Weekly Digest: HK wealth fund ready to invest; QIA buys stake in Chinese fund house
TOP NEWS OF THE WEEK
Hong Kong Investment Corporation (HKIC) which manages HK$62 billion ($8 billion) of funds, will make its first batch of investment in start-ups in June.
“We will make our first batch of direct investment or co-investment this month in a number of start-ups in three major sectors – hard and core technology, biotechnologies, and new energy and green technologies,” said Clara Chan Ka-chai, CEO of HKIC, in her first interview after taking the role in October.
A potential candidate in the first batch of investments will be a home-grown unicorn Smartmore, an artificial intelligence (AI) player, according to a source familiar with the situation who declined to be named as the deal is private.
Source: SCMP
Qatar Investment Authority (QIA) has agreed to buy a 10% stake in China's second-largest mutual fund company, two sources said, underscoring Beijing's increasing ties with the Middle East amid rising tensions with the West.
Qatar's proposed investment in China Asset Management (ChinaAMC) comes amid a flurry of activities between China and Gulf countries to deepen political, economic and financial ties, as geopolitical tensions heighten around the Gaza War and the Russia-Ukraine conflict.
In separate news, QIA is also looking at expanding investments in Japan, specifically sectors like semiconductors, manufacturing, real estate, and finance.
The sovereign wealth fund "has more than doubled its investments in Japan" since 2021, when it opened a Singapore office as a base for expanding in Asia, Abdulla Ali al-Kuwari, who leads QIA’s Asia-Pacific advisory office, said, declining to give specific figures for investment targets.
Source: Reuters; Nikkei Asia
OTHER INVESTMENT NEWS
AUSTRALIA
QIC and IFM Investors, leading Australian infrastructure fund managers, have secured a landmark A$700 million renewable energy agreement for assets in their portfolio.
The deal, structured in three stages, will see major infrastructure players such as Port of Melbourne, Sydney Airport, Adelaide Airport, and Lochard Energy receive 500 GWh of renewable energy annually.
This initiative marks Australia's largest multi-asset, multi-state power purchase agreement (PPA).
IFM Investors is owned by Australian pension funds.
Source: QIC
Brighter Super, a Queensland-based superannuation fund managing over A$30 billion ($20 billion) in assets, selected State Street as its custodian and administrator.
State Street will service Brighter Super's more than 130 portfolios, spanning multiple asset classes including equities, fixed income, private assets, and derivatives.
The scope of services includes custody, administration, fund accounting, investment services, and more.
Source: State Street
CHINA
More than 60 million people have opened private pension accounts since the introduction of China's private pension system in late 2022, data from the Ministry of Human Resources and Social Security showed.
Data also revealed that middle- and high-income groups aged from 31 to 40 have showed the strongest interest in opening such pension accounts and purchasing products to prepare for their retirement in advance and enjoy tax incentives.
Source: Xinhua
HONG KONG
Billionaire Richard Li has revived plans to list pan-Asian insurer FWD Group in Hong Kong, said three people with direct knowledge of the matter, after regulatory delay and market volatility scuppered previous attempts to take it public.
Hong Kong-headquartered FWD could target a valuation of up to $9 billion in the initial public offering (IPO) depending on financial market conditions when launching the deal, one of the people said.
Source: Reuters
JAPAN
Meiji Yasuda Life Insurance sees room for yields on long-maturity Japanese government bonds to rise further and will keep purchases of the securities to a minimum for the time being.
It is “quite conceivable” that the yield on 10-year debt will double to about 2% over the next few years, said Kenichiro Kitamura, general manager of the investment planning and research department at the Meiji Yasuda Life.
The yield on 30-year bonds may climb to about 2.5%, from around 2.2% now, he said.
“The stage we are at is buying the minimum necessary amount. We’re not thinking of getting serious about it yet," said Kitamura.
Source: Bloomberg
Japan Post Insurance is hesitant about buying most domestic super-long bonds, due to concern that the central bank’s reduction of debt purchases may weigh on the market.
“Yields on super-long-term bonds have risen to attractive levels,” said Hiroyuki Nomura, senior general manager of Japan Post’s investment planning department.
Government bond yields have been climbing in recent weeks on expectations that the Bank of Japan will further cut monetary stimulus.
Source: Bloomberg
KOREA
Korea Investment Corporation (KIC) has decided to outsource the handling of global equity funds to domestic asset management firms for the first time. It has been confirmed that KIC has allocated a budget of up to $400 million for this purpose.
The sovereign wealth fund has recently selected four domestic asset management firms – Mirae Asset, KB, Kiwoom Investment, and Hana Asset Management – to manage global equity funds, according to the financial investment industry on June 9.
Source: BusinessKorea
The Yellow Umbrella Mutual Aid Fund appointed Suh Won-cheol, a former MG Non-life Insurance asset management head, as the new CIO last week, banking sources said on June 5.
He will serve a two-year term with a chance to extend in one-year increments based on performance.
Prior to MG Non-life, Suh headed the alternative investment division of Government Employees Pension Service (GEPS) for six years from 2013.
The mutual aid fund aims to allocate 29.8% of its assets under management (AUM) to alternative investment this year from 26.5% as of end-2023.
Source: Korea Economic Daily
NEW ZEALAND
The New Zealand Superannuation Fund (NZ Super Fund) has expanded its relationship with Northern Trust, selecting the firm to provide data services through its Data Warehouse Solutions offering.
NZ Super Fund sought a solution to consolidate data from various sources and enhance scalability as part of its transition from legacy technology.
Source: Northern Trust
SINGAPORE
Singapore's sovereign wealth fund, GIC, alongside co-investors AviAlliance and CDPQ, have sold their stake in Budapest Airport to a consortium comprising Hungary's state-owned Corvinus Zrt. and France's Vinci Airports in a deal reportedly worth €4.3 billion ($4.6 billion).
Prior to the sale, the airport was owned by AviAlliance (55.4%), a subsidiary of PSP Investments; Malton (23.3%), a subsidiary of GIC; and CDPQ (21.2%).
During their ownership, the consortium invested over €700 million in the airport, driving significant passenger growth and infrastructure improvements.
Source: PSP Investments; IPE Real Assets
THE PHILIPPINES
The Philippines’ Social Security System (SSS) has more than quadrupled investments in real estate investment trusts this year.
The pension fund for private sector employees has invested 6 billion pesos ($100 million) into almost all of the REITs that are now available in the Philippines, with more than three-quarters of the investments made this year, according to SSS President and Chief Executive Officer Rolando Macasaet.
The trusts’ yield of about 8% would “significantly boost the SSS investment portfolio”, he said in a statement on June 3.
Source: Asia Asset Management
The above briefs were curated from third-party sources and news releases.