Weekly investors roundup: NBIM, GIC and ADIA commit to India's Life Insurance Corporation IPO; Future Fund posts 1.5% quarterly loss
TOP NEWS OF THE WEEK
Sovereign wealth funds from Norway, Singapore and Abu Dhabi have committed to the initial public offering of Life Insurance Corporation (LIC) of India.
LIC’s IPO is India’s largest ever public which has now raised $736 million ahead of its full initial public offering. The 123 anchor investors — which include Norges Bank Investment Management, GIC and the Abu Dhabi Investment Authority — have committed to purchase shares at $12.4 (949 rupees) each, the top end of a marketed range according to Bloomberg Intelligence.
The LIC IPO will run from May 4 to 9, and aims to raise as much as $2.7 billion.
Source: Bloomberg, Business Standard
Australia’s sovereign wealth fund Future Fund reported -1.5% returns for the first quarter of the year, citing the global equity market downturn and a flat Australian market.
The fund has added to its alternatives strategy and will continue to look for “less liquid and more skill-based investments”.
Chief executive Raphael Arndt said in a statement that the portfolio is positioned for a challenging investment environment at moderately below a neutral risk setting.
The fund also warned of heightened risks from the Russia-Ukraine crisis and ongoing fragility and disruption to global markets.
Source: Future Fund
A group of five Japanese insurance companies have invested in a new sustainable development bond issued by the World Bank (International Bank for Reconstruction and Development, IBRD) which aims to support a holistic approach to climate action. The A$516 million ($367.3 million) bond has a maturity date of April 26, 2030.
The Japanese insurers are Asahi Mutual Life Insurance Company, The Dai-ichi Life Insurance Company, Limited, Fukoku Mutual Life Insurance Company, Meiji Yasuda Life Insurance Company, and Sumitomo Life Insurance Company.
The World Bank said in a statement that the transaction builds on IBRD’s September 2021 Green Bond issuance, by also bringing together Japanese life insurance companies to invest in bonds that demonstrate their collective support for the urgency of climate action.
Source: The World Bank
Fubon Life Insurance, the insurance unit of Taiwanese financial conglomerate Fubon Financial Holdings, and Taiwan Life, which is part of CTBC Financial holdings, have committed a total of $255 million to four private equity funds.
According to documents Fubon Financial filed with the Taiwan Stock Exchange, Taipei-based Fubon Life has committed €200 million ($210 million) to Macquarie European Infrastructure Fund 7 SCSp.
Source: DealStreetAsia
MORE INVESTMENT NEWS:
AUSTRALIA
Schroders Capital has won a $178.1 million private debt mandate from an Australian superannuation fund.
While the official statement from Schroders on April 27 did not name the specific fund, the mandate has been revealed as covering corporate, real estate and infrastructure debt with a targeted return of 4.5% over the benchmark Bloomberg AUSBOND Bank Bill index
This is the first private debt mandate from a superannuation fund for Schroders Capital, the alternatives investment unit of Schroders plc, which managed $73 billion of alternative assets as of December 2021.
Source: Asia Asset Management
Hostplus and Statewide Super have finalised their merger, making the combined entity among the top 10 largest superannuation funds in terms of assets under management at A$81 billion ($58 billion).
The fund is also in the process of merging with the A$6 billion Maritime Super and expects to reach A$100 billion AUM in 2023 through the merger and organic growth.
Source: Hostplus
CHINA
Ping An Insurance Group made its first public statement about HSBC on Monday as it pushes for a potential break-up of the biggest of Hong Kong’s currency-issuing banks.
The Shenzhen-based company, which is HSBC’s biggest shareholder with a reportedly 9.2% of the lender’s shares, has privately approached HSBC’s board of directors about spinning off the bank’s Asia business for a separate listing in Hong Kong, according to media reports.
“We support a debate about the future of the bank,” a Ping An spokesperson said. “We want shareholders to participate in the debate and to propose solutions for HSBC. Ping An supports all reforms and proposals from investors that can help HSBC’s operations and long-term growth.”
Source: South China Morning Post
China Securities Regulatory Commission has urged mutual funds to actively participate in the just-announced private pension scheme, increasing the portion of mid- to long-term assets and providing support in policymaking, product design and attracting more fund managers in pension fund management, CSRC said on April 26.
The regulator also urged mutual fund managers to stick to long-term and value investments, and avoid short-term deals through effective guidelines and policies, to act as a stabiliser and cornerstone of the capital market.
CSRC pledged to steadily open up the fund management industry and support quality foreign financial institutions to set up fund management companies in China or expand shareholding.
Source: China Securities Regulatory Commission
The average comprehensive solvency adequacy ratio of life insurance companies was 222.5%, down 17.1% in 2021. The actual solvency capital of life insurance companies was 4.2 trillion yuan ($635.6 billion) by the end of 2021, a year-on-year decrease of 0.8%, according to data released by China Banking and Insurance Regulatory Commission on April 29.
In 2021, the net profit of the industry will be 219.7 billion yuan, a year-on-year decrease of 30%; among which, the net profits of life insurance companies were 156.6 billion yuan ($23.7 billion), down 39%.
The solvency ratio of China’s insurance industry fell slightly in 2021 compared to that of 2020, with the average comprehensive solvency adequacy ratio standing at 232.1%, down 14.2%. The average core solvency adequacy ratio was 219.7%, falling by 14.6%. Both indicators were above the 100% and 50% compliance levels.
Source: China Banking and Insurance Regulatory Commission
HONG KONG
A blank-cheque firm backed by VMS Asset Management has paused plans to go public in Hong Kong due to highly volatile markets, said a person with knowledge of the matter, clouding Hong Kong prospects for special purpose acquisition companies (SPACs).
Vivere Lifesciences Acquisition Corp's $130 million SPAC share sale, set to have been Hong Kong's second, is waiting for markets to stabilise before opening its books, said the person, declining to be identified as the information is private.
Source: Reuters
INDONESIA
State-owned Indonesia Re and its UAE counterpart Etihad Credit Insurance (ECI) have signed a reinsurance agreement to enhance bilateral trade and support collaborative initiatives across the world.
This pact, which follows the MOU signed between the two parties last November, will help domestic companies of the respective countries access liquidity and funds to pursue their international expansion. They will also support domestic enterprises in several growth sectors with innovative trade finance products, including ECI’s unique Shariah-compliant finance solutions, ECI Islamic.
Source: Gulf Business
KOREA
Korea Post has opened its fifth mandate this year, seeking bids for an environmental, social and governance (ESG) corporate bond exchange-traded fund mandate for its insurance unit.
The government postal agency, which has around $122 billion in assets, is looking for one or two fund management firms with at least $5 billion of total assets under management. Applicants must have a minimum three-year track record of managing foreign bond-type ETFs.
The mandate is benchmarked against the Bloomberg MSCI Global Corporate SRI Index and the winning bidders may be domestic or foreign firms Korea Post said in its request for proposal on April 22.
Applications are open until May 6 with evaluation and manager selection scheduled by the end of June.
Source: Asia Asset Management
MALAYSIA
Malaysian pension fund Kwap (Kumpulan Wang Persaraan Diperbadankan) said it is no longer a shareholder of troubled energy services group Serba Dinamik Holdings.
"Kwap has relinquished its entire stake in Serba Dinamik and is no longer a shareholder," the pension fund said in a statement on April 29 in response to an article published by The Edge on Thursday titled “SC executive chairman tenders resignation six months after three-year extension”.
According to bourse filings, Kwap had ceased to be a substantial shareholder of Serba Dinamik on June 1 last year after disposing of 26.03 million shares in the company in the open market.
Source: The Edge
SINGAPORE
Singapore’s sovereign wealth fund GIC has agreed to buy a 75% stake in British Land’s Paddington Central office complex in London for 694 million pounds ($885 million), adding to signs of growing Asian investor appetite for real estate assets in the European financial hub.
The transaction, which is expected to be completed within three months, comprises four existing office buildings on Kingdom Street and Sheldon Square as well as a development site. The property will be held by a new joint venture company, which will be owned 75% by GIC and 25% by British Land, a real estate investment trust listed on the London bourse.
The price paid by GIC is 1% below September 2021 book value and represents a Net Initial Yield (NIY) of 4.5%. British Land is one of the UK’s biggest property groups, overseeing a £13 billion portfolio, predominantly offices.
Sembcorp Marine (Sembmarine) and Keppel Offshore & Marine (O&M) – both backed by Singapore’s state investment firm Temasek Holdings - are merging to form what could be one of the world’s largest offshore energy players worth $8.7 billion ($6.29 billion).
The move – announced jointly by the two companies on April 28 - comes around a year after the two began talks. After taking into account the respective capital structures of the two firms, the $500 million cash Keppel O&M will pay to Keppel and other adjustments, Keppel will end up owning 56% of the combined entity, while Sembmarine shareholders will own 44%.
Source: The Straits Times
TAIWAN
The Chinese Nationalist Party (KMT) has proposed a bill to require the government to subsidise the Labor Insurance Fund with at least NT$80 billion ($2.71 billion) per year to keep it from going bankrupt, KMT caucus whip William Tseng said on Sunday.
The KMT caucus called on the government to address the imminent bankruptcy of the fund, which is intended to provide retirement pensions for workers.
It proposed an amendment to the Labor Insurance Act for the government to allocate at least NT$80 billion for the fund annually to ensure its sustainability, Tseng told a news conference in Taipei.
Source: Taipei Times