AUSTRALIA

Australia's largest superannuation fund, Australian Super, expects returns to be flat this year.

“At first blush it's disappointing, but when you consider the incredible gyrations in investment markets over the last three or four months, it's really an exceptional effort,” chief executive Ian Silk told News Breakfast in his first in-depth interview since the height of the coronavirus crisis.

Silk said the last couple of months had been “pretty rugged.” But now, he said, the business was back on a "quasi-normal" footing. Australia Super manages A$180 billion ($123 billion) on behalf of 2 million Australians.

Source: ABC News

Australia's pensions backed Square Peg Capital's latest funding round as the firm looks to boost investments in startups joining the wave of innovation sparked by the coronavirus.

AustralianSuper and Hostplus were among investors in Square Peg's A$350 million ($240.99 million) funding round targeting early-stage technology companies, the Melbourne-based firm said. The raise makes Square Peg Australia's largest venture firm, with more than A$1 billion under management, it said.

The fresh funds will help Square Peg back firms that are tapping the massive changes brought on by Covid-19, from increased online shopping and education, to shifts in healthcare and new work arrangements, said Square Peg co-founder and partner Paul Bassat.

Source: The Business Times

Hostplus chief investment officer Sam Sicilia defended investments in venture capital and other unlisted assets, saying cash is the riskiest asset class because it provides no returns.

The A$47 billion ($32.36 billion) industry fund has paid out A$1.3 billion in two months as part of the government's early release scheme and extreme market volatility has pushed its returns into negative territory, with the balanced option falling by 8.8% for the financial year.

However, Sicilia has doubled down on his strategy that includes allocating around A$1 billion to venture capital. Hostplus has the highest level of exposure to this asset class compared to any other super fund, with 2% of its total funds invested across more than 30 VC funds.

Source: Brisbane Times

CHINA

German insurer Allianz, which received approval to open China’s first wholly foreign-owned insurance holding company in Shanghai in January, does not see the Covid-19 pandemic greatly affecting its investment plans there.

“Through the holding company, we will further expand our business in China, including exploring into other vertical industries, such as insurance asset management and possibly other product lines in the future,” said Solmaz Altin, Allianz’s Asia Pacific chief executive, in an interview with local news platform JieMian.

However, the insurer will not return to the old model of doing business, he said. “The new digital process that filled the gap during this Covid-19 period will continue to exist and play a major role in insurance provision and purchase. New innovations will be applied.”

Source: Asian Insurance Review

AIA gained approval to convert its Shanghai branch into the first 100% foreign-owned life insurer in China. The China Banking and Insurance Regulatory Commission gave AIA the go-ahead over the June 20-21 weekend, in a sign that Beijing was widening foreign access to its insurance sector. 
 
The company has offices in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Jiangsu and Hebei, but before its incorporation, it could not expand beyond these locations without securing approvals first. Now, not only will the insurer wholly own its mainland Chinese subsidiary, it will also receive equal treatment in the world’s most populous insurance market.

Source: South China Morning Post

INDIA

The Department of Investment and Public Asset Management (Dipam) issued a request for proposal (RFP), seeking to engage pre-transaction advisers for a partial disinvestment of the government’s equity shareholding in the Life Insurance Corporation (LIC) through an initial public offering.

Such an IPO could include advising government on the necessary amendments needed to the LIC Act. Dipam proposes to engage up to two pre-IPO transaction advisers from "reputed professional consulting firms/ investment bankers/ merchant bankers/ financial institutions/ banks, independently (not in consortium) for facilitating or assisting Dipam in the preparatory processes leading to the IPO of LIC India".

Source: Live Mint

INDONESIA

PT Taspen's subsidiary, Taspen Life, has officially annexed 70% of Jiwasraya Putra's shares. Jiwasraya Putra is a subsidiary of PT Asuransi Jiwasraya (Persero).

"Taspen Life won the Jiwasraya Putra bidding where Taspen Life will own 70% of the Jiwasraya Putra shares and the other 30% is owned by BTN," Taspen president director Steve Kosasih told CNBC Indonesia on June 19.

Source: CNBC Indonesia

FWD Group agreed to invest in a significant minority stake in PT Asuransi BRI Life, the life insurance arm of PT Bank Rakyat Indonesia (Persero).

The Hong Kong-headquartered insurance group said that following the investment, BRI Life will enter into a 15-year life insurance distribution agreement with BRI.

FWD’s agreement to invest in BRI Life follows its recent acquisition of PT Commonwealth Life and the signing of a 15-year distribution partnership with PT Bank Commonwealth in Indonesia.

Source: Insurance Business

JAPAN

Japanese life insurers' positive investment spread may stall on lower global bond yields and a drop in dividend income due to the global recession after increasing by 33% year-on-year to ¥770 billion ($7.2 billion) in the financial year ended March 2020, said Fitch Ratings.

Underwriting may also be pressured in the 2021 financial year due to lower new business caused by pandemic-related social distancing measures and Japan's gradually contracting population, although overall underwriting profits are likely to remain stable, backed by the still moderately expanding profitable third (health) sector.

Source: Fitch Ratings

KOREA

Kim Yong-jin, who served as a vice finance minister of president Moon Jae-in’s government between mid-2017 and 2018, has been chosen as the National Pension Service’s (NPS) new chief executive, according to senior government sources.

The former senior bureaucrat will likely begin a three-year term as CEO of the $600 billion pension plan later next month at the earliest, after getting the nod from the welfare ministry and President Moon.

He will fill the post left vacant since Kim Sung-joo quit in January to run in April general elections.

Source: Korean Investors

MALAYSIA

The Employees Provident Fund (EPF) continued to allocate more money to external fund managers last year to boost its portfolio performance.

Malaysia’s largest pension fund, which manages over RM900 billion ($210.6 billion) in assets, had channelled RM132.4 billion to external asset managers in 2019 — a 12.6% increase of RM117.6 billion allotted in the preceding year. The funds under external managers accounted for about 14% of the EPF’s total investment assets.

EPF chairman Ahmad Badri Mohd Zahir, in a statement on June 18, said the money had been invested in both equity and fixed income instruments as part of efforts to diversify the state-linked fund’s assets.

Source: The Malaysian Reserve

MIDDLE EAST

Saudi Arabia’s Public Investment Fund (PIF) confirmed it will invest $1.5 billion into Jio Platforms to become the Indian telecoms firm’s 11th investor.

The institution, one of the world’s largest sovereign wealth funds, will buy a 2.32% stake in the Reliance Industries subsidiary, joining a list of investors that includes Abu Dhabi Investment Authority, another Abu Dhabi fund Mubadala and Facebook.

Mukesh Ambani, owner of Jio and Asia’s richest man, has now raised $15 billion in the mobile giant and sold off almost a quarter of the business. He said he plans to list Jio within five years.

Source: City AM; Financial Times

SINGAPORE

State-owned investment fund GIC led the $102 million Series D funding round in Pagaya, a New York and Tel Aviv-headquartered artificial intelligence-driven asset management firm.

In a statement, Pagaya said Aflac Global Ventures, Poalim Capital Markets, and existing investors Viola Ventures, Oak HC/FT, Siam Commercial Bank, Clal Insurance, GF Investments, and Harvey Golub, Pagaya’s board member, participated in the funding round, which was closed amid the global coronavirus pandemic.

In May, GIC backed the $230 million funding in London-based payment solutions provider Checkout.com.

Source: Deal Street Asia

Temasek joined a KKR-led consortium in investing in a minority stake in Hanoi-based residential developer Vinhomes for VND 15.1 trillion ($650 million). The group is acquiring a 6% equity stake in the homebuilder spun off from Vietnamese entrepreneur Pham Nhat Vuong’s VinGroup conglomerate in 2018.

KKR, which is investing through its Asian Fund III private equity vehicle, explained the deal as driven by its belief in Vietnam’s investment prospects and in the strength of Vingroup, a conglomerate which has already partnered on projects with Singapore’s GIC, Warburg Pincus and other international institutions.

Source: Mingtiandi

INTERNATIONAL (EXCLUDING ASIA) 

British insurer Prudential agreed to sell a stake in its American business to retirement services company Athene Holding for $500 million, with a view to increasing its focus on its Asian arm. The move comes as Prudential prepares an initial public offering for the US unit.

Prudential chief executive Mike Wells said the deal to sell an 11.1% minority stake in its US business would enable investors to “benefit to the fullest extent possible from the opportunity presented by our Asia business” and “pursue a path for an independent Jackson”.

Shareholders have been pushing for a breakup of Prudential. In February, activist hedge fund firm Third Point called on the insurer to separate its US and Asian operations, saying this would increase growth and drive value.

Source: Wall Street Journal / Morningstar

More than half (56%) of the world’s largest pension schemes have made no allocation to climate-related passive funds despite mounting pressure on institutional investors to step up the fight against global warming.

Create Research surveyed 131 pension plans from 20 countries with combined assets of €2.3 trillion and found that only a quarter had a significant allocation of at least 15% to climate-related strategies in their passive portfolio. Still, two-thirds of pension schemes expect to increase their allocations to climate-related passive funds over the next three years, said the consultancy.

The rise of interest in environmental issues has pushed more pension schemes to examine the quality of asset managers’ stewardship teams, engagement processes and their proxy voting records when agreeing new investment mandates.

Source: Financial Times