Weekly Digest: INA hires ex-BlackRock private credit expert; India extends tax breaks to SWFs

TOP NEWS OF THE WEEK

Indonesia Investment Authority has hired BlackRock’s former head of private credit in Indonesia, according to a Bloomberg report.

The sovereign wealth fund has tapped Christopher Ganis as managing director of investments in hybrid capital solutions, which includes private credit.

Ganis said in an interview that the fund is looking to lend into deals with “an Indonesian angle” and ticket size between $75 million to $750 million.

Source: Bloomberg

India’s annual budget has extended tax benefits to some investments made by sovereign wealth funds, for another 12 months, or until March 31, 2025.

These benefits were set to expire on March 31, 2024.

These tax breaks are provided to sovereign wealth funds and certain pension funds on dividends, interest, and long-term capital gains arising from investments in infrastructure in India made between 2020 and 2024, subject to certain conditions.

This will offer a boost to global SWFs and pension funds like Temasek, Canadian Pension Plan Investment Board, Ontario Teachers Pension Plan, which have all invested in Indian infrastructure,

Source: Moneycontrol.com

Korea Investment Corporation (KIC) reported an 11.6% investment return for 2023, buoyed by a solid performance in equities, lifting its assets under management to $189.4 billion.

Equities, which make up 39.2% of KIC's portfolio, returned 22.4%, while fixed income assets returned 6.3%. Alternative assets, 22% of the portfolio, handed in a 5-year annualised return of 8.6%.

KIC's CEO Seoungho Jin attributed the performance to effective asset allocation and research.

The sovereign wealth fund aims to invest in artificial intelligence, semiconductors, and healthcare amid global uncertainties.

Source: Korea Investment Corporation

OTHER INVESTMENT NEWS

AUSTRALIA

The Australian Prudential Regulation Authority (APRA) has confirmed it will conduct a “deep dive review” of a number of large and mid-size funds with material exposure to unlisted assets.

The regulator announced its plans in its interim policy and supervision priorities update on January 31.

APRA stressed the need for robust investment governance by superannuation entities in light of widespread investment market risks. They expect these licensees to uphold rigorous investment governance, with particular focus on asset valuation and liquidity management practices.

The move follows APRA introducing the requirement for superannuation funds to revalue their unlisted assets on at least a quarterly basis in July 2023.

Source: APRA

Several Australian superannuation funds, including UniSuper, Aware Super, and Equip Super, maintain investments in international defence companies amidst the Israel-Hamas conflict, facing scrutiny from their members.

The investments span prominent arms manufacturers such as Thales Group, Honeywell International, Lockheed Martin, BAE Systems, and Elbit Systems.

Aware Super’s investment in these companies totals over $19.5 million (A$30 million), while UniSuper and Equip Super have significant holdings as well, with UniSuper allocating 1.21% of a $690 million billion portfolio to Honeywell.

Other funds like Australian Retirement Trust and Catholic Super also have multiple investments in these firms.

Source: Financial Standard

Generate Capital, a sustainable infrastructure firm, has secured $1.5 billion from institutional investors and pension funds, including the California State Teachers’ Retirement System (CalSTRS), HESTA, QIC, and AustralianSuper according to an announcement on February 1.

This funding, which pushes Generate's total capital raised since 2014 over $10 billion, supports their mission to expedite infrastructure transitions by acting as a comprehensive source for capital, innovation, and collaboration in building a diverse array of global sustainable projects.

Source: Generate Capital

JAPAN

Japan's Government Pension Investment Fund (GPIF) achieved a record gain of  ¥34.31 trillion ($232 billion) at the end of 2023, as stock prices rose in Japan and abroad.

The pension fund's assets under management increased by about 20% to ¥224 trillion, helped by a weaker yen which inflated the value of its foreign holdings.

GPIF, which contributes to 10% of Japan's public pension system, has shifted its investment strategy since 2014 towards equities, which now makes up 50% of its portfolio.

The fund is now moving towards a more active asset management approach and holds a significant portion of its Japanese equity investments in index-tracking assets.

Source: GPIF; Nikkei Asia

Japanese insurer, Dai-ichi Life Insurance has introduced its sustainability finance frameworks to guide its push for making all corporate loans sustainability-related.

These frameworks offer financial support for companies' sustainability efforts and cover six loan types, including green and social loans.

Dai-ichi Life aims to convert its current 50-50 split between standard and sustainability-related loans to 100% sustainability-related in the medium term.

Source: Dai-Chi Life

MALAYSIA

Antler, an early-stage venture capital firm, announced its largest pre-seed investment round to date, committing $5.1 million to 37 startups across Southeast Asia, including Malaysia.

Antler Malaysia will invest in a total of seven startups in Malaysia ranging from consumer technology, B2B SaaS (software as a service), real estate, and property technology, as well as industrial sectors.

The Malaysia investments are part of Antler’s strategic partnership with sovereign wealth fund, Khazanah Nasional Berhad, through which it aims to to invest in over 30 startups in the country across three years.

Source: Antler

TAIWAN

Taiwan’s pension and annuity funds overseen by the Bureau of Labor Funds earned record investment income of NT$719.4 billion ($23 billion) in 2023.

Nearly half of that figure came from domestic equities as the Taiwanese stock market staged a technology-driven rally.

The average return for the eight funds rebounded to 12.8% in 2023 from minus 6.71% in 2022.

According to BLF Deputy Director General Li-Ju Liu, around 46% of income last year, or NT$330.9 billion, came from the funds’ investments in domestic stocks.

Source: Asia Asset Management