Weekly investors roundup: Five Australian supers fail performance test; Singapore's GIC invests in India space-tech; Korea's NPS gets new CEO
TOP NEWS OF THE WEEK
The Australian Prudential Regulation Authority (APRA) published the results of the second MySuper performance test. Five products failed to meet the benchmark this year, including four that failed for the second time.
APRA assessed 69 MySuper products with at least five years of performance history against an objective benchmark that assesses two components: investment performance, and fees and costs.
The product that failed this year's performance test for the first time is Westpac Group Plan MySuper. Westpac must now identify the causes of underperformance and set about working to correct it. It must also assess the potential implications of the failure on the fund and its sustainability, developing a plan to close the product and move members to another, if it becomes necessary.
The other products that failed this year are Australian Catholic Superannuation and Retirement Fund's LifetimeOne, EISS Super's MySuper - Balanced and AMG Super.
The four products that failed the test for a second time are now closed to new members. Of those four products, three were offered by trustees with plans to exit the industry.
Source: Financial Standard, APRA
GIC has led Indian space-tech startup Skyroot Aerospace’s $51 million series B funding round. At the same time Mayank Rawat, managing director of GIC India Direct Investment Group will sit on the firm’s board.
Skyroot develops cryogenic, hypergolic-liquid, and solid fuel-based rocket engines. The fundraising was the biggest funding round in India’s private space tech sector, the firm said.
The startup’s shareholders include Google board member Ram Shriram’s Sherpalo Ventures, former global business chief of WhatsApp Neeraj Arora, and Indian entrepreneur Mukesh Bansal.
Source: The Business Times
The Korean Ministry of health and welfare (MOHW) has appointed Kim Tae-hyun as chief executive officer for the National Pension Service (NPS). He succeeds Kim Yong-jin, who stepped down at the end of his three-year term on April 18.
Kim was previously chairman and president of state-run Korea Deposit Insurance Corp (KDIC). His appointment was effective September 2 and, like his predecessor, he will also serve for three years.
He will primarily be responsible for improving the NPS’s investment returns, MOHW, which supervises NPS, said in a statement.
Source: Korean Ministry of health and welfare
OTHER INVESTMENT NEWS
AUSTRALIA
The Association of Financial Advisers (AFA) and Financial Planning Association of Australia (FPA) signed a Memorandum of Understanding on September 1 as they consider a merger.
The AFA and FPA claim that their goal is to provide the financial advice industry a unified voice. Members will learn more about the proposal, according to the associations, in the coming days. It is anticipated that a vote will be held on the proposal by the end of the year, with a merger target date of January 2023.
According to FPA chair David Sharpe, if it proceeds, current FPA CEO Sarah Abood would serve as CEO while AFA CEO Phil Anderson would assume a general manager transition role.
Sam Perera, the national president of the AFA, announced that eight FPA directors and four AFA nominees will each be represented on the transitional board.
Source: Financial Standard
The Spirit Super and Palisade Investment Partners Consortium will not proceed any further with their planned acquisition of the Port of Geelong, withdrawing their request for merger permission from the Australian Competition and Consumer Commission (ACCC) on August 30.
The Spirit Super Palisade Consortium was recently advised by the ACCC that it still had unresolved preliminary competition concerns that required more investigation. As a result, the Consortium opted not to move forward with the deal.
The ACCC had previously released a statement of issues outlining its preliminary concerns with the proposed acquisition of the Port of Geelong by the consortium. The corporate watchdog was concerned the acquisition may substantially lessen competition in Victoria for the supply of port services for long-term bulk cargo customers.
Source: Financial Standard
CHINA
Wang Bin, former chairman of China Life Insurance and its former Communist Party chief, has been expelled from the party and dismissed from public office for bribery and corruption, China's anti-graft watchdog said on Thursday.
Wang was found to have taken huge amounts of bribes and abused his power to seek benefit for others, the Central Commission for Discipline Inspection said in a statement on its website.
Source: Reuters
Credit Suisse, which has been buffeted by a string of scandals, management changes and global strategy rejigs, is still betting big on China and plans to launch a wealth business there next year, a senior Asia executive said.
"In spite of all these rumours flying around that Credit Suisse is pulling back or pulling out of China, China is a long-term play for us," Benjamin Cavalli, head of its Asia Pacific wealth management business, told Reuters in an interview.
The bank aims to start offering wealth management services in China next year on the back of securing full ownership of its local securities venture, which is likely by the first quarter of next year, Cavalli said.
Source: Reuters
HONG KONG
China’s government has widened a crucial transborder stock trading scheme in Hong Kong to strengthen its status as a global financial hub, in a crucial gesture that has won plaudits from banking and regulatory officials amid the city’s technical recession.
An expansion of the eight-year-old Stock Connect scheme will give mainland Chinese traders access to the shares of Hong Kong-listed overseas companies for the first time, according to the China Securities Regulatory Commission’s vice-chairman Fang Xinghai, at a financial forum in Beijing on Friday.
Source: South China Morning Post
Hong Kong and Shenzhen have announced a slew of incentives for financial firms to set up in Qianhai, as the two cities seek closer collaboration in drawing global venture capital to the special economic zone.
The Financial Services and the Treasury Bureau (FSTB) of Hong Kong and the Shenzhen government announced 18 measures on Friday, with the goal of fostering their partnership in innovation and technology.
The measures, effective for three years, are targeted at venture capital firms, sovereign wealth and private equity funds to encourage funds set up in Qianhai to list in Hong Kong.
Source: South China Morning Post
KOREA
National Pension Service (NPS) had an 8% negative return during the first half of 2022.
The Korean pension fund’s assets under management dropped to 882.7 trillion won ($654.2 billion) as of end-June, according to its preliminary assessment. The rate of return on investment was negative 4.73% as of end-May.
NPS lost 19.58 percent in its investment in Korean stocks, 12.59 percent in overseas stock investment, 4.85 percent in Korean bonds, and 1.16 percent in overseas debts. Alternative investment added 7.25 percent in profit.
Source: NPS
Also read: Home bias takes a toll on performance for Korea’s NPS
Hanwha Life Insurance have bought the property 300 Grant Avenue in San Francisco, California for $155, according to public records.
The building has 70,000 square feet of new office and retail space and is San Francisco’s downtown district Union Square’s first new ground-up office-retail building in two decades. The purchase was closed on August 9, according to deed and title documents.
Source: The Real Deal
MALAYSIA
Malaysian sovereign wealth fund Khazanah is reportedly in talks to lead a $100 million investment round into GoMechanic, which has the largest network of car service centres in India.
The firm is seeking a valuation of about $700 million in this round from investors. The company, backed by Sequoia India, raised $42 million from investors including Tiger Global Management last June at a valuation of around $300 million.
Source: Bloomberg
MIDDLE EAST
By order of Bahrain's Crown Prince and Prime Minister, Salman bin Hamad Al-Khalifa, the board of the national wealth fund Mumtalakat Holding will be restructured with Salman bin Khalifa Al-Khalifa serving as its chairman, according to state news agency BNA on September 4.
Mumtalakat, which manages slightly more than $18 billion in assets, revealed its standalone annual results in June, revealing that it turned a profit in 2021 after suffering a loss the previous year.
Its portfolio includes holdings in the largest aluminum smelter outside of China, Aluminium Bahrain as well as British racing team and supercar manufacturer McLaren.
Source: Reuters
NEW ZEALAND
New Zealand’s government has scrapped plans to tax the management fees paid by pension funds after an outcry over the impact it could have on savers.
The government will not proceed with a proposal to standardize the application of the Goods and Services Tax to fees and services of managed fund providers, Revenue Minister David Parker said in a statement. The u-turn, a day after the plan was revealed, follows criticism that the cost would be passed on to investors in the national KiwiSaver pension scheme and result in lower savings.
Source: Bloomberg
SINGAPORE
Singapore state investment fund Temasek is leading the latest $100 million fund-raising round for blockchain investor Animoca.
The company is now valued at $6 billion. This year alone, it raised $359 million in January from investors including George Soros and the Winklevoss twins, and another $75 million in the summer.
Hong Kong-based Animoca is Asia’s biggest blockchain investors with a portfolio of 340 finance, gaming and social media companies.
Source: Bloomberg
Canadian engineering company WSP Global is raising C$800 million ($607.72 million) in new equity, half of it coming from Singapore sovereign wealth fund GIC, the Caisse de Depot et Placement du Quebec (CDPQ) and Canada Pension Plan Investment Board (CPPIB).
The funding will be used for WSP’s £625 million ($755 million) acquisition of UK consulting firm RPS Group – the company’s second major deal in the past three months as the group continues its aggressive deal spree.
CDPQ will invest C$150 million, bringing its total investment in WSP to about C$950 million including reinvested dividends. It has been a highly successful investment: the Caisse’s 18% stake in WSP is worth more than C$3.2 billion, according to data compiled by Bloomberg.
CPPIB, which owns about 15% of WSP, is investing C$50 million in new shares as part of the deal, while GIC has subscribed for C$200 million.
Source: Bloomberg