Weekly digest: Temasek cuts staff pay in FTX review; INA inks logistics deal
TOP NEWS OF THE WEEK
Temasek said it cut staff compensation of the investment team responsible for investing in FTX, after conducting an internal review of the investment.
“An independent team has conducted an internal review of the investment and the findings were directly presented to the Board Risk & Sustainability Committee and to our Board.
"Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced,” the investment firm's Chairman Lim Boon Heng said in a statement.
The move comes about six months after Temasek initiated an internal review of its investment in now bankrupt cryptocurrency exchange FTX, which resulted in a writedown of $275 million.
FTX, founded by Sam Bankman-Fried, was once one of the most valuable start-ups in the fast-growing digital currency sector globally.
Bankman-Fried was arrested in December 2022 by police in the Bahamas over the FTX failure.
Indonesia Investment Authority (INA), ESR Group, and MC Urban Development Indonesia (MCUDI), a 100% subsidiary of Mitsubishi Corporation engaged in real estate development, have inked a strategic partnership to unlock the potential of developing modern warehouse facilities in Indonesia.
The venture will invest in three strategically located modern logistics parks, developed, and managed by ESR and the partners are exploring committing to additional joint investments in the sector.
This venture is INA's first investment in real estate asset class and MCUDI’s first logistics development in Indonesia.
The Indonesian warehouse market, stands at around 29 million square metres, with modern warehouses only accounting for approximately 8% of the total market.
This collaboration aims to seize this opportunity to invest in modern warehouse assets and secure a substantial share of this expanding market.
Source: INA
OTHER INVESTMENT NEWS
AUSTRALIA
Mercer Super confirmed it is undertaking a successor fund transfer with the Holden Employees Superannuation Fund (HESF), in an announcement on May 25.
The two super funds formally began discussions in December 2022 as HESF warned it was facing cost pressures associated with its diminishing size. The merger is set to be completed around June 1.
HESF had 1753 members and A$313.5 million ($205.4 million) in total assets, it said in its 2022 annual report.
The announcement follows the recent news of BT Super and Lutheran Super merging into the Mercer Super Trust.
Source: Mercer
CHINA
The head of Canada Pension Plan Investment Board said exposure to China remains important to the fund’s overall strategy but understanding the nation’s economy, and its global importance, is crucial.
Chief Executive Officer John Graham made the comments in response to a question about what it would take for China to become “uninvestable,” during an interview with Bloomberg Television. Canada’s largest pension fund has almost 10% of its assets invested in China.
“It’s important for CPP Investments to be a global investor. And to be a global investor one needs to understand the big, fast-growing economies in the world,” Graham said.
“We continue to believe we need to have exposure into China — we need to understand the economy and understand the economy’s influence on the rest of the world.”
Source: Bloomberg
Singapore Exchange (SGX Group) and Shanghai Stock Exchange (SSE) signed a Memorandum of Understanding (MOU) to launch an SSE-SGX exchange-traded fund (ETF) link. Under this agreement, SGX Group and SSE will jointly develop and promote the ETF markets in both countries through a master-feeder fund model.
This new link builds upon the successful listing of three ETFs in 2022 under the ETF Product Link with Shenzhen Stock Exchange (SZSE).
Conservative asset owners such as pension funds and life insurance companies usually make ETF investments for risk diversification.
Source: Singapore Exchange
HONG KONG
One of Hong Kong’s pension trustees, BCT Group, and Invesco Hong Kong entered into an agreement to make BCT Financial (BCTF) the plan sponsor for the Invesco Strategic MPF (Mandatory Provident Fund) Scheme.
A spokesperson for the company said it includes setting fee levels, promoting and distributing the scheme, and customer service.
BCTC will continue its role as MPF administrator and trustee while Invesco will continue as investment manager for the pension scheme. The change is expected to take place in the fourth quarter of 2023 pending required approvals from the Mandatory Provident Fund Schemes Authority and the Securities and Futures Commission of Hong Kong.
BCT and Invesco have managed the MPF scheme since 2006. After the announcement, BCT and Invesco will form a new investment committee to collaborate on additional product innovation.
Source: BCT, Invesco; Asia Asset Management
The Securities and Futures Commission (SFC) will allow virtual asset trading platforms to serve retail customers under a new regulatory regime that will become effective on June 1, 2023.
The move came after the SFC initiated market consultation on its proposed guidelines on virtual asset trading platforms earlier this year.
The Guidelines for Virtual Asset Trading Platform Operators will become effective later this week. The guidelines set out, among others, safe custody of assets, segregation of client assets, avoidance of conflicts of interest and cybersecurity standards and requirements expected of licensed trading platforms, the regulator said on May 23.
Source: Securities and Futures Commission
JAPAN
A group of major Japanese life insurance companies, banks and financial conglomerates concluded a memorandum of understanding on joint studies of business initiatives towards the development of sustainable finance.
They include MS&AD Insurance Group Holdings (Aioi Nissay Dowa Insurance and Mitsui Sumitomo Insurance Company), Sompo Japan Insurance, Tokio Marine & Nichido Fire Insurance, Nippon Life Insurance, Hitachi, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and MUFG Bank.
They will work together to launch a Sustainable Finance Platform (tentative name), a digital platform that enables connection between an investment institution and an investment destination (a listed company) and facilitates mutual understanding and disclosure of ESG-related information, etc.
“We will seek a wide range of user companies, provide a beta version of the platform in the fall of 2023 and work to verify its usefulness and strengthen various functions,” according to a joint statement on May 25.
Source: Nippon Life Insurance
Nippon Life Insurance is investing 3 billion yen ($21.4 million) in a sustainability fund created by Nissay Capital, the Japanese insurer’s venture capital arm.
The fund is called the Nissay Capital Sustainability Solutions Fund No. 1 Investment Limited Partnership, which invests in start-ups and venture capital funds that contribute to society on the United Nations Sustainable Development Goals.
It focuses mainly on decarbonisation, environmental impact, new energy, health and longevity, and sustainability, with an investment period of 18 years, longer than venture capital funds’ average period of about 10 years, Nippon Life said in a statement.
Source: Nippon Life Insurance
KOREA
The Korea Federation of SMEs, or KBIZ, is looking to hire asset managers for a 200 billion won ($151 million) domestic equity mandate structured as a fund with both active and absolute return investment strategies.
The active investment portfolio will need to outperform the benchmark Korea Composite Stock Price Index, while the absolute return strategy will focus on risk-neutral investments such as long or short strategies, KBIZ said in a request for proposals.
The asset managers will be appointed for one year with an extension possible based on their performance.
Source: Asia Asset Management
MALAYSIA
Sovereign wealth fund Khazanah Nasional Berhad has launched a dollar bond, which one source with direct knowledge said is looking to raise up to $1 billion.
The fund launched a five-year sukuk bond and a 10-year senior unsecured fixed rate bond, which is the first investment grade deal in Malaysia for two years.
Source: Nasdaq/Reuters
Employees Provident Fund (EPF), has been asked by the Anwar Ibrahim administration to increase the size of its domestic portfolio in order to spur the Malaysian economy.
EPF’s solid financial standing has prompted the Anwar administration to lean more heavily on the fund to spur the economy with a controversial proposal to increase the size of its domestic investments to 70% this year from 64% at the end of 2022.
EPF officials, who spoke on condition of anonymity, said the six-percentage point increase will be challenging to fulfil.
Source: Borneo Bulletin
THE PHILIPPINES
President Ferdinand Marcos Jr. said the government is finding ways to make the pension system for the Armed Forces of the Philippines and the Philippine National Police “self-sustaining” as the fund could be depleted in half a decade.
“We are still in the midst of putting together the pension plans,” Marcos Jr. told reporters here in a chance interview.
Source: ABS CBN
The Social Security System (SSS) has tapped BPI Wealth, the asset and wealth management arm of the Bank of the Philippine Islands, to manage P2.5 billion ($44.6 million) in investment funds after a rigorous four-month bidding process.
In a statement, SSS expressed confidence that BPI Wealth was the right partner in managing the pension fund's investment portfolio given a track record of success and commitment to excellence.
Source: Manila Times
TAIWAN
Public Service Pension Fund selected two local and two foreign firms to manage its new domestic equity mandate that is worth a total of NT$12 billion ($391.8 million), the pension fund announced on May 21.
They are the Taiwan units of HSBC Asset Management and Nomura Asset Management; Cathay Securities Investment Trust and Fubon Asset Management.
They will each manage NT$3 billion for a five-year term.
“We aim to achieve the objectives of risk diversification, professional management, and yield enhancement through the operation of professional asset management companies,” the pension fund said.
Source: Bureau of Public Service Pension Fund
REST OF THE WORLD
US pension fund Los Angeles City Employees’ Retirement System (LACERS) has committed $50 million in total to two funds managed by venture capital firm GGV Capital, according to the minutes of its recent board meeting on May 23.
LACERS has committed $40 million to GGV Capital IX, the firm’s flagship fund which focuses on multi-stage venture capital investments in the social/internet, enterprise technology, and smart technology market segments located primarily in the United States and China.
The pension fund also committed an additional $10 million to GGV Capital IX Plus which will make follow-on investments in companies backed by the flagship fund.
GGV is an existing general partner relationship for LACERS, with the pension fund previously committing $16 million to GGV Capital VIII and $4 million to GGV Capital VIII Plus in 2021.
Source: LACERS