Weekly Digest: UniSuper buys logistics portfolio from NPS; Korean investors commit to Europe PE
TOP NEWS OF THE WEEK
Korea's National Pension Service has sold its 50% stake in a Dexus industrial property portfolio in Australia to the local superannuation fund UniSuper.
Unisuper has acquired 50% ownership in the 340K sqm industrial property portfolio comprising 20 assets across Sydney and Melbourne, in a deal worth over A$500 million ($335 million). UniSuper will invest alongside existing co-owners Dexus and Blackstone in this venture.
Of the 20 portfolio assets, 12 are located in the Quarry Industrial Estate in Greater Western Sydney, while the remaining eight assets are situated in the industrial market of Truganina, Melbourne. The acquisition was negotiated on behalf of UniSuper by real estate investment management firm Richmond Bridge under an industrial property investment mandate.
Source: UniSuper https://www.unisuper.com.au/about-us/media-centre/2023/unisuper-expands-industrial-portfolio-with-acquisition-of-prime-assets
The National Pension Service (NPS), has committed €650 million ($717 million) to European private equity manager CVC Capital Partners’ €26 billion fund, sources familiar with the matter said on July 27.
NPS and other Korean institutional investors, including the Korean Teachers’ Credit Union (KTCU), Samsung Life Insurance and Samsung Fire & Marine Insurance, have joined CVC Capital Partners IX which announced the final close on July 20, exceeding its target €25 billion. The fund targets private equities in Europe and the Americas.
KTCU has committed €50 million to the fund, and the two insurers of Samsung Group are understood to have respectively pledged €50 million-€100 million investment, sources said. NPS and KTCU have both invested in the Luxembourg-based private asset managers’ previous funds.
Source: Korea Economic Daily
OTHER INVESTMENT NEWS
AUSTRALIA
UniSuper has appointed NorthStar Impact as a specialist external listed equities manager. NorthStar focuses on investment opportunities that seek to contribute to positive social and environmental outcomes, alongside financial outcomes. The portfolio will sit within UniSuper’s sustainable balanced and sustainable growth investment options.
NorthStar Impact invests in listed companies in Australia and New Zealand whose core business activities seek to address social and environmental challenges, with the aim of generating measurable outcomes alongside financial returns.
Its investment process begins by defining issues based on the United Nations Sustainable Development Goals. Core focus areas include affordable housing, education, health care, land and resource management, and renewable energy generation and storage.
Source: UniSuper
HONG KONG
Hong Kong Monetary Authority’s (HKMA) Exchange Fund posted a return of HK$110 billion ($14.1 billion) in the first half of this year versus a HK$144 billion loss over the same period last year, the city’s de facto central bank announced on July 25.
The return was driven by bonds and non-Hong Kong equity investments, which generated HK$58 billion and HK$48.5 billion, respectively, in the first six months of 2023. Hong Kong equities were in the red with HK$4.8 billion loss.
“Looking ahead, we are not overly optimistic about the investment outlook for the rest of the year. Although global economy has demonstrated resilience to the rapid rate hikes of major central banks, the possibility of continued monetary and credit tightening in the banking sector leading to economic recession is still uncertain,” said Eddie Yue, HKMA’s chief executive.
Source: Hong Kong Monetary Authority
Total Mandatory Provident Fund (MPF) assets amounted to HK$1.11 trillion ($142.3 billion) as at the end of March 2023, including HK$851 billion (77%) of net contributions, while net investment returns stood at HK$258 billion, according to the annual report Mandatory Provident Fund Schemes Authority (MPFA) released on July 30.
The total assets were down from HK$1.12 trillion a year ago.
Notably, there were 68,000 tax-deductible voluntary contribution accounts with a total contribution amount of HK$8.59 billion, jumping one-third from a year ago, while the total tax-deductible voluntary contribution (TVC) accounts number was 68,000, rising by about 10%.
Source: Mandatory Provident Fund Schemes Authority
KOREA
Teachers’ Pension Korea is seeking domestic private equity fund managers.
The pension fund is looking to allocate up to W400 billion in four separate mandates of up to W100 billion each. To be considered, managers should manage portfolio above W500 billion, with at least 30% of capital raised from institutional investors.
The deadline for submission is August 16, with the final selection by end-September
Source: Teachers’ Pension
The Korean government will legislate the dispersion of the payment period for corporate retirement pension contributions and encourage companies to diversify the maturity dates of their retirement pension funds.
The decision, which was made during a meeting held by the Financial Services Commission (FSC) on July 26, comes in response to concerns that a single transfer of more than W100 trillion won ($78.4 billion) may lead to fierce competition among financial institutions and short-term liquidity crisis.
Retirement pension providers usually allocate the contributions paid by companies to bonds, stocks, and other assets for management. The problem is that the maturity of the plan period is usually annual and that corporate contributions are concentrated mainly in December.
This means that a significant amount of money from maturing pension funds and new contributions, ranging from tens of trillions of won to nearly W100 trillion could move to products that offer higher returns.
Source: Maeil Business News
Korea’s Trade, Industry and Energy Minister Lee Chang-yang and 42 domestic corporate venture capitals (CVC) met on July 24 to launch a CVC alliance and unveiled plans for a joint public-private initiative to accumulate over W8 trillion ($6.27 billion) in a CVC fund by 2025.
W7 trillion of the fund will be provided by a coalition of 42 VC units within local corporations while the Korean government will stump up the remaining W1 trillion.
According to the government, the CVC Alliance will accelerate the backing of startups and consequently boost research and development efforts within the country’s corporate sector. The government also intends to ease regulations for CVCs and promote more private-sector participation in government-backed R&D projects.
Source: Korea Ministry of Trade, Industry and Energy
SINGAPORE
GIC has scaled back a core quantitative unit set up in 2016 under former Goldman Sachs Group banker Percy Wong, following a “tough” internal rethink of its investment teams and strategies.
The Systematic Investment Group, which had about 30 staff earlier this year, is being reorganised with some team members reassigned to different units while others are leaving to join external quant firms, according to people familiar with the matter. Wong, who joined GIC in 2012, is also poised to leave.
“The large majority of the existing team members will remain in GIC and continue to integrate quant skillsets into the business,” a GIC spokesperson said in a statement. “We expect fewer than 10 members to leave.”
Source: Bloomberg
Singapore and the UK plan to bolster their cooperation in sustainable finance to support the transition of economies to net zero.
They held the 8th UK-Singapore Financial Dialogue in London on July 26. The dialogue identified opportunities for further collaboration on joint projects, in priority areas such as sustainable finance and FinTech and innovation.
Source: Monetary Authority of Singapore
PHILIPPINES
The Philippines’ Government Service Insurance System (GSIS), which manages the retirement savings of civil servants, is considering investing in sustainable agricultural projects to help boost food security.
According to the pension fund, its president and general manager Wick Veloso discussed the matter with Leocadio Sebastian, a senior official at the agriculture department.
“GSIS is looking at investing in sustainable agricultural mechanisation that takes into consideration farming tools which are environment-friendly, reasonably priced, and adaptable to local conditions and durable,” it says in a statement on July 28.
Source: GSIS