Weekly investors' roundup: GPIF reveals equity manager lineup
TOP NEWS OF THE WEEK
Japan's Government Pension Investment Fund (GPIF) announced on January 10 a restructuring of its manager lineup for active foreign equities, with 19 new mandates heavily weighted to US-based money managers.
The contracts, awarded in late October, were given – either as advisers or subadvisers – to BlackRock, Fidelity Institutional Asset Management, Brandywine Global Investment Management, CIBC Asset Management, J.P. Morgan Asset Management, Manulife Investment Management (US), Neuberger Berman, Putnam Investments, T. Rowe Price Associates, Wellington Management, Applied Finance Capital Management, Columbia Threadneedle, DuPont Capital Management and Jacobs Levy Equity Management
Of these, BlackRock, T. Rowe and J.P. Morgan won two GPIF mandates each. The list of 19 mandates also included European fund managers Amundi Asset Management US and Impax Asset Management.
Source: GPIF
Hong Kong’s Mandatory Provident Fund (MPF) suffered its worst investment loss last year since the 2008 global financial crisis, but may see a double-digit rebound in 2023 amid signs that investor sentiment is recovering, according to local investment consulting firm GUM.
MPF’s return on investments plunged 15% in 2022, steeper than the 0.3% drop in 2021, as global markets were battered by US rate hikes to rein in inflation, the war in Ukraine, and lengthy Covid-19 lockdowns in China, the firm said.
“But market sentiment has already turned around,” GUM says. “MPF began to bounce back since November after almost a year-long bear run. GUM expects the fund is likely to see a double-digit return in 2023.”
Source: GUM
The assets under management (AUMs) of public pension funds globally are set to grow from today’s $20.8 trillion to $24.6 trillion by 2025 and to $33.2 trillion by 2030 due to consolidation and increasing contributions, Global SWF said in a report.
However, their combined AUMs decreased by $1.3 trillion to $21 trillion year-on-year in 2022 as funding ratios worsened.
“The major challenge of 2022 was the simultaneous and significant (>10%) correction of bonds and stocks, which had not happened in 50 years,” the report added.
These are paper losses and some of the funds will not see them realised in their role as long-term investors, Global SWF noted.
Compared to 2021, PPFs invested 9% less, with $108.6 billion in 320 deals, the report said.
Source: Global SWF
OTHER INVESTMENT NEWS
AUSTRALIA
The Australian Retirement Trust (ART), Macquarie Asset Management and PGGM Infrastructure Fund have backed Macquarie Finance in its $2.2 billion acquisition of an aircraft portfolio from ALAFCO Aviation Lease and Finance Company, according to joint statement on January 10.
Macquarie AirFinance shareholders will contribute $600 million of new equity for the deal. The transaction will also be supported by a $1.65 billion acquisition facility, underwritten by BNP Paribas, Citibank, MUFG Bank and Natixis.
Source: Macquarie
HONG KONG
Hong Kong-based private equity firm PAG has raised a further $270 million for its third pan-Asian core-plus/value-add real estate fund, according to a filing with the US Securities and Exchange Commission on January 10.
The latest commitment to PAG Real Estate Partners III come from three separate investors, according to the SEC filing. The investors have not been disclosed.
The latest round of capital comes after the 2021-vintage PREP III secured $250 million from two large US pension funds last year—the California State Teachers Retirement System ($200 million) and the Employees Retirement System of Texas ($50 million).
Source: US SEC
JAPAN
The Japanese units of Aflac Life Insurance and Zurich Insurance say the personal data of a combined two million customers have been illegally accessed. They cited possible hacking at third-party business partners.
Aflac Life Insurance Japan says the breach affects more than 1.3 million holders of the firm's cancer insurance policies. The stolen data include names, ages, genders, and policy numbers.
Zurich Insurance says details of more than 750,000 present and past policyholders of its auto insurance may have been leaked. The company says the hacked information likely includes names, genders and birthdates, as well as email addresses and policy numbers.
The insurers say they have not confirmed any unauthorised use of personal data so far. They say the US firms they outsource some operations to may have been hacked. The companies have apologised and say they will contact affected customers individually.
Source: NHK
KOREA
South Koreans will have to pay over 12 percentage points more in contributions in the next 10 years to stabilise the struggling finances of the National Pension System, according to a study conducted by the Korea Institute for Health and Social Affairs.
The study unveiled that a person must have to pay more than 21% after 10 years from the 9% contribution being made from their monthly salary under the current system. This is higher than the average of 18.2% among members of the Organization for Economic Co-operation and Development.
If the plan that entails a higher contribution rate takes effect, the depletion of the national pension fund could be delayed by about 30 years than originally predicted, but it will face a backlash from those who have to pay more in pension contributions.
Source: Maeil Business News Korea
SINGAPORE
After selling many of its hotel assets to GIC last year, Japanese hospitality company Seibu Prince Hotels Worldwide aims to expand in Asia.
The sale of the properties, including 30 in Japan, have fueled an asset-light strategy as the company expan in Asian markets, even as it continues to operate all hotels and other facilities under the Seibu Prince Hotels Worldwide brand, president Masahiko Koyama said.
Source: Nikkei Asia