Weekly Digest: GIC invests in Japan logistics; Korea Post eyes London office
TOP NEWS OF THE WEEK
Singaporean sovereign wealth fund GIC has said it will invest more than $800 million to fully acquire a portfolio of six logistics facilities in Japan from Blackstone, an alternative asset manager.
The assets were developed by Daiwa House Industry, a Japanese real estate developer.
The portfolio comprises six modern warehouses with an average age of five years across Japan.
“This acquisition represents an attractive opportunity for GIC to further expand our exposure to logistics assets...It is a good addition to our Japan portfolio as we continue to focus in tailwind sectors such as hospitality and logistics,” said Goh Chin Kiong, deputy chief investment officer for real estate at GIC.
Source: GIC
Pension fund Korea Post is eyeing an office in London, its second office outside the country, to strengthen overseas investment, according to sources.
It has been eight years since Korea Post opened its New York office in 2015.
“We are in the process of reviewing the London office,” said an official from Korea Post. “While we are looking at next year, there is a possibility that it could be established as early as this year.”
Source: Maeil Business News Korea
The Mandatory Provident Fund (MPF) offsetting mechanism will be abolished on May 1, 2025, stopping employers from using their mandatory contributions to workers' accounts to make redundancy and long service payments, the government said.
The city’s lawmakers passed a bill last year scrapping the arrangement, but the end date was not decided back then, only saying it would be no later than 2025.
To facilitate the offset abolition, the government will set up and implement a government subsidy scheme worth over HK$33 billion ($4.2 billion) spread over 25 years, to share the employers' expenses in severance and long service payments.
Source: HKSAR government
OTHER INVESTMENT NEWS
CHINA
AIA Group said that AIA China has received approval from the China Banking and Insurance Regulatory Commission (CBIRC) Henan Bureau to begin operations in Henan province, the third most populous province in mainland China with close to 100 million people.
The Hong Kong-based life insurer announced on May 30, 2022 that it received approval from CBIRC to begin preparations to establish a new branch in Henan province.
“The life insurance industry in Henan has significant growth potential, which is underpinned by a sizeable middle-class population, a very large provincial economy with an annual gross domestic product (GDP) amounting to Rmb6.13 trillion ($886.9 billion) in 2022, and an exceptional talent-pool for recruitment. We look forward to meeting the evolving protection needs of people in Henan,” said Fisher Zhang, AIA China chief executive officer.
AIA China has operations in nine provinces and major urban areas, including Beijing, Shanghai, Jiangsu, Guangdong, Shenzhen, Tianjin, Shijiazhuang, Sichuan and Hubei.
Source: AIA Group
INDIA
The government has named Siddhartha Mohanty as the first chief executive of the Life Insurance Corp of India (LIC), the country's biggest insurer.
Mohanty, a veteran of the company which listed in May last year in India's biggest initial public offering, will lead LIC as chairman until June 2024 and then become chief executive until at least June 2025, according to a government document seen by Reuters.
Mohanty was previously one of four managing directors at LIC, initially taking on the additional role of chairman in March for three months.
Source: Zawya citing Reuters
Malaysia sovereign wealth fund Khazanah Nasional has invested $40 million in India-based logistics start-up Xpressbees through the acquisition of shares from one of the company’s early backers.
Elevation Capital sold a 4% stake to Khazanah at a pre-money valuation of $1.2 billion, Indian media reported.
Source: AVCJ
British Columbia Investments (BCI) along with Dutch pension fund APG are looking to invest in Mahindra Susten’s infrastructure investment trust (InvIT) the renewable energy platform of the Mahindra Group, sources close to the development told The Economic Times of India.
Canadian fund Ontario Teachers' Pension Plan Board has about 30% stake in Mahindra Susten, which it acquired in September 2022 for $300 million (INR23.7 billion).
Mahindra Susten's InvIT will be the fourth energy-focused trust in the country following KKR's Indigrid and Virescent and Edelweiss' AnZen India Energy Yield Plus Trust.
Source: Economic Times of India
JAPAN
Ten major Japanese life insurance companies said they plan to increase investments in domestic bonds in fiscal 2023, which started this month, in anticipation that the Bank of Japan will revise monetary policy this calendar year.
Seven of them plan to increase purchases of domestic bonds, mainly 20-year and 30-year superlong-term Japanese government bonds (JGBs).
The remaining three — Sumitomo Life Insurance, Taiju Life Insurance and Japan Post Insurance — will see their balances of domestic bond investments decrease due to redemptions, but they will also buy more superlong-term JGBs.
Source: Jiji Press
KOREA
Korea Post has launched a request for proposal of a $200 million foreign real estate mandate focusing on Australia and other developed nations, including in North America and Europe.
The investment is structured as a commingled fund.
Winning bidders must invest a minimum 70% of the amount in equities, with 70% allocated to residential housing rental companies.
Applications are open until the end of April and the managers are expected to be hired by the end of June.
Source: Korea Post
Korea Post is also looking to hire an asset manager for a W500 billion ($373 million) domestic real estate loan fund investment mandate, structured as a blind fund.
The fund will primarily focus on senior collateral loans and mortgage loans in property projects, including logistics facilities and offices.
Asset management firms bidding on the new tender must be experienced in managing Korean real estate loan type funds, and oversee at least 500 billion won of domestic property assets. Applications are open until May 9 and the manager is expected to be hired by the end of June.
Source: Korea Post
The Public Officials Benefit Association (POBA) is looking for an asset manager to oversee a foreign private equity fund that will primarily focus on Vietnamese stocks.
Firms bidding on the tender must be locally registered institutions with a minimum three-year track record of managing Vietnam equity funds, and at least W10 billion ($7.51 million) of assets under management in their Vietnamese equity portfolios.
The value of the tender was not disclosed. The pension fund has appointed Korean consulting firm KG Zeroin Co as investment service provider for the mandate.
Applications are open until May 9 and the winning firm will be chosen by May 25.
Source: POBA
PHILIPPINES
The low insurance penetration rate in the Philippines, especially among the poor, along with the recovery of the economy, present opportunities for the local insurance industry, according to an official from EastWest Ageas.
EastWest Ageas is a joint venture between local bank EastWest Bank and Belgium-headquartered Ageas.
The company plans to double sales in two or three years from the current 257,000 clients in the Philippines.
Source: Philippines News Agency
SINGAPORE
Temasek has refuted a claim that it has made an investment worth $10 million in algorithmic currency system Array.
On its website, Temasek said: “We have seen news articles and a tweet from Array about Temasek’s investment in it. This news is incorrect. Temasek has not invested in Array and we have no relationship with them.”
The alleged investment by Temasek was reported by several news outlets, including Yahoo News, crypto news website Coin Telegraph and Taiwan News.
Source: Temasek and The Straits Times
GIC’s Chief Investment Officer for Public Equities, Bryan Yeo, highlighted consumption, digitalisation and green energy transition among the opportunities in the developed market space on both ends of income distribution in the current market environment.
“While the middle-income consumer is likely to continue to get squeezed, especially so in a recession, we have been positioned in the very high-end luxury segment and the low-end segment (discount stores, fast food) for the past several years, and we continue to hold conviction in this exposure.
"The luxury segment seems almost “inflation-proof” due to the strong pricing power of companies, and while the discount retail sector experiences structural growth, it is defensive in recessions due to the down-trading of consumers,” Yeo said in remarks at UBS’s 3rd Sovereign Investment Circle.
Digitalisation in emerging markets is another promising area, while advanced computing, biotech, fintech, and the green energy transition are also themes that will see significant amounts of capital deployment in the form of capex, he said.
Source: GIC
GIC has signed an agreement with Brazil’s Neoenergia to acquire 50% of equity interest in eight power transmission assets in operation.
The purchase price is estimated at around 1.2 billion Brazilian reals ($240 million), subject to customary price adjustments.
A transmission holding company will be formed to hold the operational assets.
GIC will also have a right of first offer for any potential future sale of 50% of equity interest in the power transmission assets under construction by Neoenergia.
Source: GIC
TAIWAN
Taiwan's insurance industry reported a combined pre-tax loss of NT$29.5 billion ($957 million) for the first quarter of this year, according to data from the Financial Supervisory Commission (FSC).
In contrast, the industry posted a pre-tax profit of NT$135.6 billion in the corresponding quarter in 2022. The life market posted higher losses than the non-life segment, the statistics showed.
Source: Asia Insurance Review
THAILAND
FWD Thailand and Siam Commercial Bank Public Company Limited (SCB) have extended and enhanced their long-term exclusive bancassurance agreement for a further two years to meet the growing insurance and protection needs of an increasingly affluent and digital Thai population.
FWD Group acquired the life insurance entity of SCB and began the bancassurance partnership with SCB in September 2019.
FWD Thailand had approximately 1.4 million policyholders through its partnership with SCB at the end of 2022.
Source: FWD Group
The Norwegian sovereign fund formally called the Government Pension Fund Global has excluded two oil and gas companies from its $1.4-trillion wealth fund, the world's largest, citing ethical concerns over their ties to the Myanmar military.
South Korea's state-run Korea Gas Corporation and Indian gas firm GAIL (India) were excluded from the fund, Norges Bank said in a statement.
The two were excluded due to "unacceptable risk that (the) companies contribute to serious violations of individuals’ rights in situations of war or conflict," the fund’s manager Norges Bank Investment Management (NBIM) said.
"The background is the companies' business collaboration with an organization affiliated with the military in Myanmar," NBIM said.
Source: Norges Bank Investment Management