Weekly investor roundup: Temasek leads $200 million round for digital assets firm; Hong Kong budget 2022-23

TOP NEWS OF THE WEEK:

A consortium led by Singapore’s Temasek Holdings has raised a $200 million Series B+ round for Amber Group, a leading global digital asset platform.

The other investors include Amber’s existing shareholders Sequoia China, Pantera Capital, Tiger Global Management, Tru Arrow Partners, and Coinbase Ventures among others.

With this current round – the group had raised $100 million in an earlier Series B round last year – the company is now valued at $3 billion. The total capital raised stands at $328 million.

Founded in 2017, the Singapore-headquartered company is one of the world's leading liquidity providers, offering clients services that include algorithmic execution, electronic and OTC market-making derivatives, structured products, and advisory services.

Source: Amber Group

Hong Kong released its budget for the fiscal year starting in April, which forecasted GDP growth at 2-3.5% and headline inflation at 2.1%.

Finance minister Paul Chan also said that more flexibility is being explored for Greater China companies seeking secondary listing in Hong Kong and that the Securities and Futures Commission is reviewing listing requirements for advanced technology enterprises.

Enhanced measures for the wealth management connect scheme are also in the works, and the ETF-connect programme will “start soon”, according to Chan.

The city will also issue $4.5 billion of green bonds and HK$15 billion ($1.92 billion) of inflation-linked bonds.

Economic activities particularly in consumption-related sectors are expected to face continued pressure even as consumer vouchers were issued to residents.

Source: Reuters

Future Fund, the sovereign wealth fund of Australia, has implemented sanctions imposed by Australia, the United States and the European Union.

The fund holds 0.1% of its assets under management worth around $200 million in companies listed on the Russian sovereign debt or other fixed income.

“We will be winding down the remaining exposure (which is not currently subject to divestment sanctions) as market conditions permit,” the fund wrote in a statement.

Source: Future Fund

MORE INVESTMENT NEWS:

AUSTRALIA

QSuper and Sunsuper have officially completed their merger to become the A$230 billion ($167 billion) Australian Retirement Trust, the country’s second largest superannuation fund after Australian Super.

As part of the benefits of being a larger fund, the firm plans to reduce fees for members starting with the weekly administration fees in July.

The fund will work on fully integrating the investment portfolios and technology platforms over the next two years, it said in a statement.

 Source: Australian Retirement Trust

BRUNEI

Brunei’s Sultan Hassanal Bolkiah says the government will make reforms to the country’s pension scheme from next year to boost retirement savings.

He did not give details but said the revised scheme would include “changes to the system and its dissemination.” He was speaking at the opening ceremony of the legislative council last Thursday in his capacity as head of state.

The amended scheme is a follow-up to the Ministry of Finance and Economy’s (MoFE) study on raising the dividends of Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP) as the current rates are insufficient to support retirees.

Employers currently contribute 5% and 3.5% of workers’ wages to TAP and SCP, respectively.

Source: The Scoop

CHINA

China will expand its pilot scheme for pension wealth management products to six more cities since March 1 - Beijing, Shenyang, Changchun, Shanghai, Guangzhou and Chongqing – in addition to existing Wuhan, Chengdu, Shenzhen and Qingdao, the China Banking and Insurance Regulatory Commission said on Friday.

Meanwhile, six more financial institutions will be allowed to participate in the programme to provide pension products, bringing the total number of pilot pension wealth management companies to 10. They are all wealth management arms of major Chinese banks.

The regulator will also raise the funding cap from the current 10 billion yuan ($1.6 billion) to 50 billion yuan for the four financial institutions already permitted to participate. For the six newly added wealth management companies, the funding cap will be 10 billion yuan.

Source: China Banking and Insurance Regulatory Commission

HONG KONG

AIA Group announced on Feb 24 that its wholly-owned subsidiary AIA Australia will sell its Australian savings and investments business to Resolution Life Australasia. The transaction is subject to regulatory approval.

The business comprises an in-force portfolio of superannuation, retirement and investment products with more than A8 billion ($5.8 billion) of funds under administration but predominantly closed to new business. The portfolio is a constituent part of the life insurance businesses that transferred to AIA Australia following the acquisition of The Colonial Mutual Life Assurance Society from the  Commonwealth Bank of Australia (CBA).

Following a review of the overall portfolio in Australia, AIA concluded that the business is non-core to AIA’s strategy to be the leading life, health and wellness provider in Australia and does not meet AIA’s financial criteria, it said.

Source: AIA

INDONESIA

The pension fund industry in Indonesia grew 4.04% in 2021 from the previous year due to profits from bond investments which offset equity losses.

The industry ended the year with 327.39 trillion rupiah ($22.9 billion) of total assets, up from 314.67 trillion rupiah in 2020, according to the latest figures published by the Financial Services Authority of Indonesia.

Bond assets rose 11.32% to 92.61 trillion rupiah while equity assets fell 4.51% to 30.69 trillion rupiah even though the benchmark Jakarta Composite Index rose 8% year-on-year in 2021.

The decline in equity assets was probably due to large investors such as pension funds stepping up allocations to bonds, and the weak performance of Asian stock markets, according to a local fund manager. Pension funds are expected to increase exposure to bonds amid expectations of rate hikes this year to fight inflation.

Source: Asia Asset Management

INTERNATIONAL

Caisse de dépôt et placement du Québec (CDPQ) presented its financial results for the year ended December 31, 2021. The Canadian pension fund posted a 13.5% return in 2021, according to the release on February 24.  

The weighted-average return on its depositors’ funds was 13.5% in 2021, compared with 10.7% for the benchmark portfolio, representing $10.4 billion in value added. The annualized returns over five and ten years were 8.9% and 9.6%, respectively, also outperforming the benchmark portfolio.

As of December 31, 2021, CDPQ’s net assets were $419.8 billion, up $149.1 billion over five years, with investment results of $141.0 billion and net deposits of $8.1 billion. Over ten years, investment results were $241.0 billion and net deposits were $19.8 billion.

Source: CDPQ

The Washington State Investment Board (WSIB) has committed around $238 million to the latest investment vehicle of Australia’s Laguna Bay — Laguna Bay Fund 2, an agriculture fund that is seeking to raise around $540 million

The $156 billion US pension fund’s latest commitment follows a $180 million commitment it made in 2015 to Laguna Bay’s first fund.

The pension fund’s latest commitment was placed into its tangible assets portfolio, an $8.6 billion portfolio focused mainly on agriculture, minerals/mining and energy investment opportunities.

Source: Deal Street Asia

Qatar Investment Authority (QIA) has agreed to acquire a minority interest in AIT, the world’s largest provider of factory automation to the aerospace, defense, and space launch sectors. The transaction is expected to close in 2022, subject to regulatory conditions and approvals.

QIA, the sovereign wealth fund of the State of Qatar, will acquire its interest in AIT through a combination of primary capital and partial sales by the company’s two existing shareholders, AIT’s founding management team and Onex Partners IV. Following the transaction, all three parties will assume minority joint ownership of the company according to an official statement on February 22.

Source: QIA

JAPAN

Government Pension Investment Fund (GPIF) held Russian assets worth about 220 billion yen ($1.9 billion) as of March last year, a spokesperson said on Monday, representing 0.1% of the total assets of the world's largest pension fund.

The $1.7 trillion pension fund's Russian assets consisted of about 170 billion yen's worth of shares in companies such as Russia's largest lender Sberbank, as well as about 50 billion yen's worth of government and corporate bonds.

It said regulations do not allow it to make investment decisions based on political reasons, but it will continue to monitor the situation and work for the benefit of pension recipients.

Source: Reuters

Pension Fund Association for Local Government Officials, known locally as Chikyoren, has hired local property manager TLC REIT Management Inc. for a domestic real estate mandate of unspecified value.

The pension fund has also appointed Mizuho Trust and Banking to provide investment services for the mandate, it says in a brief statement on February 21. It did not say when the tender was opened.

This is Chikyoren’s third domestic real estate mandate in less than a year. One mandate was awarded to Mitsui Fudosan Investment Advisors last June and the other to Singapore-based investment firm GLP in July.

Source: Asia Asset Management

KOREA

National Pension Service (NPS), the world’s third-largest pension fund, recorded 10.77% of return for 2021, led by global equity and alternative investment, pushing total assets to W948.7 trillion ($788.8 billion), the fund disclosed on Feb 25.

This is the second-highest return since NPS’s inception in 1999, following the 11.3% return in 2019. By asset class, global equity returned 29.5%, alternative assets returned 23.8% - a rather high result considering its relatively small portion in allocation at 12.6%.

Domestic equity gained 6.7% in 2021, foreign bonds returned 7.1%, while Korean bonds lost 1.3%.

Source: NPS

Korea Investment Corporation (KIC) signed an agreement with Seoul Guarantee Insurance Company (SGI) to co-invest in overseas hedge funds, KIC said on Feb 24. Under the agreement, SGI and Korea’s Tongyang Life Insurance will jointly invest $20 million in KIC’s $300 million joint venture.

The JV was established by KIC, Korea’s National Agricultural Cooperative Federation (NongHyup) and the National Federation of Fisheries Cooperatives (Suhyup) last November. KIC, NongHyup and Suhyup have invested $150 million, $100 million and $50 million respectively in the JV.

Source: KIC

National Pension Service (NPS) hired Allspring Global Investments, BlackRock and Morgan Stanley Investment Management in the fourth quarter of 2021 as its first multi-asset investment management firms, it said on Monday.

NPS said it has deployed a combined $1.5 billion of capital, $500 million to each investment firm. It conducted an initial evaluation for some overseas multi-asset investment firms during the first half of 2021 before finalising the three investment firms. The multi-asset investment strategy is a preparatory stage for introducing tactical asset allocation overlay strategy, it said.

Source: NPS

KB Asset Management has formed a digital asset management committee to prepare for the rapid launch of products such as fund of funds that invest in cryptocurrency when the market is opened up.

The digital asset committee will conduct market research and develop artificial intelligence-based investment strategies for virtual assets. It’s operated as a task force led by the index/quant investment division and comprises team heads from other divisions as well, including product, compliance, risk and strategy.

“Considering how major countries have moved quickly to adopt digital assets, KB Asset Management aims to launch virtual asset products swiftly as soon as deregulation in the Korean cryptocurrency market takes place,” the company says in a statement on February 21.

Source: Asia Asset Management

MALAYSIA

Ex-Goldman Sachs banker Tim Leissner said he stole tens of millions of dollars from his accomplices on top of the hundreds of millions he defrauded from the Malaysian sovereign wealth fund 1MDB.

Leissner, the key witness in the bribery trial of his former colleague Roger Ng, testified last Thursday that “a large portion” of the $6.5 billion raised through three 1MDB bond deals he helped organise with Ng was siphoned off to pay kickbacks and bribes to officials in Malaysia and Abu Dhabi.

He told the US court that he kept $80 million of the stash fund of about $162 million given to him by Malaysian financier Low Taek Jho, the alleged architect of the massive fraud, to set up a shell company in Mauritius.

Source: Daily Express

PHILIPPINES

The Philippines’ state-owned Government Service Insurance System (GSIS) is looking to hire 10 equity managers for a mandate valued at up to 10 billion pesos ($195 million) for the domestic equity market.

The state pension fund for civil servants said the final size of the mandate will be based on the historical performance and investment capabilities of applicants.

Applicants must have a minimum of 10 billion pesos of assets under management as of end-2021, at least five billion pesos in assets, and a ten-year track record in equity fund management. More details can be found on its website.

GSIS had 1.44 trillion pesos of assets under management as of end-2020.

Source: Asia Asset Management

SINGAPORE

The Tanglin Shopping Centre in Singapore has been bought over by Pacific Eagle Real Estate (PER), a locally based real estate investor and developer owned by Indonesia’s Tanoto family.

The deal was closed at S$868 million ($641 million) or S$2,769 ($2,046) per square foot per plot ratio (psf ppr), according to Savills Singapore, the exclusive marketing agent.

The price is about 10% above the reserve price for the mixed retail and office property. The deal is subject to the Strata Titles Board's approval.

PER director Sun You Ning said: "Tanglin Shopping Centre is one of Singapore's earliest retail landmarks and occupies a prominent location next to the St Regis Hotel in the Orchard Road enclave. Pacific Eagle Real Estate is honoured to have the opportunity to create an iconic development befitting the property's heritage and its frontage along one of our island's most important streets."

Source: Business Times

TAIWAN

The exposure of Taiwanese banks, insurers and securities firms to the Ukrainian and Russian markets totalled around NT$218 billion ($7.74 billion) as of the end of January 2022, the Financial Supervisory Commission (FSC) has announced.

The exposure of the three sectors to Russia and Ukraine fell about NT$10 billion to NT$217.91 billion on January 31 2022, compared to the end of December 2021, the FSC said on February 25.

Source: Asia Insurance Review

China Life Insurance Company (Taiwan) has confirmed a $35 million commitment to TPG Real Estate Partners IV.

The Taiwanese insurer’s recent real estate commitments have concentrated on the opportunistic sector, with a focus on North America, Asia Pacific and Europe.

Source: PERE