Weekly Digest: Mid-East SWF capital into China, HK climbs to $2.3bn; GPF focuses on risk resiliency
TOP NEWS OF THE WEEK
Thailand’s Government Pension Fund (GPF) is conducting a study on its strategic asset allocation strategy to identify characteristics of assets that can be resilient to risks over the next three years.
"Past markets tended to trend upward or downward, but today's markets lack a clear trend and are highly volatile, making it challenging to predict market movements. Balancing asset allocation to manage risk effectively is a significant challenge," Songpol Chevapanyaroj, secretary-general of the pension fund for civil servants, said.
The study is expected to be completed in the fourth quarter this year.
Source: Bangkok Post
About $2.3 billion of Middle East sovereign wealth fund capital flowed into the greater China market last year, Hong Kong Monetary Authority’s Kenneth Hui said at a conference.
The number was up from about $100 million in 2022, external executive director of HKMA Hui said, citing data from research consultancy Global SWF.
Multiple financial institutions and regulators have made trips to the Gulf region to engage with the market, which traditionally was served by Europe before, he added.
Source: Bloomberg
OTHER INVESTMENT NEWS
AUSTRALIA
AustralianSuper, the nation's largest superannuation fund, partnered with Assemble, a developer specialising in the build-to-rent-to-own (BTRTO) model.
The partnership recently celebrated the completion of its first project, a 199-apartment complex in Kensington, Victoria.
AustralianSuper has committed nearly A$500 million ($332 million) to Assemble's BTRTO projects, with plans to deliver over 1,400 homes by 2027.
This initiative signals a growing trend of institutional investors seeking solutions to address housing affordability while generating long-term returns.
Source: AustralianSuper
Australia’s pensions regulator said some funds in superannuation industry are not valuing unlisted assets frequently enough.
The Australian Prudential Regulation Authority (APRA) said unlisted assets in some instances were not valued “at least quarterly,” in line with the recommendations, according to a letter published June 19.
There was also room for improvement on the extent to which boards scrutinise the valuations of these assets, the letter said.
APRA deputy chair Margaret Cole said governance around unlisted asset valuations remained a supervision priority for the nation’s regulator and the organisation will continue to directly engage with funds “where weaknesses have been identified”.
Source: APRA
CHINA
China saw the world's biggest outflow of high-net-worth individuals last year and is expected to see a record exodus of 15,200 in 2024, dealing a further blow to its economy, a new report says.
Uncertainty over China's economic trajectory and geopolitical tensions are top of mind for many Chinese millionaires, in dollar terms, who choose to leave their country, according to the report by investment migration firm Henley and Partners.
The US stands out as the top destination, according to the report.
Source: Nikkei Asia
HONG KONG
Some of China’s wealthy families are turning to Hong Kong as an alternative place to manage their riches as their plans to set up shop in Singapore are slowed by intense scrutiny by the city-state following a massive money laundering bust.
Professionals who work with single-family offices, institutions that oversee the assets of wealthy investors, told Nikkei Asia that some Chinese clients are thinking of parking their capital in Hong Kong as a fallback if their Singapore plans do not work out.
Source: Nikkei Asia
Members of the billionaire Koch family will buy a minority stake in BSE Global, the holding company that owns the Brooklyn Nets, New York Liberty and the Barclays Center.
Julia Koch and her three children have agreed to invest an undisclosed amount in the group, according to a statement.
They will acquire a 15% holding in a deal valuing BSE Global at about $6 billion, a person familiar with the matter said, asking not to be identified because the information is private.
The Nets’ majority owner is Alibaba Group Holding co-founder Joseph Tsai, who will retain control of the teams, according to the statement.
Source: Bloomberg
KOREA
Korea Investment Corporation’s (KIC) sees the US market and its robust technology sector as its core of portfolio allocation, according to Lee Hoon, CIO of the sovereign wealth fund.
The CIO expects their US allocation to reach as much as 70% if the US outgrows other markets over the next five to ten years. KIC is also looking for investment opportunities in Japan and China.
“The Chinese market has advantages and disadvantages. On the positive side, unlike the global stock market rally in 2023, the Chinese stock market experienced a double-digit decline, making valuations significantly attractive,” Lee said.
Source: Asia Asset Management
The National Pension Service (NPS) and the foreign exchange authorities, Ministry of Economy and Finance (MEF) and Bank of Korea have agreed with to increase the foreign exchange swap (FX swap) transaction limit from the current $35 billion to $50 billion by the end of 2024.
This decision is aimed at strengthening the response capacity of both institutions.
Late last year, the parties agreed to extend the currency swap deal by the end of 2024 after opening the line in April last year as part of efforts to ease market volatility.
Source: MEF
The National Pension Service (NPS) chief investment officer Seo Won-joo visited Japan and Singapore had meetings with executives of Japan’s Government Pension Investment Fund (GPIF), Singapore’s GIC.
Seo discussed strategies on boosting local stocks with GPIF and shared views on long-term portfolio management with GIC, said market insiders.
NPS also held meetings with some alternative investment firms in Singapore, including TPG and Adams Street Partners.
Source: Korea Economic Daily
Korea Post has hired local lender Hana Bank as trustee and investment service provider for its deposit and insurance units. The appointment is effective July 1.
Furthermore, Korea Post is looking for an overseas bond lending trading agency for its post office deposit, with the purpose of forming a pool for overseas bond lending transactions. Deadline is June 28.
Source: Korea Post
SINGAPORE
Carne Investments, an indirect wholly-owned subsidiary of Temasek, has reached an agreement to divest 100% of its shares in Pavilion Energy to Shell Eastern Trading, a subsidiary of energy group Shell.
Pavilion Energy is a Singapore-based liquified natural gas (LNG) firm that has operations in Singapore and Europe. It markets and trades LNG in Europe and Asia to a wide range of customers and counterparties.
The transaction is expected to complete by Q1 2025, subject to regulatory approvals.
Source: Temasek
Hedge fund Arrowpoint Investment Partners secured investments from Seviora Capital a subsidiary of Temasek Holdings, and the Canada Pension Plan Investment Board (CPPIB).
These sovereign wealth funds followed Blackstone which had already seeded the new Singapore-based fund.
The fund is expected to start trading in July, with more than 15 portfolio managers.
It has also hired staff in Hong Kong, according to sources familiar with the matter.
"Blackstone, Temasek, and CPPIB have confirmed their support as our seed backers," said Joo Lee, co-founder and chief technology officer at Arrowpoint, in a Linkedin Post, on June 21.
Source: Reuters
The above briefs were curated from company news releases and third-party sources.