Weekly investor roundup: Huarong to receive $6 billion bailout; APG to invest into HK real estate with Wang On
TOP NEWS OF THE WEEK:
Chinese bad debt manager Huarong will receive a bailout totalling more than $6 billion from a consortium of five state firms.
Huarong will receive new capital totalling Rmb42 billion ($6.6 billion) from a consortium led by Citic Group, according to an exchange filing.
The consortium also includes China Insurance Investment’s Rongxin Fund, China Cinda Asset Management, China Life and a unit of Industrial and Commercial Bank of China (ICBC).
Source: Finews Asia
APG Asset Management (APG) and Wang On Properties Limited announced the establishment of a joint venture company to engage in residential development in Hong Kong on Nov 15.
In the strategic partnership, Wang On Properties and APG will work closely to acquire residential development properties across urban locations in Hong Kong with an initial total commitment of $599 million.
The joint venture company will acquire four seed projects from Wang On Properties including two residential sites in Ap Lei Chau and two residential sites in Wong Tai Sin. The four seed projects have an aggregate gross floor area of approximately 250,300 square feet.
Source: APG
State investment firm Temasek Holdings has sold off a significant portion of its shares in US-listed Chinese technology firms including Alibaba and Didi, and online education providers as the Chinese government cracks down on those sectors.
The firm cut 16% of its stake in Alibaba, and 11% in Didi, while exiting from search engine operator Baidu Inc., TAL Education Group, New Oriental Education & Technology Group Inc. and jobs service provider Kanzhun Ltd entirely.
Source: Bloomberg
Allianz Group has become China’s first wholly foreign-owned insurer after getting regulatory approval to buy its local partner’s shareholding in their joint venture.
The China Banking and Insurance Regulatory Commission has cleared Allianz’s acquisition of CITIC Trust’s 49% stake in the joint venture, Allianz China Life Insurance, the company says in a statement on November 17.
It did not disclose the purchase price.
Source: Allianz
Samsung Life Insurance said on Monday that it will launch a joint fund with Korea Post to invest 400 billion won ($337 million) in foreign blue chip companies over the next 10 years, expanding cooperation in alternative investments like private equity and real estate.
The country’s top insurer and the state-owned postal firm will make investments under the recommendations of an asset management firm. A Samsung Life Insurance official declined to reveal details about the asset manager.
Source: The Korea Herald
MORE INVESTMENT NEWS:
AUSTRALIA
Superannuation funds in Australia are on track for double digit returns for 2021 as share markets rise.
Median growth funds were up 0.6% in October after dipping in September, according to analytics provider Chant West. Growth funds are already up 11.2% year-to-date.
Chant West senior investment research manager, Mano Mohankumar, told Super Review listed share markets remained the main drivers of growth fund performance.
“Australian shares were virtually flat in October with a return of just 0.1%. International shares were up 5.6% in hedged terms, but the appreciation of the Australian dollar over the month (from US$0.72 to US$0.75) pared that back to 1.7% unhedged,” Mohankumar said.
Source: Super Review
Troubled industry super fund EISS is in advanced talks with Cbus to create a A$70 billion fund after the former has been accused of reckless spending and given a warning from the prudential regulator.
The Australian Prudential Regulation Authority (APRA) has given the A$6 billion fund to merge with a larger fund. EISS was previously in talks for a merger with the A$6 billion transport fund TWUSuper, which fell through in October.
EISS staff were reportedly told there will be job losses and possible re-deployments in the new year, after the deal, described as “more of a takeover than merger”, with Cbus has been finalised.
Source: Sydney Morning Herald
CHINA
China’s top financial regulators have issued draft rules governing the issuance of perpetual bonds by insurers in the world’s second largest insurance market.
The rules, issued by the People's Bank of China and the China Banking and Insurance Regulatory Commission, seek to protect investors and improve the capital replenishment and resilience to risk of insurance firms operating in China. The rules also state that insurance holding firms are prohibited from issuing such perpetual bonds.
Source: Insurance Business Asia; CBIRC
HONG KONG
The Maryland State Retirement and Pension System (MSRPS) has committed $70 million to Hong Kong-based Baring Private Equity Asia’s (BPEA) eighth buyout fund, according to the US pension fund’s recent investment committee meeting.
MSRPS disclosed a total of $1.3 billion in commitments from September and October during the meeting which also included a private equity commitment of $15 million to a co-investment associated with Baring Asia VIII.
Source: Pensions&Investments
INDIA
Canada Pension Plan Investment Board (CPP Investments) and The Phoenix Mills Limited (PML) have announced, on Nov 15, a strategic partnership to develop an office-led mixed-use asset in Lower Parel, Mumbai. The asset forms part of a larger mixed-use development at Phoenix Palladium, Mumbai.
CPP Investments will invest approximately $183 million in tranches, for an ultimate equity stake of 49% in the entity, known as PCREPL, that will own the asset. PCREPL will use the funds to develop office space with a potential leasable area of approximately one million sq. ft. and flagship retail space with a potential leasable area of approximately 0.2 million sq. ft. The target completion date for the development is 2026.
The office-led mixed-use asset will complement the existing retail development at Phoenix Palladium, Mumbai and The St. Regis, Mumbai hotel. This latest joint venture brings CPP Investments’ equity commitment across multiple strategic partnerships with PML to an approximate cumulative value of $561 million.
Source : CPP Investments
JAPAN
Nippon Life Insurance will invest $20 million in TPG Rise Climate, a dedicated climate investing fund managed by TPG, through a fund managed by Nippon Life’s subsidiary Nippon Life Global Investors Americas.
The fund seeks to deliver competitive private equity returns while generating positive environmental and social impact. It is focused on making investments that can achieve measurable reductions in carbon dioxide and contribute to decarbonization.
Source: Nippon Life Insurance
KOREA
Hanwha Life Insurance has established a partnership with Aspiration, a sustainability service solutions provider, to utilise Aspiration’s sustainability financial solutions, ESG consulting services, global reforestation program, and verified carbon offsets.
Aspiration and Hanwha Life will be working together to launch an ESG-centric blockchain ecosystem, backed by their collective experience with high-quality, nature-based carbon credits and renewable energy credits, respectively, to help bring more transparency, scale, and liquidity to the voluntary carbon markets.
Source: Business Wire
Public Officials Benefit Association (Poba) is looking to hire an asset manager for a domestic hedge fund mandate of unspecified value. The manager will be responsible for performance measurement, risk analysis and portfolio construction, Poba said in a request for proposal published on the Korea Financial Investment Association’s website on Nov 17.
Applicants must have at least 50 billion won (US$42.3 million) of hedge fund assets. The tender is open until Nov 30, with evaluation and manager selection scheduled for early January.
Source: Asia Asset Management
Korea’s bond funds received the greatest net outflows during the third quarter ended September, reversing the trend from earlier this year. The Korea bond category, for instance, bled 1.1 trillion won ($927 billion) in the third quarter after a combined 5.7 trillion won of net inflows from the previous two quarters, amid higher inflation concerns.
As a result, in ESG funds, Korea was overtaken by Taiwan by asset size in the Asia ex-Japan region, and is now ranked as the third-largest market with 5 trillion won of assets under management.
Net inflows significantly slowed in the third quarter to just 14.2 billion won, compared to 925.9 billion won in the second quarter and 2.1 trillion won in the first quarter of 2021. This is in line with the broader market trend where fixed income funds had the heaviest outflows.
Source: Morningstar
Kyobo Life Insurance, Korea’s third-largest life insurer, is resuming its push for an initial public offering amid a protracted legal dispute with its major financial investors over their exercise of put option rights.
The company said on Nov 17 (Wednesday) that it will file a review request for its IPO plan with the Korea Exchange by the end of December, with an aim to go public on the main bourse in the first half of next year.
The number of its shares on offer and other detailed procedures will be determined at a later time in consideration of market conditions, it said.
Source: Korea Economic Daily
Korea’s state-run bank Korea Development Bank (KDB) has launched its venture capital (VC) operations in California's Silicon Valley on Nov 16. The new VC, named KDB Silicon Valley LLC, has secured $5 million in capital for its venture growth project.
It will primarily invest in US-based startups founded by Koreans and Korean startups aiming to enter the US market. In addition, it will support US startups that collaborate with Korean conglomerates through business information or strategizing. The VC will also support US enterprises that operate Korea-based offices and hire employees from Korea.
Source: Korea Economic Daily
Korea Scientists and Engineers Mutual-Aid Association (SEMA) has seen growth in new members in recent years, particularly from young members in their 20s to 30s. The Korean retirement pension fund had nearly 99,000 members as of end-October of this year, nearly doubling the 55,000 members in 2016.
The number of members in their 20s and 30s increased from 30,000 in 2019 to 48,000 by end-October 2021. In particular, the proportion of new members in their 20s jumped from 20% in 2019 to 30% in 2021, which contributed to reducing the average age of members from 46 to 44 in the same period.
The increase has been driven by 0.3% higher interest rates provided to members aged 39 or lower.
Source: Korea Economic Daily
MALAYSIA
Sovereign wealth fund Khazanah Nasional’s special purpose vehicle (SPV) Danum Capital has proposed to upsize its RM10 billion Islamic bond or sukuk issuance to RM20 billion.
CIMB Investment Bank, which is facilitating the bond scheme, said that no further consent is required from the sukuk holders, the sukuk trustee or any other party under the Sukuk Danum Programme for the issuer (Danum) to exercise the option to upsize.
Source: The Edge Markets
Kenanga Investors has been appointed fund manager for the Emergency Waqf Fund.
The Emergency Relief Fund will be receiving a portion of the RM10 million allocated in Budget 2022 as part of its initial seed funding, announced in October 2021.
Funds received from institutional investors would be invested directly into a wholesale fund established by Kenanga Investors who will manage and invest it accordingly.
Source: Kenanga Investors
SINGAPORE
Sovereign wealth fund GIC must be prepared for economic uncertainties and climate change, Singapore prime minister Lee Hsien Loong said last Tuesday (Nov 16) at the fund's 40th anniversary dinner
"Since inception, it has generated steady returns on our reserves, with annual returns averaging more than 5 per cent above global inflation and this has significantly grown the international purchasing power of our reserves," he said.
Future challenges that GIC must navigate include economic uncertainties such as the impact of prolonged low interest rates and record fiscal deficits, inflation, and climate change.
Source: The Straits Times
Temasek is ramping up investments into agriculture tech as Singapore continues its pursuit of producing 30% of its food by 2030.
The state investment company has invested over $8 billion in the sector, with life-science and agribusiness investments making up 10% of Temasek’s portfolio, according to Anuj Maheshwari, managing director of its agribusiness unit.
Last week, Glife Technologies, a food and agritech company, announced that Heliconia Capital, a wholly owned investment subsidiary of Temasek Holdings had led a Series A funding round.
Other investors include Hibiscus Fund, a venture capital fund managed by Malaysia’s RHL Ventures and South Korea’s KB Investment, as part of the Dana Penjana Nasional (DPN) Programme by the Malaysian government.
Source: The Financial Times, Glife