TOP NEWS OF THE WEEK
Singapore state investor Temasek has expressed interest in cryptocurrency and blockchain-related assets but will focus on the “highest-quality projects”, managing director of blockchain investments Pradyumna Agrawal said.
In an interview with The Business Times, he said that although there is now “a lot of noise” in the cryptocurrency space, Temasek still has a “degree of conviction” about the technologies and opportunities in the nascent sector.
“We are very careful about doing our diligence on both reputation and solutions. (Temasek) will typically invest in impact companies which are committed to regulatory compliance,” he said, adding that the company will ensure it is “comfortable” with the various risks associated with its investments.
Source: The Business Times
Meanwhile, family offices in Asia are buying into cryptocurrencies, despite months of market turmoil, as weak returns from their traditional portfolios make digital assets attractive.
The interest from investment managers suggests there are still new buyers of cryptocurrencies such as bitcoin and ether, after a boom in digital asset prices during 2020 and 2021 turned to a bust.
Several family offices and wealthy individuals in Hong Kong said this year’s decline in digital asset prices had to be set against the poor performance of local equity and property markets.
Source: Financial Times
Mubadala Investment Company (Mubadala), a UAE sovereign investor, and global investment firm KKR have signed a strategic partnership that will see the two firms co-investing across performing private credit opportunities in the Asia Pacific region, according to an announcement on October 23.
Through the partnership, the two firms aim to deploy at least $1 billion of long-term capital, providing bespoke credit solutions to companies and sponsors. Mubadala will deploy its capital alongside KKR’s existing pools of capital, including the recently raised KKR Asia Credit Opportunities Fund, a $1.1 billion vehicle focused on performing, privately originated credit investments in the region.
OTHER INVESTMENT NEWS
Australian industry super fund, Hostplus has awarded Bell Asset Management a $321 million (A$500 million) global small and mid-cap equity mandate.
The Australian superannuation fund expects that the strategy will add resilience to Hostplus' asset class structure amid the increasing market uncertainty, according to Hostplus chief executive David Elia.
Bell AM’s core focus is on its global equity capabilities; it's small and mid-cap strategy has outperformed the MSCI World SMID Cap index by +5.3% per annum over the past five years and returned 12.2% per annum since its inception in 2003.
Bell AM argues that the global small and mid-cap asset class is less risky than emerging markets investment and has better fundamentals.
Source: Bell Asset Management
Ivanhoé Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec (CDPQ), has committed close to $640 million (A$1 billion) to Scape Core Program, according to an announcement on October 27.
The venture holds the largest and pre-eminent student housing portfolio in Australia, with 27 buildings and over 13,000 beds, predominantly located in Sydney and Melbourne. Current investors in Scape Core Program are other global investors such as APG, Allianz, Bouwinvest and AXA.
The student housing sector in Australia is seeing a strong recovery this year, following full reopening of the international borders in February 2022, with the number of international students applying for visas hit an all-time record in June.
Ivanhoé Cambridge is positive on the Australian student housing sector and Scape’s fully integrated residential-for-rent platform. In Australia, it has a keen interest in the residential sector and has made recent investments into the built-to-rent and disability housing space.
Source: Ivanhoé Cambridge
US public pension funds are splintering in their approach to China, reflecting rising investment risks and the increasingly fractious politics of the two largest global economies.
Retirement plan officials are staking out a range of positions. California State Teachers' Retirement System (CalSTRS) launched in late August a search for its first dedicated China stock managers, whileTeacher Retirement System of Texas is cutting its China stock allocation by half. Florida Retirement System earlier this year halted new investment strategies in China, citing past crackdowns on education and tech companies.
It isn’t just Chinese politics that pension managers are worried about. A large Midwestern pension fund opted against several investments in Chinese private debt in 2019 and 2020 because investment managers worried they might have to sell at a loss if state or federal lawmakers added new restrictions on Chinese investments, according to a person familiar with the matter.
Source: Wall Street Journal
Ping An Insurance, China’s second-largest insurer by market value, posted a 31.5% drop in third-quarter profit as a stock-market slump hurt investment returns and an economic slowdown hampered sales.
Net income fell to 16.2 billion yuan ($2.3 billion) in the three months ended September 30, the Shenzhen-based company said in a filing to the Shanghai Stock Exchange October 26. That compares with a 3.9% gain in the first half, and a 22% decline projected by China International Capital Corporation analysts led by Mao Qingqing.
Wealthy Chinese are pulling the trigger on exit plans from their homeland as pessimism builds over the future of the world’s second-largest economy under Xi Jinping and the ruling Chinese Communist party.
David Lesperance, a Europe-based lawyer who has worked with wealthy families in Hong Kong and China, says Xi extending his rule beyond two terms is a tipping point for the country’s business elite, who thrived for decades as China’s economy boomed.
“Now that ‘the chairman’ is firmly in place . . . I have already received three ‘proceed’ instructions from various ultra-high net worth Chinese business families to execute their fire escape plans,” Lesperance said.
Source: Financial Times
Investcorp, the Middle East’s largest alternative asset management firm, and the private equity arm of the Fung brothers’ family office are setting up a $500 million fund to invest in mid-cap companies across China’s Greater Bay Area.
The fund will mainly focus on buyouts of firms in or close to the region that spans the Chinese cities of Hong Kong and Macau. Although it won’t be sector-specific, the fund will invest in companies “with proven profitability and strong growth potential,” Bahrain-based Investcorp said in a statement.
A historic selloff in Hong Kong stocks has dealt a blow to the nest eggs of the city’s millions of workers, saddling them with losses of about $8,000 each that may take years to recover.
The Mandatory Provident Fund (MPF), Hong Kong’s official pension system, shed about HK$286 billion ($36.4 billion) this year as of Monday, or HK$62,400 per member, according to researcher MPF Ratings. That puts the MPF’s year-to-date loss at around 24%, on track for its worst annual performance since 2008.
Japanese life insurers plan to buy more super-long Japanese government bonds (JGBs), enticed by the highest yields since 2014. Nippon Life, Japan Post Insurance and Sumitomo Life are among the insurers that have detailed their investment plans for the rest of the fiscal year-ending April.
A common theme has been an intention to increase holdings of the longest-maturity JGBs, centered on the 30-year securities, which now offer "attractive" yields as well as being a safe haven from a long list of market uncertainties globally.
Many insurers also plan to shift some money from currency-hedged holdings of foreign bonds into yen bonds, with hedging costs soaring.
Both National Pension Service (NPS) and sovereign wealth fund Korea Investment Corporation (KIC) are looking to increase exposure to secondaries within private equity in the current volatile global markets.
Along with direct lending, the strategic alternative investment head at NPS believes that secondaries will provide capital and liquidity solutions amid increasing market volatility.
KIC’s private equity team’s senior director sees secondary and deep value investments as attractive, as high-quality funds with large discount rates may hold great potential.
Likewise, Kyobo Life is also looking for opportunities in secondaries, as it continues to invest in senior debt, the insurer’s head of alternative investment head said.
Kyobo Life primary looks the US direct lending market, but also keeps an eye on Europe.
Source: Korea Economic Daily
Korea's financial authorities called for cooperation from institutional investors to refrain from stock trading that could heighten market swings.
The Financial Services Commission, the Financial Supervisory Service and the finance ministry held a hastily arranged meeting October 27 in Seoul with officials from around 10 major institutional investors, including National Pension Service (NPS), Teachers' Pension and the Land and Housing Corp.
The request came as financial market volatility has been mounting in the wake of a recent default on a municipal government-guaranteed debt raised to fund the construction of the Legoland theme park in the eastern province of Gangwon.
Source: Yonhap News Agency
Malaysian Government-owned fund manager Permodalan Nasional Berhad (PNB) planned to vote against IOI Corp Berhad's proposal in the annual general meeting (AGM) on Monday October 31 to authorise IOI Corp's directors to allot and issue shares, due to insufficient disclosure on the matter.
"[There's] insufficient disclosure of the purpose and planned utilisation of proceeds from the proposed share issuance," PNB said in a statement.
Source: The Edge Markets
Temasek is making its biggest management changes since Dilhan Pillay took over as chief executive officer at the Singapore investment giant a year ago.
Chief financial officer Leong Wai Leng will step down after more than 16 years in the role, with deputy CFO Png Chin Yee set to succeed her on January 1, according to a statement in response to a Bloomberg News query. President Tan Chong Lee is stepping down to lead investment unit 65 Equity Partners. General counsel Pek Siok Lan will go on sabbatical and take up a new role in July.
A consortium including GIC and IK Partners has acquired Unither Pharmaceuticals, a leading European pharmaceutical contract development and manufacturing organisations.
APG Investments Asia Limited (APG) and CapitaLand Investment Limited (CLI) have entered into a joint venture to establish an Asia-focused self-storage platform.
APG and CLI have committed an initial equity investment of $404 million (S$570 million) with an option to increase their investment up to $800 million (S$1.14 billion), in the proportion of 90:10, to fund the acquisition of Extra Space Asia (ESA) and its expansion needs.
ESA is one of Asia’s largest self-storage businesses with about 70 owned and leased facilities across six of the region’s gateway cities – Hong Kong, Kuala Lumpur, Seoul, Singapore, Taipei and Tokyo – with more than 70% of its net property income being generated in Singapore.
Post-acquisition, the company will be repositioned into an operating company/property company structure to facilitate future expansion.
Taiwan insurance firms’ pre-tax profit plunged 50.6% to NT$187.1 billion ($5.78 billion) in the 12 months to September as the selloff in global stock markets wiped out two-thirds of the value of their portfolios.
The firms are also raising their foreign exchange reserves to hedge against the local dollar’s decline against the greenback, which has strengthened to multi-year highs against many currencies as the US Federal Reserve raises interest rates to fight inflation.
The pre-tax profit of Taiwan’s 23 life insurers shrank 17.3% to NT$297.5 billion over the last 12 months from NT$359.7 billion in the 12 months to September 2021, while the 23 non-life firms swung to a pre-tax loss of NT$110.4 billion from a profit of NT$19 billion, the Financial Supervisory Commission (FSC) said in a brief statement on October 25.
Source: Asia Asset Management