Weekly investors roundup: Hong Kong chases family offices; GPIF names global real estate manager

TOP NEWS OF THE WEEK

Hong Kong officials are set to embark on a roadshow to woo wealthy families in the Middle East and Europe to set up investment offices, as the city strives to bolster its position as a financial centre now that it has relaxed its long-standing quarantine requirements.

A team of officers from InvestHK, a government agency that promotes the city as an international finance hub, will visit Dubai and Abu Dhabi from October 17 to 22. A trip to London and Zurich will follow in November.

This is the first time InvestHK has launched such promotional efforts since the pandemic began in 2020. The roadshow will be headed by Dixon Wong, the agency’s global head of family offices, his deputy Christine Ho and their team members.

Source: South China Morning Post

Japan's Government Pension Investment Fund (GPIF) has hired LaSalle Investment Management to run a core global real estate fund-of-funds strategy. The pension fund offered no details on the size of allocation that would be made to LaSalle. Mizuho Trust & Banking will act as gatekeeper and the mandate would pursue co-investments, joint ventures and club deals, LaSalle said.

GPIF, the world’s largest pension fund, has an investment allocation target that allows up to 5% of its total portfolio into private market/alternative investments, including real estate, infrastructure and private equity.

As of end June 2022, alternative investments made up 1.32% of the total portfolio. GPIF awarded its first global real estate fund-of-funds mandate to CBRE Global Investment Partners in 2018, with local Asset Management One as gatekeeper.

Source: GPIF, LaSalle Investment Management

Also read: Japan’s GPIF eyes more alternatives after promising returns

Singaporean sovereign wealth fund GIC has committed A$490 million ($310 million) to a second logistics fund by ESR Australia.

The new venture EADP II is the successor to the fully allocated ESR Australia Development Partnership (EADP), established in June 2020 with A$1 billion of equity commitments from partners including GIC, ESR's Pan Asia Fund, and Sovereign Wealth and Life Insurance funds.

ESR Group has raised A$540 million for the new fund, which has a targeted size of A$1 billion.

Source: PR Newswire

OTHER INVESTMENT NEWS

CHINA

China has drafted tough requirements that insurance companies would need to meet to participate in the state-backed personal pension scheme, industry sources with knowledge of the matter told Caixin, with analysts estimating that only fewer than 30 firms would be eligible.

The China Banking and Insurance Regulatory Commission (CBIRC), the country’s top insurance watchdog, issued draft rules to nearly 100 life, health or pension insurers late last month, said the sources.

Source: Caixin Global

HONG KONG

Hong Kong's total Mandatory Provident Fund (MPF) assets have fallen below HK$1 trillion ($127.4 billion) - retreating to June 2020 levels - following investment losses of HK$82.1 billion in September.

Data from research firm MPF Ratings shows investment losses for the first nine months this year accumulated to HK$258.9 billion, meaning paper losses of HK$56,500 for each of 4.57 million members.

The average MPF member account balance thus dipped by 18.1% this year to HK$211,000 as of September after including contributions.

Source: The Standard

INDIA

Billionaire Gautam Adani and his family are in early talks with investors, including Temasek, Singapore’s sovereign wealth fund GIC, and other wealth and private equity funds, to raise at least $10 billion to fund the group’s expansion plans in clean energy, ports and cement businesses.

Adani family members and top group executives held discussions with several potential investors, two people with direct knowledge of Adani Group and the Adani family’s plans said on the condition of anonymity.

Source: Mint

Mukesh Ambani, the second richest man in Asia, is setting up a family office in Singapore.

The chair of Reliance Industries has picked a manager to hire staff and set up the family office. The family has also selected real estate in the city-state.

Source: Bloomberg

KOREA

South Korea is set to complete the process for a stock market stabilization fund of W10 trillion ($7 billion) by the middle of this month, to be able to immediately tap into the fund to reduce volatility in the market when necessary.

The fund’s investment management committee, led by Kang Shin-woo, a former chief investment officer at the sovereign wealth fund Korea Investment Corporation (KIC), will decide on the details of the fund’s use, such as the timing and size.

Personnel from key investors of the fund such as the Korea Development Bank, Mirae Asset Securities, Samsung Life Insurance and Busan Bank also joined the fund management body.

Source: Korea Economic Daily

Korea Teachers’ Pension seeks domestic venture capital (VC) fund managers to handle mandates totaling up to W100 billion ($70 million).

The pension fund has issued a request for proposal for local VC fund managers and aims to choose four companies to manage up to W25 billion each. The managers’ proposed VC funds must be at least W100billion each and have 30% of the amount stemming from institutional investors.

Requests for proposals are to be submitted by October 20.

Source: Korea Teachers’ Pension

Similarly, Korea Teachers’ Pension has awarded four domestic private equity blind fund mandates to local asset managers.

SkyLake Investment, Stonebridge Capital, Stic Investments and IMM Private Equity have each been given a W100 billion ($70 million) mandate from the pension fund.

This selection followed another round of domestic private equity blind fund mandates selected in 2021, with a total of W200 billion divided between Stic Investments, IMM Private Equity, Macquarie Asset Management and Crescendo Equity Partners.

Source: Korea Teachers’ Pension

The Korea Investment Corporation (KIC) is aiming to become a signatory of the UN-supported framework Principles for Responsible Investment (PRI) in a bid to expand its sustainable investing agenda both internally and through global partnerships, the sovereign wealth fund announced on October 5.

KIC established its own stewardship principles in 2018 and has been fully ESG (environment, social and governance) integrated since 2020, meaning that ESG considerations are applied to entire assets across all asset classes.

Source: KIC

Also read: KIC to ramp up ESG efforts by signing UN-supported framework

MALAYSIA

The Employees Provident Fund (EPF) had in 2021 recorded its first negative net contribution in 20 years at RM58.2 billion as members withdrew funds from their EPF accounts to cushion the impact of Covid-19 pandemic movement restrictions which began in early 2020, according to the EPF's chief executive officer Datuk Seri Amir Hamzah Azizan.

"Even though in 2021 we recorded our first ever negative net contribution (contributions after withdrawals) in 20 years of RM58.2 billion due to the pandemic-related withdrawals, we were able to maintain a healthy cash balance at the end of the year while delivering dividend rates that were above expectations," Amir Hamzah said in the EPF's latest annual report for 2021.

Source: The Edge

MIDDLE EAST

Saudi Arabia's Public Investment Fund become the first sovereign wealth fund to issue green bonds last Wednesday, aiming to raise $3 billion in its first foray into the debt capital markets.

PIF joined a small group of issuers tapping the market after a run of heightened volatility this year, selling its first ever green bonds with a 100-year maturity alongside two other tranches of the issue.

The three green bond offerings are: $500 million of 100-year notes sold at a yield of 6.7%; $1.25 billion in five-year bonds launched at 125 basis points (bps) over US Treasuries; and, $1.25 billion in 10-year paper at 165 bps over US Treasuries.

Source: Wall Street Journal

SINGAPORE

Singapore’s GIC led a $60 million funding round for Indian electric vehicle-market Euler Motors. Other investors that participated in the Series C round included Blume Ventures, Athera Venture Partners, QRG Holdings, ADB Ventures and Moglix.

The startup did not disclose the valuation at which it raised the funds. It plans to use the funds to speed up product development and expand its retail presence in 12 new markets by the end of the current fiscal year.

The four-year-old company will also look to add new employees and expand distribution using the funds.  It reported revenue of 300 million rupees ($3.68 million) in the last financial year. The firm said it would report revenue of 3 billion rupees this year.

Source: Reuters

TAIWAN

Bureau of Labor Funds (BLF) plans to hire seven asset managers for a NT$70 billion ($2.21 billion) domestic absolute return equity mandate, which will be open for bidding by December. Investments will focus primarily on locally-listed companies that are compliant with environmental, social and governance standards.

The BLF is targeting a return that is equivalent to the five-year average return of Taiwan’s benchmark stock index plus 250 basis points.

Source: Asia Asset Management

At least two Taiwan life insurers and the island’s Labor Pension Fund plan to push for less strict disclosure requirements from regulators on publicly traded companies to avoid possible market volatility once new rules are introduced, people familiar with the matter said. 

At least two major Taiwan insurers will ask the Life Insurance Association to seek the exclusion on behalf of its members, or to be allowed a longer reporting period once the law is passed, the people said, declining to be named as they are not authorized to speak publicly.

Proposed amendments that are expected to be passed in the current legislative session will require that investors disclose if they accumulate more than 5% of a company, compared with a 10% threshold at present. The disclosure would have to be made within ten days, with any subsequent increase or decrease of one percentage point having to be announced within two days -- as is the current practice.

Source: Bloomberg

The average equity-to-asset ratio at seven local life insurers last month dropped below the 3 percent minimum as investment value plummeted amid rate hikes, the Financial Supervisory Commission said.

The firms are Nan Shan Life Insurance, Cathay Life Insurance, PCA Life Assurance, Mercuries Life Insurance, Hontai Life Insurance, Allianz Taiwan Life Insurance, and First Life Insurance. Nan Shan’s equity-to-asset ratio — a solvency measure — sank to minus-0.59 percent, meaning it had a negative net worth last month.

The company on Monday blamed rising interest rates for a plunge in the valuation of its fixed-income investments.

Source: Taipei Times

Kuomintang lawmakers on Thursday urged labor insurance reforms after the Cabinet announced a plan to inject NT$45 billion (US$1.42 billion) to bolster Taiwan’s insurance funds.

Labor pension funds had lost NT$320.4 billion as of last month, which suggests mismanagement, KMT caucus whip William Tseng told a news conference at the legislature.

The Ministry of Labor should explain why the funds were used to stabilize the stock market earlier this year, a decision that likely contributed to the funds’ woes, he said, adding that the National Audit Office should investigate.

Source: Taipei Times