Weekly Digest: GIC adds to Japan logistics; PIF anchors Saudi ETF on HKEX
TOP NEWS OF THE WEEK
GIC has acquired two Japanese logistics facilities developed by Daiwa House Industry (Daiwa), a Japanese real estate developer.
The assets, located in Takatsuki city in Greater Osaka and Tosu city in Greater Fukuoka, were completed in 2023 and 2021, respectively.
GIC has acquired several logistics facilities developed by Daiwa House this year, including a portfolio of six warehouses across Japan owned by another general partner, and more recently, a warehouse located in Yatomi city in Greater Nagoya from Daiwa House.
Source: GIC
Saudi Arabia’s Public Investment Fund (PIF) is the anchor investor of the CSOP Saudi Arabia ETF, which went public in Hong Kong on November 29, becoming the first exchange-traded product in Asia Pacific tracking the Saudi Arabian equity market.
The CSOP Saudi Arabia ETF tracks the FTSE Saudi Arabia Index, providing exposure to more than 50 large and mid-cap companies listed on Tadawul, Saudi Arabia's stock exchange. Top holdings of the ETF included Al Rajhi Bank, Saudi Arabian Oil Group, or Aramco, and Saudi Telecom.
Source: Public Investment Fund; CSOP Asset Management
Temasek, Allied Climate Partners, International Finance Corporation, and Monetary Authority of Singapore plan to establish a green investments partnership to address climate finance gaps and increase the bankability of green and sustainable projects in Asia, with an initial focus on Southeast Asia.
The four parties said in a joint statement that developing Asia needs $1.7 trillion annually in infrastructure investments till 2030 to maintain growth momentum while meeting its climate goals.
However, they opined that many green infrastructure projects are only marginally bankable, and unable to attract commercial financing on their own merits.
Source: Temasek
OTHER INVESTMENT NEWS
AUSTRALIA
A consortium bid by Brookfield and EIG to privatise Origin Energy, Australia's largest energy provider, was rejected by shareholders, including the country's largest super fund, AustralianSuper.
The decision came after a 13-month corporate saga, culminating in a voting at a scheme meeting in Sydney.
The final offer of A$9.39 per share by the consortium received 69% support, falling short of the 75% required by Australian takeover rules. Consequently, Origin will maintain its status as an independent ASX-listed company.
AustralianSuper, Origin's largest shareholder with 17%, had been vocal in its opposition to the "low-ball" offer.
Source: Reuters; AustralianSuper
Future Super has acquired Verve Super, a women-focused fund, becoming its sole owner.
The move aims to ensure Verve's long-term sustainability and is a logical step for the two organisations, which have had a close relationship. Verve Super was launched in 2018 with support from Future Super, which took a 20% stake in the fund.
Both firms share a commitment to ethical investing and avoiding investments in fossil fuel companies.
As part of the acquisition, both Future Group and Verve Super changed their service providers, switching to BNP Paribas as custodian, Apex Group as administrator, and Equity Trustees as trustee.
Future Super, which also recently acquired GuildSuper, now ranks among the top 15 largest superannuation groups in Australia, with a total of 383,000 member accounts.
Source: Financial Standard
Australian pension funds called for the government to enact reforms that would make it easier to invest in domestic renewable energy projects and warned that without action investors would opt for more compelling overseas projects.
Australia's electricity transmission network, batteries and sustainable aviation fuel are three areas where simplified planning, subsidised finance and other regulatory changes could catalyse investment, according to a report released by eight major pension funds.
Changes could quickly unlock A$4 billion ($2.7 billion) worth of investment in batteries, the report said, published by super fund-owned IFM Investors together with super funds AustralianSuper, ART, CareSuper, Cbus, HESTA, Hostplus, Rest Super, and UniSuper.
Source: IFM Investors
CHINA
Two state-backed Chinese insurance firms plan to launch a joint Rmb50 billion ($7 billion) private fund to invest in yuan-denominated shares as policymakers ramp up support for the struggling stock market.
New China Life Insurance and China Life Insurance will each invest Rmb25 billion in the fund that will be managed by a joint venture called Honghu Private Securities Investment Fund, New China Life said in a statement to the Shanghai exchange on November 29. The plan is subject to approval from shareholders, it said.
The stock fund is aimed at increasing longer-term investment assets that suit the company’s strategy, optimising the structure of assets and liabilities and improving the efficiency of capital use, New China Life said.
Source: South China Morning Post
Industrial heavyweight ESR has sold a 95% stake in a portfolio of six Chinese industrial properties to China’s Taikang Insurance in a deal that values the assets at Rmb2 billion ($282 million), according to a filing by the Hong Kong-listed company.
The Warburg Pincus-backed developer and fund manager sold a 349,649 square metre (3.8 million square foot) portfolio into a vehicle backed by the Beijing-based insurer, with ESR, which also manages the fund, retaining a 5% stake.
Source: Mingtiandi
JAPAN
Nippon Life Insurance said November 29 that it has agreed to acquire Nichii Holdings Co., the parent of leading Japanese nursing care provider Nichiigakkan Co. for about ¥210 billion ($1.43 billion).
Nippon Life hopes to boost its profitability by entering the nursing care business, which is enjoying brisk demand amid the aging of society in the country.
Nippon Life plans to acquire 99.6% of outstanding Nichii Holdings shares from shareholders including investment funds linked to US investment fund Bain Capital, after obtaining approval by Japan's Financial Services Agency.
Nippon Life and Nichii Holdings formed a business alliance in 1999.
Source: Nippon Life
Dai-ichi Life Insurance has invested ¥100 million ($682,000) in PLANTX Inc, a Japanese agri-tech start-up that designs, manufactures, and operates artificial light-type plant factories and carries out research into environmental parameters for plant production.
PLANTX’s plant factories consist of closed-type plant production machines capable of precisely controlling the three key elements of plant cultivation environments: light, air, and water. As such, they have the potential to produce a wide variety of high-quality plants.
This impact investment is part of the Dai-ichi LIfe's ESG investments.
Source: Dai-ichi Life
Japanese life insurers have cut currency hedging by the most in more than a decade, signalling receding concern of a rebound in the yen that would wipe out returns from overseas assets.
Derivatives including forwards, swaps and put options protected 47.8% of foreign securities held by life insurers at the end of September, down from 52.7% six months ago. The drop of nearly five percentage points in this hedge ratio is the biggest since at least 2011, based on earnings reports from nine of the nation’s largest life insurers compiled by Bloomberg.
The life insurers’ holdings of overseas assets rose by 6.1% over the same period, the first increase since March 2022 and biggest addition in three years.
This and the lower hedging suggest that these influential investors see yen weakness becoming more entrenched, in concert with the view that any tightening in monetary policy by the Bank of Japan will be gradual.
Source: Bloomberg
KOREA
National Pension Service (NPS) posted an 8.66% investment return from January to September of this year with assets under management (AUM) amounting to W984.2 trillion ($760 billion).
By asset class, public stocks in domestic and overseas markets posted 13.43% and 16.07% returns in the third quarter, respectively.
Local and overseas fixed-income logged 2.54% and 7.25% returns, respectively, in the July-September period.
Alternative assets, such as equity, debt, real estate and infrastructure in private markets, posted a 7.39% return in the third quarter.
Source: NPS
Korea Investment Corporation (KIC) posted a 7.12% return on total asset investments in the first eight months of this year, recouping about 40% of last year’s record loss of $27.9 billion.
Thanks to the gain, its total assets under management (AUM) added $12.1 billion from end-2022 to $181.4 billion as of the end of August this year. The year-to-date return on stock and bond investments as of August stood at 15.29% and 1.11%, respectively, resulting in a return of 8.32% from traditional asset investments.
KIC undisclosed the year-to-date return on alternative asset investments but revealed its annualised return on alternative investments since its first alternative investment dropped to 8.06% as of end-August from 8.23% as of the end of 2022.
Source: KIC
Korea Post has selected Canadian Brookfield and Swedish EQT as preferred bidders for a $200 million overseas infrastructure mandate. The final selection will be done after on-site due diligence.
The mandate will be done through a blind fund vehicle. According to Korea Post’s requirements, the fund will have a core plus to value-add risk-return profile, with at least 70% allocated to equity investments.
The fund vehicle should also invest in energy conversion assets, including renewable energy infrastructure.
Source: Korea Post
Eastspring Asset Management Korea, the Korean operation of Prudential plc’s asset management unit, is up for sale for about W100 billion won ($77 million).
According to investment banking industry sources, a foreign investment bank is in talks with multiple potential buyers to sell Eastspring Investments' Korean operations owned by UK-headquartered multinational insurance company Prudential plc.
The sale attempt comes after its major client National Pension Service, Korea’s No. 1 institutional investor that is also the world’s third-largest public pension fund, withdrew about 2.6 trillion won from an Eastspring Asset Management-managed active quant fund investing in a portfolio of Korean stocks.
Source: Korea Economic Daily
South Korea’s Supreme Court upheld a ruling that would allow the Affinity Equity Partners-led consortium, including Singapore’s GIC, to make a long-delayed exit from Kyobo Life Insurance Co. at more than 1.5 times their investment of W1.2 trillion won ($930 million).
Ending a five-year legal dispute between Kyobo and the investors, the highest court in South Korea cleared three accountants at Deloitte Anjin and two employees of Affinity Equity Partners of charges that they had unfairly inflated the value of unlisted Kyobo to help the group's divestment for hefty gains.
The verdict will likely pave the way for the Affinity-led investors, which includes Baring Private Equity and IMM Private Equity, to finally exit from Kyobo after more than a decade.
Source: Korea Economic Daily
SINGAPORE
Temasek Trust has signed an expression of Interest with NTUC Enterprise on acquiring MoneyOwl, the bionic financial advisor that combines human and digital platforms in its services.
MoneyOwl is owned NTUC Enterprise.
Temasek Trust hopes to develop targeted products and solutions to better meet the needs of groups such as essential workers, gig workers, and youths through the acquisition.
Source:Temasek Trust
The Monetary Authority of Singapore launched the Transition Credits Coalition (TRACTION) and two pilot projects to test the use of high-integrity transition credits in transactions for the early retirement of coal-fired power plants (CFPPs).
Supported by close to 30 members and knowledge partners across key stakeholder groups, TRACTION will study the challenges and propose solutions to scale the early retirement of CFPPs in Asia through high-integrity carbon credits.
Transition credits are high-integrity carbon credits generated from the emissions reduced through retiring a CFPP early and replacing this with clean energy sources.
Source: MAS