance companies are driving the institutional business of local asset management giant Cathay Securities Investment Trust Co (Cathay SITE). Cathay SITE oversees around NT$719.4 billion ($258.98 billion) of assets for third-party local insurers and affiliates of its parent Cathay Group, according to Andy Chang, president of Taiwan’s largest asset management firm.
That figure represents two-thirds of the company’s institutional investments, and he expects the share to grow as insures increasing outsourcing.
“With interest rates low, Taiwanese insurers are more keen to launch investment-linked funds or policy instead of traditional insurance policies that provide risk coverage,” Chang says in an interview with Asia Asset Management.
He says local insurers prefer to outsource the investments to external managers with a strong insurance and management background like Cathay SITE.
Source: Asia Asset Management
VIETNAM
Vietnam’s sovereign wealth fund, State Capital Investment Corporation (SCIC), subscribed to Vietnam Airlines’s rights offering as the carrier faces accumulating losses resulting from Covid-19.
SCIC paid VND6.89 trillion ($303.56 million) to acquire 689.5 million shares.
Vietnam Airlines estimates its losses for the first half of 2021 at around VND10.79 trillion.
Source: VNExpress
INTERNATIONAL
Caisse de dépôt et placement du Québec (CDPQ) announced on September 19 that it has invested AU$2.3 billion in WestConnex, Australia’s largest road infrastructure project and is joining the Sydney Transport Partners (STP) consortium led by Transurban.
WestConnex is a critical 70 km motorway linking Sydney’s west and southwest to the city centre, the Sydney Airport and Port Botany and the project represents a major part of the New South Wales (NSW) Government’s integrated transport plan to support Sydney’s growth. By 2031, 40% of Sydney’s population is expected to live within 5 kilometres of WestConnex.
STP has executed an agreement to acquire the remaining 49% equity stake in WestConnex from the NSW Government for AU$11.1 B. This transaction will take STP’s total ownership interest in WestConnex to 100%, with CDPQ owning a 10% stake in this strategic road asset.
Through this transaction, CDPQ initiates a new strategic partnership with Transurban, one of the world’s largest operators in the sector.
Source: CDPQ
Invesco is in talks to merge with State Street’s asset-management business, people familiar with the matter said.
A deal isn’t imminent, and the discussions might not result in an agreement, the people said. It isn’t clear what the terms of a potential deal would look like, but it would likely be one of the industry’s biggest in recent memory, given State Street’s asset-management unit manages nearly $4 trillion in assets.
Source: Wall Street Journal
This article has been updated to include comments from a Growthwell spokesperson.