Weekly Digest: China state fund buys ETFs; Korea NPS admits overstating ESG assets
The following briefs are curated from press releases and third-party media sources.
TOP NEWS OF THE WEEK
Central Huijin Investment, the domestic investment arm of the China Investment Corporation (CIC), bought exchange-traded funds (ETFs) on Monday, October 23, expanding its purchases beyond bank shares as authorities step up attempts to boost the stock market.
Central Huijin didn’t disclose the amount of ETFs it purchased but vowed to keep increasing holdings in the future. It was the second time this month that the state-run fund disclosed its open-market investment, following an Rmb477 million ($65 million) purchase of shares in the nation’s big four banks.
Huijin may have purchased up to Rmb10 billion yuan ($1.4 billion) in ETFs, the China Fund newspaper reported, citing unusual surges in transaction volume of several ETFs during the last trading hour on Monday.
Source: Central Huijin Investment; China Fund
Korea’s National Pension Service (NPS) has admitted to overstating the amount of money it invests in socially responsible assets, adding pressure on the world’s third-largest fund to improve its record on sustainability.
The National Pension Service was called out by lawmaker Han Jeoung-ae, who said the fund assumes that all outsourced investments are socially responsible as long as the external asset managers adopt stewardship codes and guidelines, regardless of whether the investments are actually in socially responsible companies.
NPS chairman Kim Tae-hyun acknowledged on October 20 that Han was right, and that the fund would address the miscalculation of these investments, which almost tripled to W384.1 trillion ($284 billion) last year from 2021.
Source: Bloomberg
Abu Dhabi sovereign wealth fund Mubadala becomes a new investor of CBC Healthcare Infrastructure Platform’s life science real assets venture in China, committing $300 million to the venture and joining existing investors, APG Asset Management and CBC Group.
Singapore-headquartered CBC Group announced the second close of the CLSRA Venture I on October 21, securing a total commitment of $875 million.
Since the initial close in November 2021, the China-focused CLSRA Venture I has committed and deployed $450 million — or 90% of the capital secured during the first close — across four real estate projects in China in the cities of Shanghai, Beijing, and Suzhou.
Source: CBC Group
OTHER INVESTMENT NEWS
BANGLADESH
At a press conference for the launch of a new universal pension fund, National Pension Authority chairman Kabirul Ezdani Khan informed that approximately 15,000 people have registered for the pension scheme by paying subscriptions, resulting in a total deposit of Tk12.54 crore ($1.14 million) as of October 22.
Out of this amount, Tk11.31 crore has been invested in 10-year treasury bonds, which will yield an interest rate of 10.50%.
In a speech, finance minister Mustafa Kamal said the subscriptions of all the participants in the pension scheme will be deposited as a universal pension fund. National Pension Authority will invest the money in safer and less risky assets, he added
Source: The Business Post
SINGAPORE
The Monetary Authority of Singapore (MAS) on Tuesday, October 24 launched a public consultation on its proposal to streamline the regulatory framework for fund managers.
The existing registered fund management companies (RFMCs) regime will be repealed, and existing RFMCs that are in operation will be approved as licensed fund management companies (LFMCs) upon application.
“RFMCs are subject to lighter requirements in terms of the frequency and granularity of regulatory reporting, given the limits placed on their assets under management and number of customers,” MAS said.
Source: Monetary Authority of Singapore
Australia’s Mirvac Group is going to acquire land lease operator Serenitas from Singapore’s GIC for A$1.01 billion ($642.76 million) along with Pacific Equity Partners Secure Assets (PEP) and Tasman Capital Partners.
Serenitas will operate as a joint venture following the acquisition, with Mirvac and PEP holding 47.5% stakes each, while Tasman Capital Partners will own the remaining stake.
Source: Mirvac Group
Solar cell technology startup Cosmos Innovation has raised $16.8 million in Series A funding. The round was led by Xora Innovation, an early-stage, deep-tech investment platform of Temasek.
Through its seed and Series A rounds, Cosmos Innovation has raised a total of $19.7 million. The funds will go towards driving the development process of Cosmos Innovation’s perovskite silicon tandem (PST) solar cell technology, using its artificial intelligence (AI) platform.
Other investors joining the round include Innovation Endeavors, which led the seed round; Two Sigma Ventures; DeepMind chief executive officer Demis Hassabis, MIT professor Tomaso Poggio, natural language processing (NLP) researcher Richard Socher, and Western Technology Investments.
Source: Tech in Asia
INDONESIA
Indonesia Investment Authority (INA) and GDS, a developer and operator of data centres in China and Southeast Asia, have formed a joint venture, INA announced on Oct 18
The equity joint venture aims to develop and expand a data centre platform across Indonesia.
The first project is focusing on the development of a hyperscale data centre campus located in Nongsa Digital Park (NDP), Batam, an area officially designated as a Special Economic Zone (SEZ) by the Indonesian government.
Source: INA
JAPAN
Dai-ichi Life Holdings will acquire Topaz Capital, a Tokyo-based fund that takes capital from investors and lends to small businesses, Nikkei has learned.
The move comes as Prime Minister Fumio Kishida's government looks to make Japan an "asset management powerhouse," pushing institutional investors to improve their performance.
Topaz, founded in 2012, is Japan's private debt pioneer. Its two funds have so far lent out around ¥100 billion ($660 million). Dai-ichi Life Insurance and some 70 other institutional investors, including regional banks and corporate pension funds, have contributed to the funds.
Source: Nikkei Asia
The Government Pension Investment Fund (GPIF) is in the process of selecting active Japanese equities funds using quantitative and scientific methods, according to GPIF president Masataka Miyazono
On top of managers that have applied in advance for possible selection, GPIF will also consider selecting from a “wide range of funds, including those we approach,” Miyazono said on October 18.
GPIF has been selecting active funds for North American and developed country stocks excluding Japan since the fall of 2022. Only 6.9% of domestic equities that GPIF owns are managed by active funds. The pension fund will strengthen its use of data science to select fund managers regardless of their size, or whether they are newly or well-established, Miyazono said.
Source: Bloomberg
KOREA
The National Pension Service (NPS) has invested more than W6 trillion ($4.42 billion) in companies that are excluded or monitored by overseas pension funds, including those related to weapons of mass destruction (WMD), coal, and tobacco.
According to data obtained by Representative Jung Choun-sook, who is a member of the National Assembly’s Health and Welfare Committee, on domestic stock holdings of companies excluded from investment by overseas pension funds obtained from the NPS, the fund invested W359.7 billion in five WMD companies, W999.1 billion in a coal-related company, and W893.9 billion in a tobacco company at the end of 2022.
It also invested W2.46 trillion in three environmentally polluting companies, W297.3 won in a company violating human rights, and W40 billion in a company responsible for both pollution and human rights violations. Additionally, as much as W1.12 trillion was invested in three companies that are not excluded from investment but are classified as on a watchlist due to serious corruption.
Source: Maeil Business News Korea
Hana Financial Group has announced its decision to withdraw from the acquisition of KDB Life Insurance. This marks the fifth time that the insurance subsidiary of the Korea Development Bank (KDB) has failed to secure a new owner.
“We’ve suspended the deal because the acquisition of KDB Life Insurance did not align with the direction of our strategy to bolster our insurance business,” said Hana in a statement. It also cited the insurer’s debt issue.
Since being chosen as the preferred bidder in July, Hana had been undergoing the due diligence processes. KDB Life Insurance has been struggling to find a new owner in the M&A market, failing on four separate occasions. KDB initiated public sale efforts twice in 2014 and then once each in 2016 and 2020.
Source: Korea JoongAng Daily
MALAYSIA
Abu Dhabi state fund Mubadala Investment and Japanese oil and gas explorer Inpex are among firms competing to acquire Malaysian-headquartered SapuraOMV in a deal expected to be worth about $1.2 billion, according to two sources with direct knowledge.
The sale of the Malaysian oil and gas upstream company could help boost weak global merger and acquisition activity buffeted by headwinds from a slowing world economy, higher interest rates and geopolitical tension.
Indonesian energy company Medco Energi is also vying for SapuraOMV, an equal joint venture of Sapura Energy and Austria's OMV, with bids due this week, the sources added.
Source: Reuters
Malaysia’s Employees Provident Fund (EPF) is set to restructure members’ accounts to bolster retirement savings, while introducing an additional account, Flexible Account, with the option to withdraw from it at any time.
Prime minister as well as finance minister, Anwar Ibrahim, made the announcement while presenting the 2024 federal budget, not providing the timeline for the changes.
EPF currently has two accounts for its 14 million private sector or self-employed members. One account is for retirement after 55 years of age, while the other account can be used for finance education, medical needs or buying a home. The monthly contributions are split 70/30, respectively.
Source: EPF
PHILIPPINES
Philippines president Ferdinand Marcos Junior said his administration is committed to launching the Maharlika Investment Fund by the end of 2023, following an announcement that his office had plans for suspending the country’s first sovereign wealth fund, which was formally created in July.
“We are still committed to having it operated before the end of the year. So, we should not misinterpret what we have done as somehow a judgment on the rightness or wrongness of the Maharlika Fund,” Marcos said on October 19.
Philippine executive secretary Lucas Bersamin issued a statement on October 18 that said Marcos had suspended the implementation of the sovereign wealth fund. According to Bersamin’s statement, the president “wanted to study carefully the implementing rules and regulations to ensure that the purpose of the fund will be realised for the country’s development with safeguards in place for transparency and accountability.”
Source: Philippine News Agency