Sovereign Wealth Fund Institute

Agricultural lands in some American states are at near highs due to a rising global demand of food. TIAA-CREF, a U.S. based financial services group, is partnering with European and Canadian institutional investors to create a $2 billion global farmland investing company. Public investors want exposure to agriculture and to the global food chain. The [...]

Under the direction of HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Investment Corporation of Dubai (ICD), a sovereign wealth fund owned by the Government of Dubai, signed a memorandum of understanding (MoU) with Samsung Life Insurance. Samsung Life Insurance is a South Korean-listed life insurer and part of the [...]

The Qatar Investment Authority (QIA) is preparing to purchase a 3 to 5% stake in Royal Dutch Shell Plc. Shell is Europe’s largest oil company. The Qatar Investment Authority is bullish on real assets such as commodities. In recent days, it has steadily increased its holdings in Xstrata Plc. Shell’s $18.5 billion Pearl natural gas-to-liquids [...]

Sovereign wealth funds (SWF) are a major topic of discussion for a myriad of countries, states, and provinces. These funds may also be labeled legacy funds, stabilization funds, or permanent funds. Sovereign funds can improve a state’s economy in several unique ways. It can also cause economic malaise in a country if not structured properly. [...]

The Industrial and Commercial Bank of China Limited (ICBC), China Investment Corporation, and Central Huijin Investment Ltd. received approval from the Federal Reserve on Wednesday to acquire shares of a bank unit. ICBC is on a campaign to acquire overseas assets to reduce exposure in the domestic market. In addition, Chinese banks are eager to [...]

This interview will appear in the 2Q Y2012 issue of the Sovereign Wealth Quarterly. This is a Q&A with Bruce Cundick, Chief Investment Officer of the Utah Retirement Systems. He is responsible for directing the overall operations of the Investment Department. He manages all aspects of investment functions for all plans. This Q&A will be [...]

According to the press release, “Cheniere Energy, Inc. announced today that Temasek and RRJ Capital have agreed to make an equity investment in aggregate of approximately $468 million in Cheniere. Cheniere intends to use the proceeds from this offering and cash on hand to purchase, on a pari passu basis, $500 million of the $2 [...]

French Socialist Francois Hollande was elected President of France. Mr. Hollande is France’s first Socialist president in 17 years and institutional investors are concerned since he calls for less austerity. At the same time Greek votes migrated to political parties who professed an anti-bailout dogma. From a public investor standpoint European sovereign risk will be [...]

Is it optimal to invest in a private equity fund, invest in the private equity firm, or both? Sovereign funds and public funds have done it all. Over the years, we have seen deals like the China Investment Corporation’s investment in the Blackstone Group. We have seen CalPERS and Mubadala Development Co. invest in the [...]

Kuwait is the number four oil producer in the Organization of Petroleum Exporting Countries (OPEC). In addition, compared to other members of the Gulf Cooperation Council (GCC) it ranks near the bottom in foreign direct investment (FDI). Other countries have been large recipients of FDI which has helped further spur their domestic development, especially in [...]

Temasek Holdings, one of Singapore’s sovereign wealth funds lowered its stakes in Chinese banks by selling off shares worth $2.48 billion. Temasek Holdings sold shares of China Construction Bank (1.6 billion shares) and the Bank of China (3.079 billion shares). This is after Temasek increased their stake in ICBC Bank in the middle of April [...]

In Brussels, the China Investment Corporation (CIC) and Belgium’s Federal Holding and Investment Company (SFPI/FPIM) signed an agreement launching the China-Belgium Mirror Fund. The SFPI/FPIM is a limited company in which 100% of the capital is owned by the Belgian Federal Government. The SFPI/FPIM is the manager of the federal government’s shareholdings. It works with [...]

The investor class of sovereign wealth funds has now crossed the US$ 5 trillion mark. SWF assets are now at US$ 5.004 trillion. Sovereign wealth funds as an investor class continues to grow due to a variety of factors including investment performance, resource tax transfers, and the proliferation of new sovereign funds. See Fund Rankings

According to the press release, “The New Zealand Superannuation Fund confirmed today that it and global investment firm GMO Renewable Resources were in discussions with Harvard Management Company over the possible purchase of Harvard’s majority stake in the Kaingaroa forest estate. Harvard currently holds a 60% stake in Kaingaroa, an estate of approximately 170,000 hectares [...]

Polyus Gold International Limited, the biggest gold producer in Russia, announced that its indirect, wholly-owned subsidiary, Jenington International Inc., has entered into separate agreements to sell in privately negotiated transactions. Polyus Gold International Limited is quoted to have the third largest gold reserves in the world. 151,607,496 ordinary shares, which represent 5% less one share [...]

Barclays has a unique, long-term relationship with investment entities in Qatar; one of the funds is a major shareholder of Barclays. The Qatar Investment Authority (QIA) is banking on commodities as an attractive asset class. By 2016 or 2017, the QIA expects a supply-demand gap in commodities. Qatar Holding has gradually been increasing ownership in [...]

According to the press release, “During a meeting held today as part of the China-Russia Investment and Trade Forum, First Deputy Prime Minister of Russia Igor Shuvalov and Executive Vice-Premier of the State Council of China Li Keqiang announced the dates to create the Russia-China Investment Fund and outlined the sectors earmarked for the first [...]

The low return environment in fixed income has pumped up demand for core real estate assets. Income producing properties are in major demand for sovereign wealth funds and other long-term public investors. In December 2011, the New Mexico State Investment Council (NMSIC) modified its investment allocation. [Content protected for Sovereign Wealth Fund Institute Standard subscribers [...]

According to the press release, “OMERS, one of Canada’s largest pension plans, is announcing the first close of the Global Strategic Investment Alliance (GSIA) alongside initial alliance members Pension Fund Association (PFA) and a consortium led by Mitsubishi Corporation (MC), both of Japan. “We’re very pleased to be partnering with these sophisticated investors in pursuit [...]

The European Financial Stability Facility (EFSF) is gaining traction among central banks and sovereign funds outside of Europe again. In the past few EFSF issues, the response in this investor class has been tepid. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

China’s sovereign wealth fund, the China Investment Corporation (CIC) is in discussion with Blackrock to launch a joint China-focused investment fund. No exact fund strategy has been detailed to the public. Some possible investment strategies could include a fund that invests in China or invests in companies that would have a tangible effect in China [...]

Monday, April 23, 2012 Contact information: Carl Linaburg Phone:(415) 717-6912 Email: support@swfinstitute.org A delegation of global governmental executives involved in investing have come together to join the Institute Council of Investors. Types of council members include: sovereign wealth funds, public pension funds, central banks, government investment authorities and other governmental entities. Initial members include some [...]

Legislators and governments beware; generosity can kill the sustainability of American public pension funds. According to experts, this might be the first US public pension fund to file Chapter 11 bankruptcy protection. Last Tuesday, the Northern Mariana Islands Retirement Fund, Saipan filed for Chapter 11 bankruptcy protection. This is a restructuring of the public pension [...]

Qatar’s sovereign wealth fund now has a significant stake in a US public luxury company. The Qatar Investment Authority (QIA), who owns Harrods, now owns a 5.2% stake in Tiffany through Qatar Holding. Earlier, the QIA made an investment in LVMH for a 1% stake. Luxury goods are an attractive investment, since many emerging economies [...]

The State of Georgia Governor Nathan Deal signed the Employees’ Retirement System Enhanced Investment Authority Act. Effective July 1, this act will allow public retirement systems in the State of Georgia to “invest retirement system assets in certain types of alternative investments, private placements, and other private investments.” This is excluding the Georgia Teachers’ Retirement [...]

According to the press release, “the Canada Pension Plan Investment Board (CPPIB) announced today that it has entered into an agreement to acquire significant minority stakes in five major Chilean toll roads from the Atlantia Group. The agreement involves CPPIB acquiring a 49.99% interest in Grupo Costanera. CPPIB will commit an equity investment of 560 [...]

Temasek Holdings, Singapore’s sovereign wealth fund said it was purchasing US$ 2.3 billion worth of Industrial and Commercial Bank of China’s (ICBC) shares from Goldman Sachs. The amount of shares to be sold is 3.55 billion Hong Kong-listed shares. Temasek Holdings is continually realigning its financial portfolio after announcing plans to sell Indonesian bank Danamon [...]

According to the press release, “Boeing and Mubadala Aerospace today announced a 10-year direct contract for Strata Manufacturing, Mubadala Aerospace’s advanced composite aerostructures facility in Al Ain, to produce commercial composite aerostructures for the 777 and 787 Dreamliner. In addition, the companies announced a strategic agreement that positions Strata to be a future supplier of [...]

According to the press release, “The New York Fed today announced that it has initiated a competitive bid process in response to several reverse inquiries for the MAX CDO holdings in the Maiden Lane III LLC portfolio (ML III). The New York Fed has directed BlackRock Solutions, the investment manager for ML III, to conduct [...]

Being a big asset public investor has its downsides such as having the stress of more money to manage. In addition, it is also a major challenge to find enough feasible investments that can give a substantial positive return within a given level of risk. There are numerous advantages of being a big sovereign wealth [...]

According to the press release, “Qatar Holding announces it has signed a definitive agreement to acquire Smeralda Holding, owner of luxury hotel resorts on Costa Smeralda in Sardinia, from Colony Capital, the US-based real estate investment firm. Under the terms of the agreement, Qatar Holding will acquire a portfolio consisting of four luxury hotels (Cala [...]

The sheer size and reach of sovereign wealth funds steered government policymakers’ attention. In 2007, politicians asserted, “how can these governments buy up our prized national assets?” In 2012, the message was “will they buy our bonds now?” The protectionist attitude towards sovereign wealth funds has changed dramatically and it wasn’t because of the Santiago [...]

Public investors are embracing private equity in 2012. Numerous studies have shown that generally, private equity buyout funds over the past 30 years have performed better than public stocks. Sovereign wealth funds have increased allocation to private markets. Australia’s Future Fund nearly tripled its share of investment in private equity since the global financial crises. [...]

Malaysia’s Khazanah Nasional Berhad increased its stake in Acibadem Saglik Hizmetleri & Ticaret AS to 97.3% from 92%. Acibadem Saglik Hizmetleri & Ticaret AS is Turkey’s biggest private hospital chain that also operates outpatient clinics, medical centers, and laboratories. Khazanah Nasional Berhad has been a big buyer on healthcare investments in the Islamic world. It [...]

The Qatar Investment Authority (QIA) is willing to invest US$ 10 billion in India over the next couple of years. India has attracted sovereign wealth dollars, but not nearly at the pace that China has. India’s investment market is complicated and riddled with government investment regulations. Sovereign wealth funds and other foreign institutional investors have [...]

Qatar Holding LLC, a sovereign wealth enterprise (SWE) of the Qatar Investment Authority (QIA), now has a 5% position in Xstrata PLC shares. Globally, Xstrata has mining projects in areas such as coal, copper, nickel, and zinc. Xstrata PLC is planning a £50 billion merger with Glencore. Glencore already owns 33.6% of Xstrata and Blackrock [...]

Creating a successful public investor organization that can implement profitable direct investment programs is a daunting mission. From Canada, OMERS is a public investor that has an asset allocation policy that believes that greater exposure to private market investments will generate robust, probable returns. This has not worked well for many public pensions; however, OMERS [...]

Aabar Investments, through its unit Aabar Real Estate, has doubled its position in Arabtec to 10.45%. It is the biggest shareholder of Arabtec. In terms of market value, Arabtec is the largest builder in the United Arab Emirates. Aabar Investments is owned by International Petroleum Investment Company (IPIC). It was delisted from the Abu Dhabi [...]

Singapore sovereign wealth fund Temasek Holdings and private equity firm RRJ Capital purchased almost half of the shares of the US$1.34 billion offering by PetroChina Company Limited’s unit Kunlun Energy Company Limited. PetroChina Company Limited is the controlling shareholder of the company. Kunlun Energy is incorporated in Bermuda and is involved in the natural gas [...]

Natural gas fields will fuel the future sovereign wealth fund of Israel. With the recent discoveries of natural gas fields, Israel could become a net energy exporter in the next 5 to 7 years. The taxation of natural resources has been discussed in the Israeli Government and a plan has been put into place to [...]

According to the press release, “Korea’s official foreign reserves as of the end of March 2012 amounted to 315.95 billion dollars, an increase of 0.15 billion dollars from 315.80 billion dollars at the end of the preceding month. This gain was attributable mainly to an increase in the operating profits on the reserves, offsetting decreases [...]

Egypt’s borrowing costs have soared since foreign investors discarded $7.5 billion of government debt that followed the protests and revolution. Egypt has sold 10-year bonds for the first time since the start of the revolution. It sold them at an average yield of 17.03%. The auction was not much in terms of size, 1 billion [...]

Italy along with other European nations are trying to convince countries with major current account surpluses to further investment in their government bonds and/or the Eurozone bailout funds. Italian Prime Minister Mario Monti has passed a series of spending cuts, tax increases, and pension reforms to cut Italy’s mega public debt pyramid. It is a [...]

Asian holdings make up a major portion of Temasek’s investment portfolio. DBS Group Holdings Ltd. (DBS) will purchase PT Bank Danamon Indonesia for 45.2 trillion rupiah ($4.9 billion) from Temasek Holdings for its 67% stake. The bank stake is held by Temasek’s sovereign wealth enterprise (SWE) Fullerton Financial Holdings Pte. This is one of the [...]

In 2007, Canadian banks were better capitalized than their southern neighbors and in Canada subject to tighter regulation and supervision. Canadian banks did not need taxpayer bailout capital, like the United States or England. There has been a major push especially from the Canadian life insurance sector to allow sovereign wealth funds both foreign and [...]

Launched in 2011, OMERS Ventures is up and running and made a $20 million investment in HootSuite. It is a secondary purchase from the company’s existing shareholders. It is one of the largest Canadian secondary venture capital deals in the past ten years. Early investors in HootSuite include Hearst Interactive Media, Blumberg Capital, Millennium Technology [...]

According to the press release, “The National Treasury Management Agency and CIC International, a subsidiary of China Investment Corporation, China’s sovereign wealth fund, have today signed a memorandum of understanding to work together in exploring investment opportunities in Ireland. The memorandum was signed in the Great Hall of the People in Beijing by Chairman Lou [...]

The Mubadala Development Company and Mr. Eike Batista, the founder of EBX Group of Brazil, today announced the signing of a strategic partnership agreement. Mubadala will make a US$2 billion primary investment in exchange for a 5.63% preferred equity interest in Centennial Asset Brazilian Equity Fund LLC (CABEF) and other offshore holding companies of Mr. [...]

Natural gas is gaining tremendous traction among many nations as a viable alternative to oil, especially with the discovery of new extraction and transportation technologies. Sovereign wealth funds and state-owned companies, particularly in Asia and the Middle East are hedging their bets on natural gas and other forms of fuel besides crude oil. Some notable [...]

Baseball is a popular sport in Japan and Singapore’s GIC invested capital into an entertainment complex in Fukuoka City a few years ago. Fukuoka City is a major city on the Japanese island of Kyushu. In April 2007, the GIC Real Estate Pte Ltd (GIC RE) acquired Fukuoka Hawks Town from Colony Capital. Singapore’s GIC [...]

Norway’s Government Pension Fund Global (GPFG), the US$ 611 billion sovereign wealth fund in Europe, cut half its assets managed by external managers in 2011. That ratio is expected to remain low in the future and an expectation of smaller mandates. In addition, Norway’s GPFG only uses one external fixed income manager, Blackrock to manage [...]

South Africa is a major producer of coal, platinum, gold, and chromium. Resource nationalism is a growing trend in Africa and other parts of the world. It is in between full nationalization and total privatization. Countries and states are determining on how they can benefit from increase findings and extraction of mineral wealth. The African [...]

According to the press release, “The Minister of Finance, Her Excellency Emilia Pires, and the Governor of the Central Bank of Timor-Leste, Mr Abraão de Vasconselos, announced that following the revision of the Petroleum Fund law in 2011, significant progress has been made in implementing a new asset allocation of the Petroleum Fund. Based on [...]

Sovereign wealth funds have an appetite for British infrastructure assets, including airports and sewage. UK Prime Minister David Cameron is trying to figure out options to improve funding of roads. The United Kingdom like many debt-ridden European countries has limited resources in public financing besides issuing more debt. Prime Minister Cameron is paving the way [...]

China’s National Social Security Fund will invest CNY 5 billion (US$ 788 million) for an 8% stake in Cinda Asset Management Co. The NSSF will be the second largest shareholder behind China’s Ministry of Finance. Other investors include Citic Capital Holdings Ltd., UBS AG, and Standard Chartered PLC. Together with the NSSF the total capital [...]

According to the press release, “Khazanah Nasional Berhad (“Khazanah”) via its Special Purpose Vehicle (“SPV”), Broga Hill Investments Ltd., today acquired an 8.85% stake in John Keells Holdings Plc. (“JKH”), Sri Lanka’s largest listed conglomerate, in a deal worth RM366 million (LKR 14.5 billion). The JKH group has business interests in several key sectors of [...]

Norway’s Government Pension Fund Global (GPFG) returned -2.5% in 2011. This was mostly attributable to global stock market declines. Norway’s GPFG returned -8.8% in equities, while fixed income returned 7%. The sovereign wealth fund had exposure to government bonds from the United States, United Kingdom, and Germany which proved to be beneficial in 2011. With [...]

The press release states, “the Swiss National Bank (SNB) will continue to enforce the minimum exchange rate of CHF 1.20 per euro with the utmost determination. It is prepared to buy foreign currency in unlimited quantities for this purpose. The target range for the three-month Libor will remain unchanged at 0.00–0.25%. The SNB will continue [...]

The press release states, “Khazanah Nasional Berhad is pleased to announce the successful issuance of a seven-year benchmark exchangeable sukuk of USD357.8 million (“The Sukuk”), via an independent Labuan incorporated special purpose company, Pulai Capital Ltd., exchangeable into the shares of Parkson Retail Group Limited (“Parkson”), one of the largest department store operators in the [...]

The recent discoveries of massive oil reserves in North Dakota’s Bakken rock formation have given an economic jolt for the state. Oil sits underground in a shale rock formation extending across Canada’s Saskatchewan province, northeastern Montana and western North Dakota. This area is known as Bakken. With the utilization of hydraulic fracturing and high oil [...]