Insto roundup: state-backed investors bail out Huarong; Korea's NPS divests from General Electric

AUSTRALIA

John Pearce, the chief investment officer of UniSuper, has warned that valuations in the green technology sector are becoming stretched as interest in environmental, social and governance (ESG) investing rises.

As a result, some green tech assets including battery, solar panel and electric vehicle-related companies are now overpriced.

Pearce added that these asset prices may plateau as earnings catch up with high valuations.

Source: Australian Financial Review

CHINA

State-backed Chinese investors will bail out Huarong Asset Management, as the under-pressure bad debt manager unveiled losses of Rmb103 billion ($15.9 billion) after months of uncertainty over its finances.

The state-owned company said late on Wednesday that Citic, the Chinese bank, fellow bad debt manager Cinda Asset Management, China Insurance Investment, China Life Asset Management and Sino-Ocean Capital Holding, the asset manager, intended to make strategic investments of an undisclosed amount.

Source: Financial Times

HONG KONG

FWD Group, the Hong Kong-based insurer backed by tycoon Richard Li Tzar-kai, is planning to raise up to US$3 billion from an initial public offering in the US next month, according to a person familiar with the transaction.

PCGI Intermediate Holdings, FWD’s holding company, had made a confidential filing in June, which was reported by the Post. The deal will value FWD at roughly US$13 billion, the report said, quoting another person close to the transaction.

Source: South China Morning Post

Mandatory Provident Fund (MPF), the city’s largest public retirement system, ended its last financial year with HK$1.17 trillion ($150.2 billion) of assets, a 35% jump from the prior year, with an investment return of 28%.

The net investment return in 2020/21 was HK$250.7 billion ($32.2 billion) ended March 31, the MPF Authority says in its annual report published on August 12. The fund suffered 8.6% of investment loss in the last financial year.

Source: MPFA

Hong Kong’s net inflows into China funds under the Mutual Recognition of Funds (MRF) scheme plunged almost 70% quarter-on-quarter in the three months to June 30.

Net subscriptions for the 48 southbound funds – Chinese funds qualified for sale in Hong Kong – in the second quarter was 111.42 million yuan ($17.2 million), a 68% drop from 351.67 million yuan in the first three months of the year, the Securities and Futures Commission (SFC) says in its quarterly report on August 17.

Source: SFC

KOREA

Public Officials Benefit Association (POBA) is seeking two managers for a US$400 million global multi-asset investment mandate with a minimum target rate of return of 4.5% per annum.

The mandate will focus on public and private assets including infrastructure, real estate investment trusts, private equity and private debt, POBA says in its request for proposal published on the website of the Korea Financial Investment Association on August 19.

Source: Asia Asset Management

The National Pension Service (NPS) divested its entire 11.5 million shares in General Electric as of end-June, a regulatory filing showed Wednesday.

The world’s third-largest pension fund no longer held a share in Boston-based conglomerate General Electric, which was the 66th-largest stake it built with a $151.6 million valuation in March, according to quarterly filings submitted to the US Securities and Exchange Commission.

Source: The Korea Herald

MALAYSIA

Permodalan Nasional Bhd (PNB) and sovereign wealth fund Khazanah Nasional pledged to increase sustainable investments under a new three-year government initiative by former prime minister Muhyiddin Yassin.

The funds are adjusting their mandates to be compliant with the initiative, which the finance ministry said would strengthen social safeguards and the companies’ fiscal resilience, as well as create stable returns to the people.

However, the announcement came just days before Muhyiddin stepped down as prime minister after 17 months in office, and it remains unclear if new leader Ismail Sabri Yaakob will continue the initiative.

Source: Reuters

SINGAPORE

A subsidiary of a portfolio company owned by Temasek has sold 450,000 shares of Nanofilm Technologies at S$4.33 ($3.28) per share.

After this S$1.95 million disposal, the portfolio company SeaTown owns a 5.98% stake in Nanofilm, down from 6.04%.

The sell-off came on the same day major shareholder Capital Group Companies sold 3.14 million shares after Nanofilm posted disappointing earnings of S$17.9 million, a 3.1% drop from last year.

Source: The Edge Singapore

Temasek sold 859,555 shares of BlackRock for an estimated value of $1.5 billion as the finance sector rallied earlier this year.

The state investment company also sold off its holdings in American e-commerce platform ContextLogic for an estimated $327 million after the firm posted lacklustre Q2 results.

Source: SWF Institute

Sovereign wealth fund GIC has reinforced its position on infrastructure investment in emerging markets, particularly in sustainable developments.

The energy sector in particular holds potential as governments place a stronger emphasis on climate change and carbon reduction targets, managing director and head of infrastructure (Asia, Latin America and Credit) Boon Chin Hau said in a recent roundtable.

The fund plans to actively support the energy transition in emerging markets, and will continue to engage with companies and support their transition to a low-carbon approach.

Source: GIC Thinkspace

TAIWAN

Affinity Equity Partners, GIC and AlpInvest Partners sold their stakes in Hyundai Card to Taiwan's Fubon Financial, to divest from the Korean credit card company that has shown slower-than-expected progress in its initial public offering.

According to the Taiwanese firm's regulatory filing, two of its subsidiaries ― Fubon Life Insurance and Fubon Commercial Bank ― bought common shares of Hyundai Card for 13,532 won ($11.50) per share from Consumer Preferred Choice, Complete Logistic Solutions, AlpInvest Partners Co-Investments 2015 I, AlpInvest Partners Co-Investments 2015 II and AlpInvest Mich.

Source: The Korea Times

THAILAND

The Thai government’s national masterplan to reach net zero will be presented at the 26th UN Climate Change Conference (COP26) in Glasgow and will “affect many businesses”, Dr Srikanya Yathip, general secretary of Thailand’s Government Pension Fund (GPF) said.

“The proposed changes include a move to more low carbon power generation, support for the electric vehicle industry, and for the circular economy,” she added.

Thailand has pledged to reduce the emission of greenhouse gases by 20 to 25% by 2030, but has not yet made a net-zero commitment.

Yathip also said that GPF plans to join the race to net zero and is developing guiding principles for an action plan that will be ready next year.

Source: United Nations

VIETNAM

A GIC-backed gaming firm VNG Corp is considering a merger with a special purpose acquisition company (Spac) that would take the company public in the US.

The transaction would value the tech firm at $2 billion to $3 billion.

Source: Bloomberg