Weekly Digest: EPF eyes post-pandemic bets; AIA to invest $200m in impact funds
TOP NEWS OF THE WEEK
The Employees Provident Fund (EPF) recorded investment income of RM15.16 billion for the first quarter ended 31 March 2023, a 3% increase from a year ago.
EPF’s overall investment assets at the end of March grew to RM1.04 trillion, 37% of which was overseas investments. EPF’s overseas investments – mainly in equities -- continued to outperform and generated RM7.04 billion in income, equivalent to 46% of the total investment income recorded.
"Although Malaysia’s economy is projected by Bank Negara Malaysia to grow at a slower rate of 4.0% to 5.0%, lower than the 8.7% registered in 2022,EPF is not tempering its expectations as it believes there are performing sectors that the fund can capitalise on," the fund said in a press statement.
CEO Amir Hamzah Azizan said it is essential for EPF to consider "the broader market dynamics."
The remaining quarter will see the EPF focusing on industries and sectors that are expected to recover after three years of the pandemic, which, he added, would result in higher labour demand.
Source: EPF
Insurer AIA group plans to commit $200 milion to various funds managed by LeapFrog Investments, a UK-based impact investor with a signficant Asia footprint.
AIA’s allocationis one of the largest investments into portfolios trying to meet social or environment targets such as those in the UN’s Sustainable Development Goals.
The partnership with AIA marks the third-biggest mandate win for LeapFrog, which previously secured a $500mn commitment from Temasek and a $350mn allocation from US insurer Prudential Financial.
Source: Financial Times
OTHER INVESTMENT NEWS
AUSTRALIA
Australia's third-largest pension fund Aware Super put on hold new work with PricewaterhouseCoopers (PwC) Australia, the fourth fund to freeze out the firm over its misuse of confidential government tax plans.
The A$150 billion ($100 billion) fund has temporarily frozen new contracts with PwC "out of an abundance of caution" and was deeply disappointed by reported failures of governance, accountability and culture at the firm, a statement said.
So far four major funds that collectively manage around A$750 billion have paused work with the firm in a week, the others being HESTA, AustralianSuper and Australian Retirement Trust.
Source: The Guardian
HONG KONG
TikTok’s Chinese parent company ByteDance’s co-founder Zhang Yiming recently set up a venture investment fund in Hong Kong named Cool River Venture HK.
Cool River Venture was founded in late May, with Zhang as director, the Hong Kong companies registry showed. Digital asset and blockchain firm Galaxy is the fund’s sole shareholder.
The company will mainly invest in technology-related industries, according to a source.
Zhang stepped down as ByteDance’s chief executive in May 2021. Co-founder Liang Rubuo replaced him.
In his resignation letter, Zhang mentioned his interest in emerging technology fields, such as virtual reality, life sciences, and scientific computing.
Source: Yicai Global
INDIA
The Pension Fund Regulatory and Development Authority is expected to give approval to a minimum assured pension return scheme (MARS) by December-end in a bid to encourage enrollment in pension schemes.
Senthil Gunasekaran, chief business development officer of KFintech, a CRA (central recordkeeping agency) under the National Pension System offered some insight on how this scheme could be different from the existing NPS schemes and annuity policies.
“The scheme is expected to offer a floating rate of return that would reset annually, based on 10-year government security rates. Investors would have to pay a higher premium for assured returns,” Gunasekaran said, adding that the scheme would have a lock-in period of 10 years.
Source: Telegraph India
JAPAN
Life insurance company Japan Post Insurance has inked a new strategic partnership with investment firms KKR and Global Atlantic Financial Group.
Japan Post Insurance will additionally invest in a reinsurance co-investment vehicle sponsored by Global Atlantic.
The partnership gives Japan Post Insurance access to KKR and Global Atlantic’s platforms to enhance its growth and diversify its business portfolio into overseas markets.
As part of the mandate, Japan Post Insurance will invest in a reinsurance co-investment vehicle sponsored by Global Atlantic. The partnership is Japan Post Insurance’s first international venture.
Source: KKR
Da-ichi Life Insurance has committed ¥8.7 billion ($62.52 million) to the Prologis Japan Core Logistics Fund, a logistics facilities fund managed by logistics real estate fund manager Prologis.
The fund invests in operational logistics facilities in Japan. It is looking to acquire assets worth ¥240 billion yen in total.
The fund has already acquired two logistics facilities totaling around ¥30 billion yen in the Tokyo and Kansai regions, respectively.
Source: Dai-ichi Life
ABL Life Insurance and Woori Global Asset Management have committed a sizeable amount of capital to a first closing of a sustainable infrastructure fund managed by Ireland-based Rubicon Capital Advisors Ltd., according to a press release.
The fund’s target sectors include traditional transportation, energy transition, and social and healthcare infrastructure based on public-private partnerships.
Rubicon will use the fund for junior debt in mid-cap investment, ranging from €10 million to €50 million ($10.76 million to $53.82 million), across Europe and North America.
In the first closing, Rubicon secured nearly 20% of the fund, which targets €400 million-€500 million ($430.6 million to $538.2 million).
ABL Life, the Korean unit of China’s Dajia Insurance Group, manages more than W16 trillion ($12.43 billion) in assets including W3 trillion ($2.33 billion) in alternative investments.
Source: Rubicon Capital Advisors
Korea Post is looking to hire an asset manager with at least three years of experience managing environmental, social and governance (ESG) funds for a new domestic equity mandate focusing on social responsibility.
The investment is for its insurance unit and will be benchmarked against the Korea Composite Stock Price Index.
Firms bidding for the mandate must have ESG investment portfolios valued at W10 billion ($7.63 million) or above. Applications are open until June 16, while the winning firm will be hired by the end of July.
Source: Korea Post
Korea Post has announced the preferred bidders for two mandates for overseas multifamily residential real estate and domestic private mezzanine debt, respectively.
For the overseas multifamily residential real estate, US firms Pretium Partners and Greystar have been shortlisted. For the domestic private mezzanine debt, local Glenwood Credit and Dominus Investment have been shortlisted.
The final selections will be made after due diligence and investment reviews.
Source: Korea Post
MALAYSIA
Sovereign wealth fund Khazanah Nasional Berhad, under its Dana Impak mandate, recently led a series B fundraising round of a Malaysian homegrown insurance technology company, PolicyStreet, raising a total of $15.3 million.
PolicyStreet said its recent fundraising round also garnered strong support from other local and international investors, including Altara Ventures, Gobi Partners and Spiral Ventures.
PolicyStreet intends to use the funds to strengthen its technology and underwriting capabilities.
Source: Technode
TAIWAN
Cathay Life Insurance and Taiwan Life Insurance have agreed to commit a total of $176 million to four private equity funds, according to separate stock exchange filings.
Cathay Life, the insurance subsidiary of Taiwanese conglomerate Cathay Financial Holdings, has committed $60 million to the KPS Special Situations Fund VI A and another 80 million euros ($86 million) to CVC Capital Partners IX.
KPS Special Situations Fund XI A is looking at raising $8 billion for its latest main investment fund, with an upper limit of $10 billion.
CVC Capital Partners IX, on the other hand, seeks to raise about $25 billion and will invest in North America and Europe.
Source: Nikkei Asia