Weekly Digest: GPIF plans infra mandate; INA to grow nature-based solutions
TOP NEWS OF THE WEEK
Government Pension Investment Fund (GPIF) on August 7 issued a request for information on potential investment opportunities in the domestic infrastructure market, including proposals for a co-investment program or opportunity.
It will gather information including, but not limited to renewable energy, telecommunication (data centres, fibres, towers, etc.), electric power (transmission and distribution, power generation facilities, battery storages, etc.), transportation (railways, airports, ports, parking, etc.), gas pipelines, water and sewerage, district heating, energy transition-related businesses including hydrogen and ammonia businesses, waste management, PPP/PFI-related businesses, etc.
Source: GPIF
The Indonesia Investment Authority (INA), the country’s sovereign wealth fund, and Pollination, a British climate change investment and advisory firm, have signed a memorandum of understanding to collaborate on investment in nature-based solutions.
Nature-based solutions are techniques that involve using the inherent capacity of natural ecosystems to absorb carbon emissions, bolster biodiversity, and nurture socio-economic growth.
The INA and Pollination plan to identify investment opportunities and develop and invest in a range of projects.
Indonesia holds the world's second-largest low-cost nature-based solutions potential, accounting for 75% of Southeast Asia’s carbon stocks.
Source: INA
OTHER INVESTMENT NEWS
AUSTRALIA
Australia's third-largest pension fund will stay active in Japanese markets in the coming months and is neutral about China despite growing investor aversion to the country's markets.
The A$160 billion ($104 billion) Aware Super made "good money" recently due to an overweight position in Japanese equities, Head of Investment Strategy Michael Winchester said in an interview with Reuters.
"Japan has been such an incredible story," said Winchester.
"We don't have a top-down view that we should be overweight or underweight China at the moment... We're happy to let our investment managers buy attractively priced Chinese companies with good prospects," he said.
Source: Reuters
CHINA
US-based Thornburg Investment Management lost its business licence in China to raise funds for outbound investment only one year after it was granted, according to the Asset Management Association of China (AMAC) website.
Thornburg Investment Management (Shanghai) Limited was deregistered as a qualified domestic limited partnership (QDLP) fund manager on July 16, 2023, the website showed.
According to the deregistration category, it failed to launch its first private fund within the required time period of 12 months.
Source: Asset Management Association of China
China is pushing banks and insurers to step up support to flood and disaster-stricken companies and business owners to speed up their return to normal operations, its financial regulator said in a circular.
The National Financial Regulatory Administration said banking and insurance institutions should organise and mobilise disaster response, safeguard financial assets and important data and guarantee the stable operation of basic financial services and key infrastructures.
The regulator's circular came after heavy rainfall brought by storm clouds from Typhoon Doksuri battered several regions in northern China, killing at least 60 people and damaging homes, crops and infrastructure.
Source: National Financial Regulatory Administration
JAPAN
Government Pension Investment Fund (GPIF) on August 7 issued a request for information on potential investment opportunities in the domestic infrastructure market, including proposals for a co-investment program or opportunity.
It will gather information including, but not limited to renewable energy, telecommunication (data centres, fibres, towers, etc.), electric power (transmission and distribution, power generation facilities, battery storages, etc.), transportation (railways, airports, ports, parking, etc.), gas pipelines, water and sewerage, district heating, energy transition-related businesses including hydrogen and ammonia businesses, waste management, PPP/PFI-related businesses, etc.
Source: GPIF
Japan's big life insurance companies are poised to buy more ultra-long-term Japanese government bonds, emboldened by the Bank of Japan's move to relax its hold on the high end of the yield curve.
Seven out of nine leading life insurers told Nikkei the BOJ's policy adjustment, which allows 10-year JGB yields to rise above 0.5%, is a positive factor for buying ultralong government debt.
"As yields on 30-year bonds approach 1.5% to 2%, they become more attractive as an investment," said a portfolio manager at one life insurer.
Source: Nikkei Asia
KOREA
National Pension Service (NPS), the world’s third-largest pension fund, sold off a 50% stake in an Australian logistics center fund at A$560 million ($363 million) to UniSuper, a major retirement pension fund in Australia.
The Korean pension fund bought the 50% stake in the warehouse portfolio at A$149 million via US real estate investor Heitman LLC in 2012. Heitman and Sydney-based real asset manager Dexus formed a joint venture to operate the fund at the time.
The fund manages 20 logistics centers, including 12 assets in Sydney and eight in Melbourne, with a total floor area of 340,000 square meters.
The warehouses are leased by high-quality tenants like leading beer company Carlton & United Breweries, grocery retail giant Coles Supermarket, industrial packaging company Visy and industrial and safety products supplier Blackwoods, NPS said.
Source: Korea Economic Daily
Government Employees Pension Service (GEPS) has shortlisted four global investment firms, Blackstone, KKR & Co., Goldman Sachs and Starwood Capital Group, for its overseas real estate debt management, according to banking sources.
The Korean pension fund will see the candidates’ presentations, select two firms and commit up to a combined $70 million, or $35 million to each asset manager.
Some 80% of the two blind pools should target Europe- or North America-based real estate debt funds, excluding non-performing loans (NPLs) and distressed assets.
Each fund should be commingled and closed-end, with up to a 15-year-term and a maximum six-year investment period with option for extension. The internal rate of returns is targeted at 7%-12%.
Source: Korea Economic Daily
Korea Post is looking to hire two asset managers for a 400 billion won ($300.8 million) foreign hedge fund mandate for its insurance unit, the government postal agency’s ninth tender of the year.
Bidders must be locally registered financial institutions with at least three years of experience managing hedge funds, and a minimum 200 billion won of assets in their hedge fund portfolios, according to Korea Post’s request for proposal on August 7.
Applications are open until August 21 and the managers will be chosen by the end of October.
Source: Asia Asset Management
PHILIPPINES
The Philippines’ Social Security System (SSS) trimmed its losses in 2022, leaving it in the red to the tune of PHP442.36 billion (7.78 billion), according to a report by the country’s national audit commission.
The SSS lost PHP826.95 billion in 2021, almost double 2022’s figure.
The dramatic narrowing of the fund’s loss last year came largely due to its having set aside policy reserves of PHP478.1 billion to cover withdrawals by its members.
The SSS, which manages retirement savings for private sector employees and self-employed individuals, brought in contributions of PHP325.95 billion and incurred expenses of PHP273.35 billion.
The fund’s assets under management at the end of 2022 stood at PHP773.39 billion, up more than 10% from PHP702.4 billion in 2021.
Source: Commission on Audit
TAIWAN
Lloyd's of London underwriters are leading insurers in raising rates and cutting the amount of cover they offer for risks involving Taiwan as concerns grow over possible military action by China, industry sources with knowledge of the matter say.
Insurers are on heightened alert after Russia's invasion of Ukraine last year, which took market players by surprise and left jets stuck in Russia and ships marooned in Ukraine.
As a result, insurers have generally excluded Russia and Ukraine from policies, or increased rates. Similar action by insurers over Taiwan - the world's largest advanced semiconductor chip maker - would make it more difficult and expensive to do business there, industry sources say.
Source: Reuters