Weekly Digest: GIC, ADIA buy US logistics manager; Khazanah launches green investment platform
TOP NEWS OF THE WEEK
Singapore sovereign wealth fund GIC has, with global private investment firm Centerbridge Partners, acquired all of the outstanding common stock of US-based industrial and logistics real estate investment trust Indus Realty Trust in an all-cash transaction valued at approximately $868 million.
A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will act as a strategic investor alongside Centerbridge in the ownership of Indus following the closure of the deal.
Source: GIC
Malaysian prime minister Anwar Ibrahim has announced that sovereign wealth fund Khazanah Nasional Berhad will be spearheading the creation of a new green investment platform.
The platform will aim to attract domestic and overseas investments and will be mobilised under UEM Group Berhad, a wholly owned Khazanah subsidiary. It will seek to invest and build businesses in green sectors such as renewable energy and storage, green building technology and energy efficiency, and the e-mobility ecosystem.
The platform will seek to deliver on Khazanah’s social, strategic and financial mandates, drive Malaysia’s decarbonisation agenda, and upskill Malaysians in green industries over the long term. It will also serve to unlock value in Khazanah’s existing portfolio and achieve commercial returns by developing its seed assets through new investments and collaborating with high-potential local and international companies.
Source: Khazanah Nasional Berhad
OTHER INVESTMENT NEWS
AUSTRALIA
Australian superannuation fund Rest has acquired a stake in European private equity firm Archimed as part of its initiative to meet impact investment objectives, according to an announcement on June 29.
Archimed invests in healthcare industries with a focus on sustainable development and improving global health and economic conditions.
Rest's investment in Archimed aligns with the fund’s ambition to achieve a 1% allocation to impact investments across the total portfolio by 2026.
Rest’s first impact investment was with Australian-based Palisade Impact, which focuses on assets that target and contribute to practical solutions to social disadvantage and climate change by investing in next generation infrastructure and businesses providing essential services.
Source: Rest
CHINA
China named the People's Bank of China’s (PBOC) deputy governor Pan Gongsheng as the central bank’s new Communist Party chief, putting him in line to be the next governor, replacing Guo Shuqing, who retired as party chief.
Central bank governor Yi Gang, who was Guo’s deputy, also retired from his party role, according to the statement issued on July 1.
Pan, 59, has extensive experience in commercial banking. The Wall Street Journal reported a few hours before the statement that Pan will be named governor, citing unidentified people familiar with the matter. The central bank statement did not mention any next step for Pan after the party secretary appointment.
Source: PBOC; Wall Street Journal
HONG KONG
Two influential China hawks in the US Congress and UK parliament have accused HSBC of oppressing Hongkongers over pension rights if they want to emigrate, in a sign of the pressure on the bank as it straddles western and Asian markets.
Mike Gallagher, the US Republican representative and chair of the House China committee, and Alicia Kearns, the Conservative MP who heads the UK foreign affairs select committee, wrote to HSBC on June 30 to express “deep concern” that the bank was barring some Hong Kong residents from making early pension withdrawals if they want to move abroad.
“We are concerned that HSBC — in support of the Hong Kong National Security Law — is withholding pension funds from BNO [British National Overseas] passport holders and thus contributing to the oppression of people in Hong Kong,” they wrote to HSBC chief executive Noel Quinn, in a letter obtained by the Financial Times.
Source: Financial Times
JAPAN
The Government Pension Investment Fund (GPIF) has hired EDHEC Infrastructure and Private Assets (EDHECinfra) to evaluate the fair value of the infrastructure portfolio at the world’s largest pension fund.
EDHECinfra, which provides research on asset pricing and credit risk of private infrastructure investments, said it has been appointed to analyse the fair value of investments in unlisted infrastructure equity, with emphasis on GPIF’s own portfolio.
The fair value of private assets needs measuring on an ongoing basis, using the latest market inputs, so investors can measure risk and make meaningful comparisons with other asset classes. EDHECinfra is a regulated provider of market indices, benchmarks, and valuation analytics for investors in the unlisted infrastructure equity and private debt sector.
Source: EDHECinfra
KOREA
National Pension Service (NPS) has logged an 8.63% profit in fund management in January-April this year thanks to strong equity and fixed-income performances, the pension fund said on June 29.
The world’s third-largest pension fund manages W975.6 trillion ($741.3 billion) as of April 30, NPS said in a preliminary report. It saw W79.4 trillion in profits during the first four months of this year, almost recovering from the worst-ever-loss made last year.
Its overseas and domestic equity investments respectively achieved 14.72% and 13.87% profits from January to April. Global and local bonds posted 8.53% and 3.58% profits, respectively. Alternative assets, such as stocks, debts and real assets in private markets, saw 6.2% profit. The January-April returns don’t reflect the asset class’ fair values that are assessed at the end of every year, NPS said.
Source: NPS
The National Pension Service (NPS) has hired Macquarie Asset Management, IMM Private Equity and Hahn & Co. as its domestic private equity managers.
The pension fund will commit a combined W800 billion ($605.8 million) to the three general partners. Each asset management firm will operate funds with a five-year-investment period and 10-year maturity.
Source: NPS
The Government Employees Pension Service (GEPS) has issued a request for proposals (RFP) for two real estate debt fund mandates.
GEPS aims to commit up to $35 million to each of the mandates. To be eligible, asset managers must have been in business for at least five year, and their funds should allocate at least 80% to North America and/or Europe. The pension fund will exclude funds that allocate to only a single sector, as well as distressed funds and funs with 50% or more allocated to mortgage-backed securities.
The funds should have a target size of at least $500 million at final close. The fund manager should have at least $10 billion in private debt AUM, of which $5billion is in real estate debt. RFPs are to be submitted by July, with selected managers being announced in August.
Source: GEPS
Korea Post has selected investment management firms Rock Point and Blue Owl Capital as preferred bidders for overseas value-add real estate mandates.
According to the original request for proposals (RFP) posted in March 2023, the investments should be structured as commingled closed-end funds focusing on developed markets, with at least half of the assets allocated to North America. A minimum of 30% should be allocated to office-related investments and real estate development projects, respectively.
Korea Post has also selected Hamilton Lane and Neuberger Berman as preferred bidders for multi-strategy overseas indirect private equity mandates.
Source: Korea Post
Korean pension funds have been rapidly selling off its Kospi stocks in June.
According to the Korea Exchange on June 29, pension funds have sold a net W1.13 trillion ($857 million) in the stock market between June 1 and 28, marking the largest monthly net sale since September 2021 when it recorded a net sale of W1.68 trillion. Kospi fell to the 2,500 level after a brief recovery to the 2,600 level in June, likely driven by the large sell-off by pension funds, analysts said.
In terms of net sales by investor type, foreign investors sold a net of W948.5 billion in Kospi stocks during the same period, while private equity funds, insurance companies, and banks sold W218.4 billion, W128.1 billion, and W39.2 billion, respectively, making pension funds the largest net seller.
Source: Maeil Business News Korea
MALAYSIA
Permodalan Nasional, Malaysia’s biggest fund management company has put a brave face on a slump in its income, detailed in its newly released 2022 annual report.
The state-owned fund's income dropped 8.48% to MYR 10.38 billion ($2.22 billion) last year from MYR 11.79 billion in 2021, according to the report.
Its assets under management increased 1.46% to MYR 341.6 billion and it company reduced allocations to public equity while increasing exposure to bonds, real estate and private markets.
The report said that the fund had suffered amid "the worst year in decades for public markets globally" and that its efforts to diversify investments were neverthless generating competitive returns.
Source: Permodalan Nasional
SINGAPORE
The Monetary Authority of Singapore (MAS) has launched a public consultation on an industry code of conduct for providers of environmental, social and governance (ESG) ratings and data products. The initiative is part of a proposed approach centred on an industry code of conduct co-created by MAS with industry participants.
The planned code of conduct establishes minimum industry standards of transparency in methodologies and data sources, governance and management of conflicts of interest. The MAS will monitor the implementation of the code and observe developments in other jurisdictions before taking further steps to formalise a regulatory framework for ESG rating providers.
Co-created with ESG rating and data product providers, and modelled closely after recommendations by the International Organization of Securities Commission on good practices, the code is envisaged as a first step towards establishing standards relating to quality, reliability and transparency in ESG ratings and data products in Singapore.
The deadline for submissions to the consultation is August 22.
Source: MAS
The Monetary Authority of Singapore (MAS), Singapore Exchange (SGX Group) and the Secretariat of the Climate Data Steering Committee (CDSC) have signed a memorandum of understanding on collaborating to improve worldwide access to key climate transition-related data.
Launched by French president Emmanuel Macron and the United Nations secretary-general’s special envoy on climate ambition and solutions, Michael Bloomberg, the CDSC brings together global regulators, policymakers and civil society organisations to advise on the key data needed to support and accelerate a global net-zero transition.
The MAS-SGX-CDSC collaboration aims to synergise across MAS Project Greenprint’s ESGenome disclosure portal and the CDSC’s Net-Zero Data Public Utility (NZDPU) global repository of climate transition-related data. It will allow companies that report to ESGenome to transmit to the NZDPU their data on scope 1, 2 and 3 greenhouse gas emissions. This will help enhance the tracking of these companies’ climate commitments, and the companies will in turn benefit from access to the NZDPU’s global database to inform their own decarbonisation efforts. Work on the collaboration will commence in the first quarter of next year.
Source: MAS