Weekly Digest: KIC boosts stewardship; EPF 2022 investment income drops
TOP NEWS OF THE WEEK
An Australian pension fund client of GQG Partners is seeking more information regarding the $1.9 billion dollar investment made by the US boutique investment firm in the Adani Group.
The US firm, which manages money for at least four major Australian pension funds, bought shares worth $1.87 billion in four firms owned by the Adani group.
This was the first major investment in the Indian conglomerate after Hindenburg’s report sparked a major controversy which led to the devaluation of Adani’s share prices.
Cbus Super, with A$71 billion ($47.76 billion) under management, has an A$243 million emerging markets mandate with GQG Partners. A spokesperson told Reuters the fund is working to get a clear picture of its Adani exposure.
Source: Reuters
Korea Investment Corporation (KIC) plans to speed up execution of its voting rights in portfolio companies over the next two years to enhance its responsible investments.
The sovereign wealth fund will select 10 overseas companies this year in which it will execute shareholders' voting rights, industry sources said.
KIC will increase the number of target firms to 50 by 2024 and 150 — 5% of its entire investee company portfolio — by 2025. It will also gradually expand its responsible investment team, which now has five professionals.
Source: Korea Economic Daily
OTHER INVESTMENT NEWS
CHINA
AllianceBernstein Holding won approval from the Chinese government to set up a wholly-owned mutual fund business in Shanghai, expanding the ranks of global players in the market.
AllianceBernstein Hong Kong should complete preparations for the new unit within six months, before getting the final business license to start selling mutual funds, according to a statement posted on the website of the China Securities Regulatory Commission on March 3.
The approval marks a milestone for AllianceBernstein’s development in China, and the company is “full of confidence” about expanding its business in the local market, according to a statement on its WeChat account.
Source: Bloomberg
HONG KONG
FWD Group Holdings raised $1.8 billion in private placements over the past two years as the insurance company owned by Hong Kong billionaire Richard Li moves a step closer to its planned initial public offering.
Investors in the placements include Apollo Global Management, Canada Pension Plan Investment Board, Huatai Securities, Li Ka Shing Foundation, Metro Pacific Investments Corporation and Li’s investment vehicle Pacific Century Group, among others, the company said when releasing its annual result
The company continues to work towards an IPO in Hong Kong this year, a source familiar with the matter told AsianInvestor.
Source: FWD Group
INDIA
The former chairman of the Pension Fund Regulatory and Development Authority (PFRDA), Supratim Bandhyopadhyay, said going back to the old pension scheme is not good for the country as most Indian states do not have financial resources to sustain the scheme.
“The old pension scheme is like accepting a post-dated cheque of a bank that is bound to fail,” he said at a actuarial conference in New Delhi.
In separate news, the position of the PFRDA chairman, which has been vacant for more than a month, is expected to be filled before the completion of this month, people familar with the matter said.
Source: Business Standard
KOREA
The National Pension Service (NPS) will collaborate with foreign exchange authorities to help stabilise the market when needed, its chairman Kim Tae-hyun He said.
He also said that that re-establishing a currency swap arrangement with South Korea's central bank which expired at the end of last year could be part of such collaboration.
The pension fund will cooperate with foreign exchange authorities to deploy the measures in case of excessive volatility, acting according to prearranged plans when the dollar/won exchange rate reaches certain levels, Kim said.
Source: Reuters
The National Pension Service (NPS) reported its worst-ever investment loss in 2022 amid a global financial meltdown, the state-run pension fund said.
According to data from the NPS, its fund operation division's investments last year achieved an operating rate of return of 8.22% or W79.6 trillion ($60 billion). Total assets at the world's third-largest public pension fund fell to 890.5 trillion won by end-2022.
By assets, local stocks and bonds fell by 22.76% and 5.56%, respectively, while overseas stocks and bonds each lost 12.34% and 4.91%. Alternative investments increased by 8.94%.
Source: NPS
Korea’s Government Employees Pension Service (GEPS) posted a 4.4% loss on investments last year, while assets under management (AUM) dropped W1.91 trillion ($1.4 billion) to W6.2 trillion.
The pension fund posted a 10.2% return from alternative assets while it lost 7.7% and 18.9% on its public bonds and equities, respectively. Indirect investment in domestic equities lost as much as 25.3%; direct investment in local equities and global shares investment lost 21.9% and 13.9%, respectively.
The pension fund allocated 2.2 trillion won, or 35.2% of its AUM, to alternative investments last year. The proportions to bonds and equities were 35.6% and 24.4%, respectively.
Source: Korea Economic Daily
MALAYSIA
Employee Provident Fund’s gross investment income in 2022 fell close to 20 per cent to MYR55.33 billion (US$12.36 billion) from 68.89 billion ringgit in 2021.
Equities brought in MYR30.54 billion ($6.82 billion) or 55 per cent of EPF's total gross income: foreign listed stocks continued to a driver of returns for the asset class, bringing in 9.27 per cent.
Income from its fixed income portfolio contributed MYR18.19 billion ($4.1 billion) or 33 per cent of the EPF's total gross income.
Source: EPF
PHILIPPINES
AXA Philippines has completed its merger with Charter Ping An Insurance Corporation (CPAIC), a subsidiary bought out by AXA in 2016.
Since the acquisition, the CPAIC continued to sell its non-life insurance products under the CPAIC name. With the completion of the merger and moving forward, all products under CPAIC will bear the AXA brand instead.
Source: Insurance Business Mag
Before it pushes through with the establishment of a Maharlika Investment Fund (MIF), the Philippines should learn from Malaysia’s experience in dealing with a financial scandal that involved its former leader and private financial institutions, Malaysian Prime Minister Anwar Ibrahim, who was visiting the country, said.
Anwar said the Philippine government should closely study the case of Malaysia’s own state fund, 1Malaysia Development Berhad (1MDB), before establishing its own multibillion-peso wealth fund.
The 1MDB scandal was a large-scale money laundering conspiracy in 2015 that involved then prime minister Najib Razak, who reportedly transferred over MYR2.67 billion from Malaysia’s sovereign wealth fund to his personal bank accounts. Razak is currently in prison for corruption.
Source: Philippines Star
SINGAPORE
State-owned GIC has committed to investing €1 billion (US$1.07 billion) for a stake in one of the world’s largest renewable energy producers, EDP Renovaveis (EDPR).
The investment will make GIC the second-largest shareholder of EDPR, after parent EDP, Portugal’s largest utility company.
EDP chief executive Miguel Stilwell de Andrade told The Straits Times the investment means GIC would effectively be taking a stake of around 5 per cent in EDPR, which would help the group accelerate growth in renewables and the energy transition.
Source: The Straits Times
TAIWAN
Taiwan’s Cathay Life Insurance has agreed to commit $80 million to the latest buyout fund of US private equity firm Hellman & Friedman, according to a stock exchange filing.
The insurance subsidiary of Taiwanese conglomerate Cathay Financial Holdings said its commitment will give it a 0.35% stake in Hellman & Friedman Capital Partners XI.
Source: DealStreetAsia
REST OF THE WORLD
Alberta’s $124 billion investment manager is looking to build ties with sovereign wealth funds in Abu Dhabi as the Canadian firm looks to expand outside its home market and diversify its portfolio.
Alberta Investment Management Co. Chief Executive Officer Evan Siddall said he met officials at some of the city’s largest funds to identify opportunities for joint investments in the region and around the world.
Source: Bloomberg