Weekly investor roundup: Japan's GPIF 3Q results hit $47bn on foreign stocks; Australia's Future Fund demolishes 2021 targets
TOP NEWS OF THE WEEK
Japan’s Government Pension Investment Fund (GPIF) has posted a third-quarter investment return of $47.29 billion (5.437 trillion yen) on gains from overseas stocks, according to Reuters.
GPIF is the world’s largest pension fund, with over $1.74 trillion in assets under management as of the end of December and its return on overall assets was 2.81% over the three month period, it said in a statement.
The fund’s foreign stock portfolio achieved a return of 10.54%, while the Japanese stock portfolio had a loss of 1.62%.
With domestic interest rates exceptionally low, the pension fund has reportedly been shifting its portfolio away from domestic bonds towards higher-yielding foreign assets.
Source: Reuters
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AUSTRALIA
Australia’s Future Fund earned more than twice its target annual investment return in 2021 to end of the year with a record A$252 billion (US$180.12 billion) of assets under management, but forecast lower future returns, warning that rising inflation and interest rates are the biggest immediate challenges.
The sovereign wealth fund’s investment return jumped to 19.1% last year from 1.7% in 2020, handily beating its 7.5% annual target.
As a result, assets breached the A$200 billion mark for the first time since the fund was established in 2006, Future Fund said in a statement on February 1.
Source: Future Fund
CHINA
Troubled bad asset manager China Huarong Asset Management continued to raise new funds, this time through the sale of its majority stake in its securities brokerage unit.
Huarong has agreed to sell a 72% stake in Huarong Securities to state-owned investment firm China Reform Holdings, according to a regulatory filing.
Following the sale, Huarong will no longer own any interest in the securities brokerage unit.
Source: finews.asia
INTERNATIONAL
German asset manager Allianz Global Investors has formed a dedicated private markets impact unit within its sustainable investment platform to “push the boundaries of sustainability for clients”.
The unit comprises 12 people from existing equity and debt investment teams, and is overseen by Matt Christensen, global head of sustainable and impact investing, according to a statement on January 27.
Impact investing refers to investments in enterprises that generate social and environmental impact, in addition to financial returns.
The company has also set up an impact measurement and management team, which aims to introduce a framework to facilitate due diligence and selection of investments that contribute to positive impact.
Source: Allianz Global Investors
Private equity firm Blackstone secured a $100 million commitment for its third Asia property fund from Florida’s State Board of Administration in the fourth quarter of 2021 as part of nearly $2.4 billion in new commitments to the vehicle during the period.
Florida’s State Board of Administration, which predominantly manages the assets of the Florida Retirement System revealed the commitment to Blackstone Real Estate Partners Asia III in a quarterly update made available online.
Launched last year, BREP Asia III had raised $6.38 billion in capital commitments as of December 31, 2021.
Source: Florida’s State Board of Administration
The San Francisco City and County Employee’s Retirement System (SFERS) has made a commitment of around $50 million to China-focused healthcare fund LYFE Capital Fund IV.
As of January 31, the US pension fund’s actual allocation to private equity was 30.5% of its over $27 billion in AUM.
Lyfe Capital Fund IV is a venture capital fund managed by Lyfe Capital. The fund is located in Shanghai, China.
Source: Deal Street Asia
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has invested around $833 million (1 trillion won) in South Korean game publisher Nexon Co.
The PIF, run by Saudi Arabian Crown Prince Mohammed bin Salman, became Nexon’s fourth-largest shareholder and - banking on Nexon's upcoming games and business potential - has acquired a roughly 5% stake for US$883 million, according to reports.
The sovereign wealth fund also acquired a 5% stake in Japanese games developer Capcom for $332 million.
Source: Bloomberg
INDIA
HSBC Insurance Asia Pacific Holdings (INAH) has announced plans to expand its stake in Indian insurer Canara HSBC OBC Life Insurance by acquiring Punjab National Bank’s stake.
“The bank has received a communication from [INAH], one of the shareholders of the company, conveying its intention to acquire the Bank's stake in the company,” PNB said in a regulatory filing.
PNB also said that it will conduct further evaluation on INAH’s proposal. HSBC is continuing its push to expand its insurance operations in Asia due to strong growth in the region.
State-owned bank PNB obtained a stake in the life insurer through its acquisition of Oriental Bank of Commerce (OBC) in 2020, Business Standard reported. OBC held 23% of the insurer’s shares, while Canara Bank owns 51%. Foreign partner INAH holds 26%.
Source: Insurance Business Asia
KOREA
Korea Development Bank is looking to hire an asset manager for a 150 billion won (US$123 million) mandate structured as a 25-year parent fund that will invest in infrastructure and small and medium-size enterprise sub-funds.
The parent fund will invest for five years in up to six sub-funds that focus on new deals in the infrastructure and SME space, Korea Development Bank says in a request for proposal published on the website of the Korea Financial Investment Association on January 28.
The minimum size of the infrastructure investment sub-funds invested by the parent fund will be 300 billion won, while the SME sub-funds must be at least 200 billion won.
The tender is open to local and foreign assets managers.
Source: Asia Asset Management
Korea Post has hired US private equity giant Blackstone Inc. and UK real estate investment firm Tristan Capital Partners for a €200 million (US$228.96 million) real estate mandate that focuses on developed markets in Europe.
The government postal agency announced the appointment in a statement on February 3, 10 weeks after opening the tender. The investment is structured as an open-ended commingled fund, and adopts core and core-plus strategies.
It was Korea Post’s second real estate tender last year.
The agency appointed Korean firm KDB Infrastructure Investment Asset Management for a 100 billion won ($83.83 million) domestic logistics real estate fund mandate in November.
Korea Post had around 134 trillion won of assets under management as of end-2020.
Source: Asia Asset Management
SINGAPORE
Singapore’s GIC Private Limited is reportedly in talks to acquire around 30 properties in Japan from Seibu Holdings, Inc. in a deal worth about $1.3 billion (150 billion yen).
GIC, a sovereign wealth fund, has been a long-time investor in Japanese real estate.
Some of the properties of interest for GIC include, The Prince Park Tower Tokyo, Prince Hotel Sapporo, and Grand Prince Hotel Hiroshima. Seibu Holdings will continue to run the properties after the deal.
Source: SWFI
THAILAND
Thailand’s Government Pension Fund (GPF) is eyeing equity investments in China and India, with a particular focus on regions where a new technology environment will provide potentially high returns.
The $33 billion Thai state fund is looking closely at Chinese producers of microchips and renewable-energy equipment and Indian IT firms and drug makers as the top stock candidates according to GPF’s secretary-general Srikanya Yathip.
GPF’s plan to add more Chinese and Indian stocks will help the fund diversify its equities portfolio which is predominantly allocated to developed regions such as the US and Europe. The move also comes after the fund’s performance was negatively affected by lower gains from debt securities.
Source: Bloomberg