Weekly investor roundup: Malaysia's EPF and Kwap raise Bursa Malaysia stakes; Japan's endowment fund struggles to hire
TOP NEWS OF THE WEEK
Singapore’s sovereign wealth fund GIC has bought a 40% stake in Oxford Science Park for more than 10 times the amount it was worth five years ago.
The fund acquired the stake for £160 million ($218 million), which implies a valuation of more than £400 million for the park. This compares with the £18.1 million that Magdalen College paid for a 50% stake in 2016, which implied a valuation of £36.2 million.
Investors have been increasing allocation to commercial real estate amid a murkier outlook for the rest of the sector such as retail.
Source: The Financial Times
Hong Kong’s government unveiled measures to improve the Mandatory Provident Fund (MPF), including eliminating a scheme that lets employers offset severance payments from their contributions to the city’s largest retirement plan.
Chief executive Carrie Lam announced the plans in an annual policy address in the city’s legislature on October 6. She said a bill to scrap the MPF’s offsetting arrangement will be introduced in the 2022 legislative year that begins in January.
In addition, she said the government will explore ways to encourage the public to withdraw their MPF money on a regular basis rather than in a lump sum so that seniors can enjoy a steady income through their retirement years. But she provided no details.
She also said the government will facilitate MPF investments in China’s government and policy bonds, again without offering details.
Meanwhile, Lam said the government will fully support implementation of the eMPF, an electronic platform that aims to standardise and streamline administration for over 4.5 million MPF members. The platform is scheduled to be introduced in 2023 and become fully operational by 2025.
The MPF had HK$1.22 trillion ($156.4 billion) of assets as of June 2021.
Source: Asia Asset Management
Malaysia’s Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) have increased their stakes in Bursa Malaysia as its share price hits lows.
EPF has been purchasing Bursa shares since September, acquiring 3.81 million shares between September 15 and 30; 200,000 shares on October 1, and a further 17,200 shares on October 4. This brings its direct holdings to 7.93%.
Kwap acquired 48,000 shares between September 6 and 9, and 16,000 shares on October 6, bringing its direct interest to 11.21%.
Source: The Edge Markets
With just months to go before its launch, Japan’s university endowment fund, the world’s biggest with $90 billion of capital, has managed to hire only one fund manager - its chief investment officer Masakazu Kita.
The fund struggles to attract top investment management talent given its low remuneration levels, Kita said.
The fund was announced in March and was established in an attempt to make Japanese scientific research globally competitive. The fund will be seeded with ¥4.5 trillion ($39.75 billion) of state financing, which is expected to expand to ¥10 trillion, and the fund is mandated to deliver an annual payout ratio of 3%.
Source: Financial Times
Thailand and China’s securities regulators agreed at a meeting of top officials to look into the possibility of cross-border initiatives between their capital markets.
Participants of the virtual meeting on October 7 included Ruenvadee Suwanmongkol, secretary-general of Thailand’s Securities and Exchange Commission (SEC) and China Securities Regulatory Commission Vice Chairman Fang Xingha.
“The regulators came to a mutual decision to further explore ways for development and implementation of connectivity initiatives between both capital markets,” the SEC says a statement dated October 7 posted on its website.
“Both parties also discussed and exchanged regulatory views on the developments and challenges related to supervision of innovative finance and digital assets in capital market as well as SMEs’ and startups’ capital market access to funding sources,” it adds.
Source: Asia Asset Management
MORE INVESTMENT NEWS:
AUSTRALIA
The merger between EISS Super and TWUSuper has been put on hold after accusations of the fund’s misuse of funds, including luxury cars for employees and the sponsorship of entities linked to its former chief executive, were revealed.
Chief executive Alex Hutchison has since stepped down from the fund, alongside chairman Warren Mundy and directors Juliet Dunworth, Thomas Costa and Mike Roche.
The fund was also revealed to have one of the 13 worst-performing MySuper default funds in Australia last month.
Source: Australian Financial Review; Sydney Morning Herald
Aware Super, along with Dutch pension fund APG and apartment hotel group City ID, have acquired a development site in central London.
The property will feature 116 generous apartments (studios, 1 bedroom and 2 bedrooms), a flexible workspace, a seasonal restaurant and bar with low volume conscious supplies, as well as a gym and wellness areas.
Source: Aware Super
JAPAN
Japan’s Pension Fund Association for Local Government Officials, locally known as Chikyoren, has hired US asset manager PGIM for its third overseas real estate mandate this year.
Chikyoren, Japan’s second-largest pension fund, did not specify the value of the mandate in a brief statement released on Oct 1. PGIM Japan will be the local operator of the mandate.
Source: Chikyoren; Asia Asset Management
KOREA
National Pension Service (NPS) is expanding its massive recruitment and training program called the NPS WING’s Program, with eight more full-time positions announced on October 8.
The openings include one person each for domestic stocks and overseas bonds management, two positions for asset allocation strategies, and one for trustee responsibilities including responsible investing, among others like risk management and legal affairs.
The recruiting process has started on October 8. Final results will be announced in mid-December.
Source: NPS
Korea Investment Corporation (KIC) pledged to further support the Task Force on Climate-related Disclosures (TCFD) recommendations as a universal standard, to fill the gap in improving the quality of climate and environment-related financial information.
Chief Executive Officer Jin Seoung-ho made the remarks during the 4th Annual One Planet Sovereign Wealth Funds (OPSWF) CEO Summit, chaired by French President Emmanuel Macron and attended by leaders from sovereign wealth funds, asset managers and private investment firms.
Source: KIC
Samsung Asset Management has launched Korea’s first carbon-based exchange-traded fund (ETF), the KODEX Europe Carbon Allowance Futures ICE(H) ETF, with Intercontinental Exchange’s ICE EUA Carbon Futures Index as the underlying index.
The ICE EUA Carbon Futures Index measures the performance of a long-only basket of euro-denominated ICE EUA Futures Contracts. The new ETF is designed to allow Korean and global investors to participate in carbon futures markets more efficiently, according to an announcement on Sept 29.
Source: Intercontinental Exchange
Korea Post has opened a tender for a 100 billion won ($83.7 million) domestic logistics and real estate blind pool fund structured as a commingled fund or separately managed account.
The fund will focus on assets related to Korean logistics facilities, including real estate investment trusts and collective investment schemes, according to its request for proposal issued on October 5.
The fund has an investment period of eight years and a targeted internal rate of return of over 4%.
Source: Korea Post; Asia Asset Management
INTERNATIONAL
US-based insurer Chubb is acquiring rival certain Cigna operations for a cash consideration worth $5.75 billion, expanding its Asia Pacific presence.
Being snapped up are the life and non-life insurance companies that house Cigna’s personal accident, supplemental health, and life insurance business in seven Asia Pacific markets. The transaction spans the insurer’s accident and health (A&H) and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia, as well as its interest in a joint venture in Turkey.
Evan G. Greenberg, Chubb chair and chief executive, stated: “The addition of Cigna’s business, which is overwhelmingly A&H, will further balance our global portfolio toward this important region. We have long admired and respected Cigna’s business in Asia including its talented people, innovative products, technical and analytical capabilities, distribution, and management.
The purchase is expected to be completed in 2022.
Source: Insurance Asia
MALAYSIA
An integrated dairy firm 30%-owned by sovereign wealth fund Khazanah Nasional has filed a draft prospectus for a public listing on Bursa Malaysia’s main market.
Farm Fresh would involve the sale of 743.18 million shares, of which 687.44 million would be offered to Malaysian and foreign institutional and approved investors.
Khazanah owns 30% of the firm through its investment vehicle Agrifood Resources Holdings. Other shareholders include Rainforest Capital, which owns 46.67% of the firm, and Farmchoice Foods which owns 23.33%.
Source: The Edge Markets
SINGAPORE
GIC and the Abu Dhabi Investment Authority are looking to participate in the bidding process for Alibaba-backed Paytm’s IPO.
India-based Paytm is seeking a valuation of $20 billion to $22 billion, and is waiting for the market regulator to approve its listing.
Source: Tech in Asia
Temasek has led a $550 million funding round for cloud security firm Orca Security in its extended Series C funding round.
Other investors included SAIC, the venture arm of Splunk Inc, Stripes, and Adams Street Partners.
The latest funding brings the firm’s valuation of $1.8 billion, compared with a $1.2 billion valuation in March. Orca Security’s business has grown nine-fold from a year ago as remote working has driven a rise in demand for its products and services.
Source: Reuters, Business Times
Cashback startup ShopBack has raised $40 million from investors including Temasek and the investment arm of the Singapore Economic Development Board.
The latest fundraising brings the total amount the Singapore startup has raised to $145 million.
Source: Vulcan Post