Weekly investors roundup: CIC reshuffles PE, infra; Cathay Life increases PE

TOP NEWS OF THE WEEK

Cathay Life Insurance has agreed to commit $50 million to Silver Lake Partners VII and $30 million to Platinum Equity Capital Partners VI.

Recent data showed that the Taiwanese life insurer’s recent private equity commitments have focused on the buyout strategy.

Source: Private Equity International

China’s sovereign wealth fund is merging a unit overseeing billions of dollars in private equity and infrastructure investments into its main operations, according to people familiar with the matter, seeking to boost efficiency after a talent exodus and as offshore investing grows more complex.

China Investment Corporation, which oversees $1.2 trillion in assets, recently combined the operations of CIC Capital with its main overseas investment business, the people said, asking not to be named because the matter is private. The consolidation partly unwinds the Beijing-based fund’s 2015 decision to create the unit as its direct investment arm to boost long-term returns and help Chinese companies expand abroad.

Source: Bloomberg

FairVine Super, a sub-plan of Aracon Super known for its product designed specifically for women, has shut down after three years in the market.

The super was launched in May 2019 and has now been shuttered by its responsible entity Equity Trustees, which cited "commercial and regulatory developments that impact the future sustainability of the fund" as well as the best financial interests of its members.

The Financial Standard reported that the fund struggled to gain scale, with just 197 members and $7.6 million in funds under management when it was closed on May 31.

Source: Financial Standard

Chinese ownership of Sino-Korea Life Insurance, a decade-old joint venture between South Korea’s Hanwha Life Insurance and China’s Orient Financial Holdings Group, will jump to 75 percent after five state-backed firms make strategic investments in the insurer.

The firms -- Changxing Financial Holdings Group, Wenzhou State-owned Financial Capital Management, Wenzhou Electric Power Investment, Wenzhou Transportation Development Group, and Guotai Junan Zhengyu Investments -- will take a combined 41.7 percent stake in Sino-Korea Life, Orient Financial said in a statement on July 22.

Once the new investors buy into Sino-Korea Life, the Hangzhou-based insurer’s paid-in capital will double to CNY3 billion ($444.1 million), and the stakes of Orient Financial and Hanwha Life, which now own half each, will drop to 33.3 percent and 25 percent, respectively.

Source: Yicai Global

MORE INVESTMENT NEWS:

AUSTRALIA:

AvSuper reposted a -4.14% return on its default option for the financial year that ended on June 30, citing a “tough environment for investment returns with a combination of high inflation, high interest rates and volatile equity markets”.

International shares were hit by market turbulence, while bond markets were affected by rising inflation, the super fund said.

In the previous financial year, the fund was ranked as underperforming in the regulator’s annual performance test. It reported a 20.6% one-year return for FY 2021.

Source: AVSuper

CHINA

UBS Group AG plans to set up a wholly owned mutual fund business in China, two people with direct knowledge of the matter told Reuters, as the Swiss bank seeks to expand its footprint in the country's $3.9 trillion retail fund market.

UBS aims to launch the China fund unit in about two years, the people said. The bank's asset management arm began hiring key personnel in recent months for the planned business, including a head of the company, one of them said.

Strong impetus for the endeavour comes from the top. Ralph Hamers, UBS chief executive since November 2020, is willing to make new bets in China partly due to a success there enjoyed by the bank he previously ran, ING, said the second source.

Source: Reuters

INDIA

Online travel app Ixigo has raised $53 million from investors in a round led by Singapore sovereign wealth fund GIC, ahead of its proposed initial public offering.

Ixigo is looking at a valuation of $750 to $ 800 million for its IPO scheduled for the fourth quarter of this year,  a person with knowledge of the development told the Economic Times of India.

The latest funding round also saw participation from investors such as Infoedge Venture Funds, White Oak, Bay Capital, Orios VenturePartners, Trifecta Capital and Malabar Investments, according to regulatory filings.

GIC is the world's sixth-largest sovereign wealth fund with $440 billion in assets under management. It has been reported that GIC plans to start an India-focused long only equities fund and will allocate $3 billion to the endeavor. A source not identified by the Economic Times has alleged that GIC made the investment into Ixigo’s pre-IPO round leveraging this new fund.

Source: Economic Times India

JAPAN

Meiji Yasuda Life Insurance is ready to buy U.S. Treasuries at a yield of 3% without currency hedging if the dollar falls below ¥135.

Yoshimasa Osaki, head of investment planning at one of Japan's largest private life insurers, said foreign-currency bonds with a yield of 3% or more look attractive when Japanese government bond (JGB) yields are so low.

Osaki pointed out that Meiji Yasuda is not in a hurry to buy JGBs though it expects their yields to edge higher towards March, the end of this fiscal year, and April, when the Bank of Japan Governor Haruhiko Kuroda's term expires.

Source: Reuters

KOREA

South Korea’s National Pension Service (NPS) said on July 28 that its rising overseas investment was not a main driver of the won’s recent weakening.

“The fund is applying a strategic FX hedging strategy when the foreign exchange rate stands above a certain level,” the National Pension Service said in a statement while responding to local media reports blaming it for the won’s fall. The pension fund’s investments in overseas equities and bonds require it to sell Korean won for foreign currency.

The statement came after an official from the Ministry of Economy and Finance said on July 19 that the ministry, along with the Bank of Korea, has recently suggested that the NPS take measures to hedge against foreign exchange risk, given its growing influence in the foreign exchange market. Such a move could lead to the NPS giving up possible forex gains from the foreign exchange rate fluctuations.

Source: Reuters

PHILIPPINES

The state-run Government Service Insurance System (GSIS) has committed to oversee the proposed new pension system for military and uniformed personnel, as long as it receives fresh funds that cannot be commingled with the current fund it manages.

Also, GSIS president and general manager Wick Veloso on Friday said the Marcos administration’s plan to “rightsize” the bureaucracy would affect GSIS’ collections.

According to the GSIS, “a separate and independent entity must administer and manage military and uniformed personnel’s pension and benefits… [but] if the GSIS will be the fund manager and benefit administrator, the entire pension system (without any exemption), including the administration of [their] benefits and management of the trust fund, should be under the GSIS.”

Source: Phillippine Inquirer

SINGAPORE

Temasek has doubled down on an agriculture strategy involving ambitious investments - including efforts that take control of some businesses - to try and reap profits from solving some of the biggest problems in food production.

Since 2015 it has quietly grown its life science and agriculture holdings from about $5.7 billion (S$7.9 billion) to $26.7 billion as at March this year, spanning everything from plant-based meat maker Impossible Foods and Bayer to Israeli irrigation firms.

Source: Bloomberg

Insignia Ventures Partners has raised $516 million for its third venture fund, IVPF III, an Entrepreneurs’ pool and an Annex Fund I in an oversubscribed fund close.

The $28 million Entrepreneur’s pool comprised investments from family offices of technology companies’ founders who seek to channel support and resources between investors and portfolio companies. The mandate for Annex Fund I is to provide follow-on investments in Insignia Ventures’ portfolio companies.

Insignia Ventures‘ portfolio includes second-hand car marketplace. Carro, Indonesian digital investment platform, Ajaib and unicorn GoTo among others. Insignia's portfolio enterprise value is over $46 billion on $304.9 million of invested capital, with a loss ratio of less than 2%  and attracted $7.7 billion in follow-on funding.

Source: The Business Times

TAIWAN

UG Investment, one of the oldest hedge funds specialising in Chinese markets, is planning to open its first office outside greater China to step up investment in south-east Asia, in a move that would help it guard against the risks from any conflict between China and Taiwan.

The fund, which manages assets of about $4 billion, will open an office in Singapore, according to three people with knowledge of the details. It launched in 1998 and currently operates from Taipei and Shanghai.

Source: Financial Times

Taiwan’s onshore fund assets have surpassed offshore rivals, driven by investor demand for funds that tap into the local equity market, marking a striking shift in a mutual fund market where investors used to favour foreign funds, according to Julian Liu, the new head of the local asset management industry group.

Figures from the Securities Investment Trust and Consulting Association (SITCA) show that onshore funds had NT$4.68 trillion ($156.2 billion) of total assets as of June 2022 versus NT$3.3 trillion for offshore funds.

Source: Asia Asset Management