Weekly Digest: GIC, NPS invest in direct lending fund; KWAP to invest $4.5bn in transition assets
TOP NEWS OF THE WEEK
Singapore’s GIC and Korea's National Pension Service have invested in alternatives asset manager TPG’s Twin Brook Capital Partners' fifth direct lending fund, which closed with $3.9 billion of aggregate capital commitments, surpassing a $3 billion target, according to a person familiar with the matter.
The new fund has a roughly 60% re-up rate from investors in TPG Twin Brook’s $3.5 billion fourth fund, the person said, including GIC, which committed $375 million, the person added.
Source: Bloomberg
Malaysia's pension fund for federal employees Kumpulan Wang Persaraan (Diperbadankan) (KWAP) has pledged to commit RM20 billion ($4.5 billion) towards transition assets to fight climate change, and to achieve a net-zero portfolio by 2050.
The promises are among five that KWAP announced in its first ever sustainability report.
The commitment to transition assets is aimed at mitigating the impact of climate change and enhancing the long-term value of the fund’s investments.
Source: KWAP
Singapore ministers addressed concerns about Allianz’s plan to buy a majority stake in Income Insurance, saying it would be held to account on its commitments.
They also said the potential deal is not expected to adversely impact competition in the sector.
Europe’s biggest insurer plans to buy at least 51% of Income Insurance from NTUC Enterprise Co-operative to strengthen its presence in Asia.
OTHER INVESTMENT NEWS
AUSTRALIA
Nest, the £70 billion ($89 billion) UK workplace pension fund, is establishing an evergreen timberland portfolio and considering opportunities in Australia.
Campbell Global, JP Morgan's timberland investment arm, has been selected to develop direct investments in traditional timberland across Australia, New Zealand, Chile, and the United States.
This decision aligns with Nest's plan to increase private asset allocations, with a target of 30% of its portfolio in private markets.
The fund intends to invest £1.16 billion ($1.5 billion) in global timberland this year.
Source: Financial Standard
Australian pension funds are considering natural disaster reinsurance as a strategy to enhance returns and further diversify their portfolios with uncorrelated investments.
Colonial First State, managing A$151 billion ($99.6 billion), is reportedly exploring this option following Insignia Financial's 16% return in the sector last year.
Catastrophe bonds offer high yields in exchange for natural disaster risk. The market is growing, with record issuance in June 2024.
Fund managers are increasingly interested in raising capital for catastrophe bonds in Australia, though some experts advise caution due to forecasts of increased hurricane activity.
Source: Bloomberg
CHINA
China’s direct investment liabilities in its balance of payments dropped almost $15 billion in the April-June period, marking only the second time this figure has turned negative, according to data from the State Administration of Foreign Exchange (SAFE).
It was down about $5 billion for the first six months of 2023.
SAFE’s data, which tracks net flows, can reflect trends in foreign company profits, as well as changes in the size of their operations in China.
If the decline continues for the rest of the year, it would be the first annual net outflow since 1990 when comparable data began.
Source: State Administration of Foreign Exchange; Bloomberg
China has given the green light to Anbang Insurance Group to start bankruptcy proceedings, marking the latest step in the government’s years-long efforts to manage the collapse of the sprawling financial conglomerate.
The National Financial Regulatory Administration, China’s top financial regulator, announced the in-principle approval on August 2.
The go-ahead came nearly four years after the insolvent Chinese insurer announced its decision to liquidate.
Source: National Financial Regulatory Administration; Caixin
KOREA
Korea-based real estate managers IGIS is seeking to sell a building backed by South Korea’s National Pension Fund (NPS) and the Police Mutual Aid Association in Seoul for up to W400 billion won ($293.6 million).
IGIS plans to sell the shopping mall Noon Square purchased for W250 billion in 2012 as the fund through which the asset is scheduled to mature in March 2025.
The South Korean asset manager is poised to accelerate the sales process once it selects an advisor for the deal, which is estimated at W350-400 billon.
Source: Korea Economic Daily
The Military Mutual Aid Association (MMAA) is seeking bids for a W90 billion ($65.6 million) domestic credit mandate and aims to hire three asset managers in total.
The fund is expected to be formed within six months after the winning bidders are selected.
The deadline for bids is August 2. The three prevailing firms are expected to be hired by the end of October.
Source: MMAA
MALAYSIA
Six Malaysian government-linked investment companies will commit RM120 billion ($27 billion) into domestic direct investments over the next five years under a programme dubbed as GEAR-uP and led by Malaysia’s Ministry of Finance.
These companies are the Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP), the country’s two largest pension funds, sovereign wealth fund Khazanah Nasional, fund management company Permodalan Nasional (PNB), pilgrimage fund Lembaga Tabung Haji (TH) and Lembaga Tabung Angkatan Tentera (LTAT), the pension fund for Malaysia’s armed forces.
Their investments will primarily be directed into high-growth and high-value industries such as energy transition and advanced manufacturing, especially semiconductors.
They will also be spread across all life cycle of firms, from startups, venture capital to mid-tier companies, right through to their listings.
Source: Malaysia Ministry of Finance
THE PHILIPPINES
Maharlika Investment Corporation plans to invest in energy security projects that will link Mindoro and Palawan, the country’s two major island provinces, to the national power grid, according to Rafael Consing Jr, president and chief executive officer.
The sovereign wealth fund aims to build secondary distribution lines and power sub-stations on the islands.
Consing said, also mentioning plans to invest in a sustainable copper mining project but didn’t disclose details.
The fund also plans to invest in several big ticket infrastructure projects in a special economic zone in Pampanga, north of Manila.
Source: Asia Asset Management; Straits Times
The above briefs were curated from company news releases and third-party sources.