Weekly Digest: More family offices to open in HK; INA eyes more EV deals

TOP NEWS OF THE WEEK

More than 130 family offices are planning to set up or expand their operations in Hong Kong, with about three-fifths of them based in mainland China, the city’s treasury chief said.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu wrote in replies to lawmakers on April 24 that 136 family offices had indicated they were preparing or had decided to set up or expand operations in the city as of the end of March.

They consisted of 82 based on the mainland, 13 in the rest of Asia, 27 in Europe, nine in the Middle East, four in Oceania and one in North Africa, he said.

Source: South China Morning Post

OTHER INVESTMENT NEWS

AUSTRALIA

Australian Retirement Trust (ART), a major Australian pension fund with A$280 billion ($184 billion) in assets, opened its first international office in London to enhance its global investment capabilities.

ART has 40% of its assets allocated outside of Australia and more than A$25 billion invested in the UK and Europe.

The new office will focus on sourcing and securing better investment opportunities, particularly in infrastructure and real estate, to benefit its 2.3 million members.

Source: ART

INDONESIA

The Indonesia Investment Authority (INA) is aiming to partner up with overseas investors to raise capital for the electric vehicle ecosystem and geothermal energy, and providing financing for early retirement of coal-fired power plants, chief financial officer Eddy Porwanto told the Financial Times.

INA is in talks with foreign companies for joint investments in nickel mining, smelting and battery manufacturing, Porwanto added.

He declined to identify potential partners, but said they included companies outside China, which has been the largest investor in the nickel industry so far.

The fund plans to spend between $500 million and $1 billion this year across all sectors after having invested $2.1 billion since its founding in 2021, he said.

Source: Financial Times

JAPAN

Nippon Life Insurance plans to buy super-long Japanese government bonds (JGBs) and will accelerate purchases when the 30-year yield rises significantly above 2%.

“We are steadily buying 30-year securities as they are becoming attractive,” Akira Tsuzuki, executive officer of the company’s finance and investment planning department, said at a media briefing on April 24.

Nippon Life held domestic bonds valued at ¥710 billion ($4.6 billion) in the last financial year, and expects to add about the same amount this year.

Source: Bloomberg

Japan's major life insurers are slowly raising their Japanese government bonds (JGBs) incestments in an improved investment environment, although remain restrained as they assess how far yields could rise.

The end of Bank of Japan’s (BOJ) negative rates had led to an improvement in the investing environment, companies said, with additional rate hikes this year seen as an opportunity for JGB yields to rise further.

Most life insurers expect the BOJ will raise policy rates one more time before the end of the year. They also expect that will push up the JGB's yield curve.

Source: Reuters

Japanese firms should reduce their "strategic shareholdings" to improve resource allocation, which is key to Japan's economic revival, the Asian Corporate Governance Association (ACGA) said.

The association, whose membership comprises institutional investors globally, said it was issuing the letter to "underscore the need to accelerate the further reduction of these shareholdings, which we believe in principle should be zero for most companies."

Signatories include representatives of Japan's Pension Fund Association, Australian Council of Superannuation Investors, and APG Asset Management Asia.

Strategic shareholdings, which include allegiant and cross-shareholdings, serve to form business relationships between group companies and their suppliers and customers, but reduce capital efficiency, allow for persistently poor financial performance and harm competitive behaviour, the ACGA said in an open letter published on April 26.

Source: ACGA

Japan’s Government Pension Investment Fund (GPIF) has selected a suite of integrated Bloomberg products for the management of its in-house asset management operations.

The solutions GPIF has adopted include Bloomberg AIM, an order and investment management technology solution, the PORT Enterprise enhanced portfolio and risk analytics solution, and BTCA for transaction cost analysis.

GPIF already uses a series of Bloomberg’s electronic trading offerings.

Source: Bloomberg

KOREA

The National Pension Service (NPS) announced that it will hire external managers based in Korea for W1.55 trillion ($1.1 billion) worth of investments in private equity funds, credit and distressed securities and venture funds for 2024.

The lion’s share, W1 trillion won, will be assigned to private equity investments, 25% more than last year’s amount.

The W1.55 trillion is the largest-ever external investment commitment by NPS that will add distressed securities to its external portfolio for the first time with an investment of W350 billion this year.

The Korean pension fund will appoint up to three external managers for investments in bank credit, convertible bonds (CB), bonds with warranty (BW), redeemable convertible preferred shares (RCPS) and exchangeable bonds (EB), which should make up more than 80% of each fund.

Source: NPS

Teachers’ Pension is looking for three managers for a $150 million global fixed income mandate.

Investments will be benchmarked against the Bloomberg Global Aggregate Index. Investments will be done in global fixed income funds following the advice of the pension fund’s advisers for the asset class.

Asset managers that apply must have a global fixed income AUM of at least $200 million and a track record of minimum three years. Applications are open until May 10.

Source: Teachers’ Pension

SINGAPORE

Temasek Trust has launched TT Foundation Advisors which aims to be an independent provider of philanthropy advisory and management services to philanthropic foundations, family offices, business corporations, philanthropists, and charities across Asia.

“The launch of TT Foundation Advisors is aligned with Temasek Trust’s aim of building a vibrant and impactful philanthropic ecosystem in Asia by supporting the increasing interest of individuals and family offices in legacy, impact and giving to build a positive, sustainable future for every generation,” Desmond Kuek, CEO at Temasek Trust, said.

Temasek Trust is established by state-owned investor Temasek.

Source: Temasek Trust

The above briefs have been curated from third-party sources and news releases.