Weekly investors roundup: Sumitomo Life Insurance issues $22 billion corporate bond mandate; Singapore's GIC increases stake in India's Phoenix Mills with $50 million investment
TOP NEWS OF THE WEEK:
The investment - reported by The Economic TImes on July 1 - is the second tranche of investment under the strategic partnership between GIC and India’s largest retail-led, mixed-use asset developer and operator to set up a joint venture to develop, own and operate retail-led, mixed-use developments across India.
Last year, GIC had acquired an equity stake of nearly 26.44% in The Phoenix Mills’ Rs 5,500 crore worth select portfolio by investing an aggregate amount of Rs 1,111 crore. With this investment, GIC’s stake in each of these subsidiaries has risen to 32.90%, while Phoenix Mills owns the balance 67.10%.
Source: The Economic Times
Taiwan pension and annuity funds supervised by the Bureau of Labor Funds (BLF) reported wider investment losses as the war in Ukraine and China’s strict pandemic policy continued to hamper global supply chains, and central banks hiked interest rates to rein in inflation, dimming growth expectations.
The eight funds posted a total investment loss of NT$251.5 billion ($8.42 billion) from January through May, increasing from NT$215 billion through the first four months of the year. Their average investment loss in the five months was 4.53% versus 3.92% through April.
“With the prolonged global geopolitical tensions and China’s zero-Covid policy, the global supply chain continued to be in a tough situation in May,” BLF said in a statement on July 1. “This, coupled with the ongoing inflation hikes and global central banks’ tightening monetary policy, worsened growth expectations and dealt a blow to stock and bond markets,” it said.
The pension supervisor says its funds will place greater emphasis on chasing long-term stable returns amid volatile market conditions.
Source: Asia Asset Management
MORE INVESTMENT NEWS:
AUSTRALIA
Aware Super has made a cornerstone investment into North Harbour Clean Energy with the opportunity priced at A$30 billion ($20.42 billion) and A$100 billion over 2030 and 2050 horizons, respectively.
This estimate is based on Australian Energy Market Operator figures which estimate a need for an additional 400GWh of storage by 2030 and more than 600GWh by 2050.
Aware Super said it saw the deal as an opportunity to support a very early-stage energy storage business, led by a team with excellent credentials in the energy sector. It added that the investment would have a positive impact on communities through its investment strategy.
Source: Financial Standard
Rest has finalised the acquisition of a one-third stake in the recently completed Quay Quarter Tower in Sydney’s central business district.
The new tower, the redevelopment of the old AMP Tower, features around 89,000 square metres of office space, 95% of which is already leased, and around 4,000 square meters of retail space. The building is also targeting a 5.5 Star NABERS Energy Rating, and a 6 Star Green Star Design & As Built rating from the Green Building Council of Australia.
The property is expected to generate strong long-term net returns, and with nearly all the office space leased under long-term arrangements, it offers a secure income stream, the superannuation fund said in a statement.
It added that property assets such as this provides stability and resilience at a time of volatile share markets and weak fixed income returns.
Rest entered into a contract to acquire a one-third interest in 2018. The remaining interests are owned by the AMP Capital Wholesale Office Fund and Dexus Wholesale Property Fund.
Source: Rest
Australian Retirement Trust's default option returned -0.96% last financial year, beating expected median returns of -2.8%.
The fund's diversified portfolios weathered the storm better than most, with the Super Savings and QSuper Balanced options among the best performing products this financial year, the fund said. Over 10 years, the options have returned 9% and 7.8% respectively.
Source: Financial Standard
CHINA
Singapore-based warehouse developer GLP has set up a $5 billion income fund focused on logistics properties across China, supported by existing as well as new investors including insurance giants AIA and Allianz.
The new fund—called GLP China Income Partners V—recapitalises a portfolio of assets developed by GLP China Logistics Fund I, which had been set up in 2013 with $1.5 billion in initial capital commitments from institutional investors. The properties now comprise 54 prime logistics facilities with a combined gross floor area of over 5 million square meters across 27 key locations in China.
Demand for warehouse space has increased particularly from e-commerce players, whose businesses boomed in the past two years as consumers stuck at home during the pandemic turned to online shopping and food deliveries. Tenants in the recapitalised logistics assets are primarily e-commerce firms and third-party logistics providers, according to GLP.
Source: Forbes
Sequoia Capital China is close to raising nearly $9 billion to put into Chinese start-ups, defying global investor apprehension about Beijing’s zero-Covid policies, a crackdown on technology groups and heightened geopolitical risk.
The fundraising haul, which two people familiar with the matter put at between $8 billion and $9 billion for four separate funds, will allow China’s premier venture capital group to plough new money into start-ups desperate for cash.
Sequoia China plans to close the round this week, one of the people said, adding that it was 50% oversubscribed.
Source: Financial Times
Missing tycoon Xiao Jianhua was scheduled to face a Shanghai courtroom on July 4, more than five years after the billionaire financier was snatched from a Hong Kong hotel by Chinese security guards.
The trial would be the first time that the 50-year-old Xiao, a Chinese-born Canadian citizen with connections to the top echelons of the political elite in Beijing, had appeared in public. He was expected to face charges related to graft after his Tomorrow Group collapsed following a debt-fuelled acquisition binge by a group of expansive Chinese conglomerates.
Xiao’s abduction from Hong Kong’s Four Seasons in January 2017 sent shockwaves through the city. Before his downfall, he had been an enigmatic dealmaker who helped arrange the business affairs of some of China’s most powerful families.
Source: Financial Times
HONG KONG
Hong Kong-listed warehouse giant ESR has agreed to sell a portfolio of nine industrial assets in China to its joint venture (JV) with Singapore sovereign fund GIC for $730 million.
The portfolio is 98% occupied and consists of completed assets with a total gross floor area of more than 873,000 square metres (9.4 million square feet) across regions including the Yangtze River Delta, the Greater Bay Area and Beijing-Tianjin-Hebei, ESR said in a release on July 4. The transaction represents ESR’s largest-ever sell-down of self-developed balance sheet assets.
The JV is held 90% by GIC and 10% by ESR, according to financial details disclosed in a separate filing with the Hong Kong stock exchange. The just-announced deal, which remains subject to regulatory approval, will bring the overall core portfolio managed by ESR with GIC to over 1.4 million square metres.
Source: Mingtiandi
Avantua Group, the family office created by the scion of Hong Kong’s third-richest family, is preparing to launch its first hedge fund as soon as this quarter as better sentiment in the city and mainland China’s stock markets are winning back global investors.
The firm, founded in 2019 by Adrian Cheng Chi-kong of New World Development, is seeking to raise $50 million in the new venture, with about one-fifth of its own money and the rest from outside investors, according to managing director Xu Hao. It aims to complete the fundraising by September and start investing using a long-short strategy, he added.
Source: South China Morning Post
KOREA
The asset management capabilities of South Korea's National Pension Service (NPS) are under stress due to the country’s soaring aging population and the firm's high staff turnover.
The pension fund’s total assets reached $704.7 billion (918.2 trillion won) as of end-February; the assets are expected to steadily increase to (1.07 quadrillion won) until 2038 and will decline from 2039. This means NPS needs stability in investment management with long-term plans.
The NPS also continues to experience high staff turnover, with at least 14 professionals in its investment management arm resigning by the end of June, according to a report by the pension fund released on July 8.
Between 2017 and 2021, the average rate of resignation from the investment management arm was 28 employees on average per year. Reports cited the inconvenient location of the NPS investment management office as one of the main factors contributing to the high turnover at the pension fund.
Source: The Korean Economic Daily
Several large South Korean pension funds are raising interest rates on their member's savings accounts to match rate increases seen this year by central banks around the world. The pension funds are reportedly struggling to meet the expectation of high target returns amid a worsening investment climate.
The funds include the Korean Teachers’ Credit Union (KTCU), which manages over $32.1 billion (41.8 trillion won), which increased the maximum interest rate of its savings products for the first time since 2019 from 3.74% to 3.8% with effect from July 1.
Other pension funds that have made a similar move include the Public Officials Benefit Association (Poba), the Military Mutual Aid Association (MMAA), the Police Mutual Aid Association (PMAA) and the Korea Scientists and Engineers Mutual-Aid Association (Sema).
Source: The Korean Economic Daily
MALAYSIA
Khazanah will explore potential investment opportunities in Turkey as part of the sovereign wealth fund’s strategy to leverage its global presence and networks, according to a company statement on Jul 6.
Khazanah has invested more than $2.7 billion (RM11.95 billion) in various industries in Turkey through its investee companies since 2008. Among the significant investments are Acibadem Healthcare Group, one of Turkey’s largest private healthcare providers, through IHH Healthcare, and Istanbul Sabiha Gökçen International Airport, one of Europe’s busiest international airports, through Malaysia Airports Holdings.
Source: The Edge
Senior Sarawak government officials, led by state premier Abang Johari Tun Openg, met with Singapore GIC officials on Wednesday (Jul 6), and were briefed on the operation, governance structure, investment strategies and policy framework of the sovereign wealth fund.
In May, Sarawak officials also met with officials from Norway’s Norges Bank Investment Management, which manages The Government Pension Fund Global, for a similar briefing in Oslo to gather inputs for the East Malaysian state to establish a sovereign wealth fund.
Abang Johari, who was on an official visit to Singapore, had announced plans previously to table the bill on the setting up of a sovereign wealth fund at the November sitting of the state legislative assembly.
Source: The Edge
PHILIPPINES
The Government Service Insurance System (GSIS) has returned to the black in 2021 with a net income of P595.8 billion ($10.6 billion), on the back of lower pricing of future liabilities as well as smaller expenses than revenues.
The audited financial statements of the state-run pension fund for government workers showed a reversal of the P94.2-billion net loss posted in 2020.
The GSIS grew its income last year to P424.1 billion from P363.8 billion in 2020. Service and business income mainly from members’ contributions, assistance and subsidy from the national government, investment gains, as well as other non-operating income all increased in 2021 alongside economic recovery from the pandemic-induced slump.
Source: Philippine Daily Inquirer
SINGAPORE
Singapore’s state investment fund Temasek has overtaken Australia’s Future Fund as the world’s largest state-owned investment fund with best practices in governance, sustainability and resilience, according to the latest scorecard released by Global SWF on July 1.
The data platform has been ranking state-owned investors on aspects such as transparency and accountability, responsible investing and legitimacy and long-term survival since 2020.
For two years running, Global SWF had given perfect scores to Future Fund. But this year, it perceived Temasek to have fulfilled its criteria for a publicly available indication of how it is funded and how it is possibly withdrawn and gave Temasek a better score.
Source: The Business Times
TAIWAN
The Bureau of Labor Funds (BLF) is looking to hire six asset managers for a $3 billion multi-sector absolute return fixed income mandate on a five-year term, with $500 million to be mandated to each selected manager, it said in a request for proposal on July 5.
This is BLF’s second mandate this year. Selected asset managers will oversee the mandate on behalf of the Labor Pension Fund, Taiwan’s largest defined-contribution retirement plan, one of the eight pension and annuities funds supervised by the BLF.
Applicants are required to have over three years of investment track record and a global portfolio with a market value of at least $5 billion as of May 31, 2022.
Source: BLF