Insto roundup: AIA to cut all coal assets; GPIF criticised for cannabis exposure

CBIRC adds national security reviews to foreign ownership in China's insurance sector; AIA to exit all coal investments by 2028; GPIF criticised for marijuana investments; Australia names new superannuation watchdog; NPS commits $500m to Blackstone fund, denies reports it will hike its local stock allocation; Temasek's impact private equity unit invests in five companies and more.
Insto roundup: AIA to cut all coal assets; GPIF criticised for cannabis exposure


Climate Action 100+, a large investor group, has launched a benchmark assessing companies’ performance against its three high-level commitment goals: reducing greenhouse gas emissions, improving governance and strengthening climate-related financial disclosures.

The benchmark defines key indicators of success for business alignment with a net zero emissions future and the goal of the Paris Agreement to limit the global temperature rise to 1.5 degrees Celsius.

Climate Action 100+ comprises 545 global investors responsible for $52 trillion in assets under management, which include asset managers and owners.

Source: Climate Action 100+ 


The Australian Prudential Regulation Authority (Apra) has appointed former British regulator Margaret Cole as the new head of superannuation industry supervision at a key moment for the A$3 trillion ($2.32 trillion) sector.

Cole's hire follows a series of financial scandals that has also led to criticism of Australia’s watchdogs. It also comes as Prime Minister Scott Morrison’s government tries to push through an overhaul of the 30-year old superannuation system, a move that will increase Apra’s role in overseeing the sector.

Cole was previously a managing director at the UK’s then Financial Services Authority, known for her tough approach.

Source: Financial Times

Superannuation legislation before Australia's parliament would cut investment aimed at tackling climate change and result in lower returns for super fund members, indicates research by the Thinking Ahead Institute, the research arm of investment consultancy Willis Towers Watson.

The legislation, known as Your Future, Your Super, will introduce an annual performance review that bans super funds from taking on new members if they fail to reach the industry benchmark for returns for two consecutive years. The reforms will also staple members to the same fund throughout their working lives unless they actively choose to set a up a new fund.

TAI’s report said the reforms could backfire by discouraging firms from investing in long-term assets and projects that fight climate change.

Source: Thinking Ahead InstituteThe New Daily

None of the 12 heaviest emitters of carbon in Australia have disclosed how they will align future investment decisions with their stated emission-reduction aims, found Climate Action 100+, a group of 545 asset owners and fund managers managing a combined $52 trillion of assets.

The group also found that none of the companies' decarbonisation targets were fully aligned with the goals of the Paris climate agreement to limit global warming, and said it would raise demands for more aggressive targets to be set. Climate Action 100+ director for Australia Laura Hillis said just three – BHP, Santos and Rio Tinto – had some level of strategy mapped out for hitting their targets. 

Among Climate Action 100+ members are Australia’s top superannuation funds as well as international asset managers such as BlackRock, Fidelity and State Street.

Source: Brisbane Times

Australian real estate investment trust Dexus has partnered with Mercatus Co-Operative to buy a stake in the 1 Bligh Street office tower in Sydney for A$375 million ($290.29 million) from superannuation fund Cbus.

Dexus and its unlisted Dexus Diversified Property Fund jointly owned the building with Cbus's property investment arm, each with a one-third interest since its completion in 2011. The latest transaction will raise the Dexus group’s interest in the building to 36.66%.

Source: IPE Real Assets

Hesta has added a new director to its board, as former Ramsay Health Care chief executive Daniel Sims retires. 

Alan Morrison: Hesta's
new board member

Alan Morrison was appointed to the superannuation fund's trustee board of directors this month. He will also sit on the audit and risk committees.

Morrison represents the Australian Private Hospitals Association, where he is a director and treasurer.

Source: Financial Standard


The China Banking and Insurance Regulatory Commission (CBIRC) announced on March 19 that new national security reviews had been added to rules on foreign ownership in an insurance business even as it removes the 51% cap on foreign ownership.

The CBIRC said in a statement that a statute that bars foreign investors from taking a stake of over 51% in an insurance company had been deleted, as part of a major revision to the country’s regulations on foreign insurance companies operating in the domestic market.

Source: CBIRC


Hong Kong-based AIA has announced it will pull out of all coal investments by 2028. The life insurer will divest and/or run off its entire directly managed equity and fixed income exposure to coal mining and coal-fired power businesses by the end of 2021 for equity and 2028 for fixed income, and will not permit any new investments in businesses involved directly in either mining coal or generating electricity from coal.

AIA is estimated to hold up to $6 billion of its $326 billion investment portfolio in coal and coal-fired power assets, according to the Institute for Energy Economics and Financial Analysis.

Last year, the insurer had divested directly managed equity exposure in coal mining and coal-fired power companies generating more than 30% of their revenue from either or both of these activities.

Source: AIA; The Guardian


The Government Pension Investment Fund (GPIF) has been criticised for holding shares of marijuana-growing companies when the narcotic's usage is illegal in the country.

GPIF accumulated stakes totaling some $80 million in at least three listed cannabis companies, namely Canopy Growth Corp, Cronos Group and Aurora Cannabis. The investment accounted for only about 0.005% of GPIF’s $1.6 trillion in assets. 

However, a criminal defence attorney in Osaka said GPIF’s investment in marijuana companies was a “complete contradiction” and that “people’s lives get ruined for this”. A GPIF spokeswoman said the pension fund’s rules barred it from direct purchases of shares and that the vast majority of the fund’s stocks were bought via accounts intended to track equity indexes. 

Source: Bloomberg


The National Pension Service has committed $500 million to Blackstone's new life science real estate fund, marking its first investment in a vehicle targeting life science property. 

The Blackstone fund has raised $8.4 billion so far and is expected to raise more than $12 billion, according to investment banking sources. It focuses on core-plus life science properties, including medical laboratories and healthcare-related facilities in North America.

Source: Korea Economic Daily

The National Pension Service denied local news reports that it was considering reweighting its investment portfolio and raising its domestic stock allocation. 

Media reports had claimed NPS would slow its domestic stock-selling spree. Korean retail investors expressed disappointment when stock sales by Korean pension fund operators came under the spotlight amid the recent bearish trend in the stock market.

NPS, which manages W833.1 trillion ($736.6 billion) of assets, plans to gradually lower its Korean stock exposure to 16.8% by this year and to 15% by 2025. Its domestic stock exposure stood at 21.2% as of end-2020.

Source: The Korea Herald

The Military Mutual Aid Association (MMAA), a W11 trillion ($9.73 billion) pension fund for military service personnel and civilian employees, is looking to hire 10 local fund managers for an active domestic equity mandate.

The managers chosen will be responsible for setting up a pooled fund, the size of which has not been finalised, Applicants must have at least W10 billion of total assets, including W100 million of domestic equity investments.

Applications are open until March 25. Evaluation and manager selection are scheduled to be carried between April 2 and 23.

Source: Asia Asset Management


Commitment to private equity and venture capital funds in Malaysia grew substantially in 2020, though overall investments to the asset classes declined, according to the domestic Securities Commission's latest annual report. The total raised by PE and VC funds in 2020 was RM11.70 billion ($2.8 billion), up from RM6 billion the previous year.

Of the $7.39 billion raised by private equity funds, 31.52% came from corporate investors, 17.14% from individuals and family offices, and 13.12% from funds of funds and other asset managers. Of venture capital’s RM4.31 billion, government agencies and investment companies accounted for 41.77%, sovereign wealth funds 33.35% and corporate investors 20.59%.

Source: DealStreetAsia


GIC has upped its stake in India’s SBI Life Insurance by 1.675% via the purchase of 16.7 million shares from BNP Paribas for a total of nearly $211 million.

The Singaporean sovereign wealth fund had bought 2.1 million shares in SBI Life during its 2017 IPO but later sold a large part, reducing its stake to less than 1%. Its exact holding in the company following the acquisition is unknown.

SBI Life’s other investors include Temasek, Canada Pension Plan Investment Board and Carlyle Group.

Source: VCCircle

Temasek Foundation, the philanthropic arm of Singapore state investor Temasek, has awarded a project development grant to plant-based food company Float Foods.

The Singapore-based startup, which is carving out a niche in the crowded alternative proteins space, said the grant would allow it to develop and commercialise a plant-based whole egg substitute made from legumes. Other players currently focus on liquid egg products.

Temasek is an investor in the alternative proteins space, with holdings in Singapore’s Next Gen, Australia’s V2food and US Impossible Foods.

Source: KrAsia

ABC World, the impact private equity arm of Singapore's Temasek, invested S$98 million ($73 million) across five companies in 2020, its inaugural report showed.

The investees include Australian plant-based meat startup V2food, Vietnamese oral healthcare firm Kim Dental, Chinese rural microfinance firm CD Finance, India-based agri-tech platform CropIn and Singaporean solar firm Sunseap Group. ABC World choose these from more than 200 companies it evaluated.

ABC World was established in May 2019 to help further to the UN Sustainable Development Goals.

Source: The Business Times

Singapore state investor GIC invested in Nazara Technologies in the gaming firm’s pre-IPO anchor round. Abu Dhabi Investment Authority (Adia) is among the other 42 other anchor investors.

GIC and Adia invested around $3 million and $1.8 million for 8.4% and 5.1% stakes, respectively. Goldman Sachs, Fidelity Funds, Nomura Fund and Aberdeen Standard Investments also participated. Nazara is the first Indian gaming company to go public. Its IPO was 175.5 times subscribed when it was completed on March 19.

Sources: VCCircle, Economic Times of India

Temasek led a $50 million funding round in Shanghai-based container truck fleet operator Duckbill and invested into the latest $500 million funding round of Chinese autonomous driving technology startup Momenta, in its latest transport-related investments.

Duckbill has now raised a total of around $100 million in funds, with existing shareholders Future Capital, Discovery Fund and Shunwei Capital also participating. Duckbill claims to have raised the most in China's container trucking industry to date.

Other investors in the Momenta round included SAIC Motor, Toyota Motor and Bosch. 

Source: DealStreetAsiaReuters, CB Insights

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