Insto roundup: Malaysia pension overhaul mooted; BLF gains new head
AUSTRALIA
The Australian Securities and Investment Commission (Asic) is suing Statewide Super and Rest Super for making false representations about fees and conditions.
Statewide Super, with A$10 billion ($7.7 billion) under management, stands accused of misleading members about insurance covers and charging for insurance that did not exist. Separately, Rest Super, a A$60 billion fund, is being sued for preventing members from switching funds, which resulted in “zombie” accounts that grew the size of the fund and subsidised fees for other members.
Asic alleged that Rest made several deceptive representations to members who wanted to switch funds, for instance that they had to keep A$5,000 in their Rest account, which is not allowed under superannuation law. Rest released a statement on March 2 stating it was disappointed with Asic's decision to launch proceedings and that the super fund is remediating affected members.
Source: Australian Financial Review
The Victorian Independent Schools Superannuation Fund (VISSF) and Aware Super have started talks to discuss a potential merger.
The A$800 million VISSF is the default fund for the education industry, with more than 75% of its members being female employees in the sector. Aware Super is Australia’s second-largest industry super fund and was rebranded from First State Super after a merger with VicSuper and WA Super last year. It now has A$140 billion under management.
Source: Aware Super
LGIA Super and Energy Super have appointed Kate Farrar as chief executive for their merged fund, effective on July 1. She will take over an organisation that manages A$20 billion ($15.3 billion) in retirement savings for 120,000 members.
Farrar has been the chief executive at LGIA Super since April 2018 and previously held senior roles at consultancy firm McKinsey, and energy retailers QEnergy and Ergon Energy.
“In three years, Kate has improved member outcomes and satisfaction, lowered the fund’s cost of providing administration services by 30%, and grown the fund by $2 billion,” LGIA Super chair John Smith said in a statement.
Source: LGIA Super, Financial Standard
CHINA
Rule changes in China around foreign ownership are aimed at fostering “national champions” in the insurance space rather than benefiting foreign insurance companies, GlobalData says.
Analyst Jazmin Chong said the abolished rule did level the regulatory playing field for foreign entries, but: “That lifting of capped ownership is aimed at benefiting Chinese firms rather than foreign ones.”
The Chinese government is expecting foreign insurance players will push domestic insurers to “learn from global best practices, fostering better corporate governance, risk pricing, and investment management,” she says.
Source: Insurancenews.com.au
HONG KONG
FWD Group has completed its purchase of an unspecified “significant” minority stake in Indonesian insurer BRI Life, according to a statement on March 3.
Jakarta-based BRI Life is a unit of Bank Rakyat Indonesia, the largest lender in the Southeast Asian country with 120 million customers. Hong Kong-based FWD said the acquisition will allow the lifer to work closely with BRI Life to sell its products to Indonesian customers.
Source: FWD, DealStreetAsia
INDIA
With tensions between New Delhi and Beijing easing in Ladakh, India is looking to “cautiously” approve some pending investment proposals from China, according to multiple sources.
The Narendra Modi government is planning to “speed up” Chinese investment proposals, albeit small ones pertaining primarily to the manufacturing sector, almost a year after the border stand-off in Eastern Ladakh began in April-May 2020, sources said.
The idea is to “open the gates for the stalled economic ties slowly and steadily”, the sources added.
Source: ThePrint
JAPAN
Government Pension Investment Fund (GPIF) has appointed CBRE Global Investment Partners for a global real estate mandate of unspecified value, marking the second time the US property manager had gained a mandate from the pension giant since September 2018.
The mandate will focus on joint venture and club deal related investments. unlike the one in 2018 which is primarily for commingle fund investments.
GPIF, which had ¥167.5 trillion ($1.57 trillion) in assets as of September, set up an asset management registration system for mainstream investments in 2016, and a separate one for alternatives in 2017. It has since hired five Japanese and foreign fund managers for global real estate, infrastructure and private equity mandates.
Source: Asia Asset Management
KOREA
Korea Investment Corporation (KIC) has appointed Kim Jintae to lead the absolute return team, replacing Park Jinseong, who will helm the alternative investment strategy group. He was previously head of KIC’s CEO office. His new role became effective on March 2.
Meanwhile, Song Sungjun has taken over as head of the private equity team from Lee Seungkul, who was appointed head of private equity and real estate in mid-January. Song’s appointment, which was effective February 28, leaves Lee heading just the real estate team.
KIC had $183.1 billion of assets under management as of December 2020.
Source: Asia Asset Management
MALAYSIA
Experts have suggested there might need to be an overhaul of the pension system in Malaysia, including changes to the Employees Provident Fund, amid concerns that many people will not have sufficient money to retire on.
The government recently relaxed conditions to withdraw money from EPF, the country’s largest pension fund, to help those affected by the pandemic. This has accelerated withdrawals but concerns over retirement provision have been brewing for a while.
Geoffrey Williams, founder and director of Williams Business Consultancy, said the structural issue might not necessarily affect EPF’s performance or income flows, but it would definitely affect the fund’s coverage of the working population. He suggested it could be time to see beyond the EPF being the dominant retirement fund for the population.
Source: The Malaysian Reserve
SINGAPORE
Singapore state fund GIC and private equity firm Cinven have finalised the acquisition of specialist insurance broker Miller from Willis Towers Watson for an undisclosed sum. Prior to the deal, Willis Tower Watson held an 85% stake in the firm.
The transaction was announced in November and was subject to regulatory approval. No further details of the transaction were disclosed.
GIC’s other investments in the insurance space include Rothesay Life and RAC Insurance, Convex Insurance, Mass Mutual Asia and China Pacific Insurance.
Source: Insurance Business Asia
GIC has supported UK carbon reduction company Storegga in the firm’s latest funding round. Existing investor Macquarie and new investor Mitsui & Co also participated in the round, the financial details of which were not disclosed.
The firm said the new funds would be used to progress its Acorn carbon capture and storage project and plans for a UK-based direct air capture facility. Storegga and Mitsui also entered into a non-exclusive agreement to evaluate additional carbon capture and storage opportunities in Europe and Asia Pacific.
Source: DealStreetAsia
GIC and Temasek are set to gain from the upcoming tech IPO surge, courtesy of their exposure to technology startups. Gojek, Ant Group, Didi Chuxing, Traveloka and Tokopedia are among the Singapore state-backed tech companies slated to go public in 2021.
Both GIC and Temasek are investors in Chinese Tik-Tok rival Kuaishou, the share price of which surged 160% in a Hong Kong IPO earlier this year, and US food delivery platform DoorDash, which listed in December.
Source: Business Times
TAIWAN
The Bureau of Labor Funds has named a new head to lead the island’s biggest pension pool. Su Yu-Ching, the former secretary general of the Financial Supervisory Commission will lead the pension from March 10 as its director general.
In mid-February, Tsay Feng-Ching had stepped down as the director general of BLF as a result of the recent bribery scandal that emerged at the state pension fund.
Source: United Daily News
Taiwanese retirement funds overseen by the BLF posted an investment return of T$29.55 billion ($1.06 billion) in January, recovering from a T$34 billion loss in the same month last year, as the semi-conductor industry drove a domestic stock market rally.
The BLF’s seven pension and annuity funds had T$5.03 trillion of assets under management as of end-January 2021, up 7.25% from T$4.69 trillion a year ago.
Source: Bureau of Labor Funds
INTERNATIONAL
Norway's central bank has put Japan's Kirin Holdings on a watch list for possible exclusion from its $1.3 trillion sovereign wealth fund over the beverage giant's business ties to Myanmar's military.
On February 5 Kirin had said it would end its partnership with Myanma Economic Holdings, a company run by Myanmar's army, after a military coup deposed the democratically elected government at the start of last month.
As part of its decision on whether to maintain its ownership in Kirin, the Norwegian fund will monitor the implementation of the company's plan to end the ties, Norway's central bank said in a statement.