Insto roundup: Allianz bets on India, China; NPS awards four mandates
AUSTRALIA
Australian superannuation account holders could gain an average of $16,000 each, or $1.3 billion total, if the 50 smallest high-cost super funds were merged with the 10 biggest low-cost funds, according to a Productivity Commission report released on November 26.
The report, which assessed efficiency and competitiveness within the superannuation industry, found that the average fund has grown from about $651 million to $5.8 billion from 2004 to 2017, and administrative expenses have shrunk from 58 to 44 basis points.
The report also found that there was little evidence that the scale benefits had been passed through to members in the form of lower fees.
Source: The Productivity Commission
CHINA
Anbang Insurance Group has hired Bank of America to help sell a portfolio of US luxury hotels formerly known as Strategic Hotels and Resorts. The portfolio includes the Westin St Francis in San Francisco, the Loews Santa Monica Beach Hotel, the Fairmont in Chicago, Essex House Hotel in New York and the Four Seasons in Jackson Hole, Wyoming.
An Anbang spokesman said the insurer is reviewing its US real estate portfolio after seeing a price recovery in local property assets.
Source: Bloomberg
JAPAN
The Government Pension Investment Fund has begun hedging a portion of its 15% foreign bond allocation and is open to doing more, Norihiro Takahashi, president of the ¥165.6 trillion ($1.45 trillion) fund, said in an interview with Pensions & Investments.
This could leave the institution’s ¥25 trillion foreign bond allocation better positioned to cushion any downside for the portfolio if and when the past decade’s global bull run for equities draws to a close.
Earlier this year, GPIF won approval to hedge its overseas currency exposure. Market players widely believe that GPIF, unlike most other Japanese institutional investors, hardly ever hedges against currency risk because of the potential upwards pressure on the yen if it did so, reported Reuters on November 16.
Sources: Pensions & Investments; Reuters
Japanese insurer Sompo has formed partnerships with two Israeli cyber startups to help open the Japanese market for them, continuing its push into financial technology investment, reported Haaretz.
The two startups are Panorays, which automates cybersecurity management, and an unnamed startup that deals with cyber intelligence, Sompo said. The two firms will work with Sompo, launched last year to provide cyber services to Japanese companies.
This partnership comes after it established Sompo Digital Lab in Tel Aviv, a venture focused on investing in technology startups, according to a Reuters article in late October. It also opened a fintech hub last year, reported Reuters in late November 2017.
INDIA
There has been a spectacular rise in investments in passively managed funds, led by domestic institutional investors, according to a media report.
Since the financial year starting April 2013, passively managed assets in India have almost doubled every year, increasing from Rs 24.3 billion ($343 million) to Rs740.6 billion ($1.05 billion) at the end of March 2018.
Much of this growth has been led by institutional investors in India, the report noted, with institutional investors accounting for 93% of the total assets under management in ETFs.
Source: Dalal Street Investment Journal
KOREA
Korea’s National Pension Service (NPS) has awarded W800 billion ($709 million) of mandates to four asset managers to invest in domestic real estate and renewable energy, according to a media report.
NPS, which manages W601 trillion,- is giving IGIS Asset Management and Samsung SRA Asset Management W250 billion each to invest in real estate, sources told IPE Real Assets.
Shinhan Alternative Investment Management and Samchully Asset Management will each get W150 billion to invest primarily in domestic renewable energy assets.
Source: IPE Real Assets
Overseas investments by domestic finance and insurance firms stood at $3.87 billion in the second quarter, up 34.6 percent from a year earlier, according to a report released by the Overseas Economic Research Institute under the Export-Import Bank of Korea.
The finance sector accounted for $3.66 billion, insurance and pension funds, $132 million, and financial insurance services, $81 million.
Source: Business Korea
SINGAPORE
Sovereign wealth fund GIC and Dexus, an Australian real estate investment trust (Reit), have established the Dexus Australian Logistics Trust, a new A$2 billion ($1.45 billion) unlisted trust, to invest in logistics properties in Australia.
The joint venture will be seeded with a A$1.4 billion, high-quality logistics portfolio, comprising mostly core logistics facilities in strong performing precincts with good access to major arterial roads, rails and ports. The assets are located mostly in Sydney and Melbourne (97%), Australia’s key metropolitan areas and strongest logistics markets.
Source: GIC
Temasek is setting up new groups to explore opportunities in artificial intelligence and blockchain technologies.
Temasek is creating so-called "experimental pods" to focus on these two areas, which it sees as long-term trends impacting multiple industries and geographies, according to an internal memo obtained by Bloomberg. Chia Song Hwee, the chief operating officer of key management arm Temasek International, will oversee the new groups.
The strategy was announced alongside other organisational changes that took effect on Oct 1, the memo shows. A spokesman for Temasek, which manages $308 billion, confirmed the contents, according to the report.
Source: Bloomberg, Straits Times
INTERNATIONAL (EX-ASIA)
German insurer Allianz’s property investment arm has inked partnerships in China and India to expand its investment in logistics assets in Asia.
Allianz Real Estate has set up a joint venture with ESR, a Hong Kong-based real estate developer and fund manager, to invest an initial €200 million ($225 million) into India’s logistics and industrial property market. This will grow into a $1 billion platform.
Meanwhile, Allianz Real Estate, with €60 billion under management, has acquired a 50% interest in a portfolio of core modern logistics assets across China. The assets were developed by Vailog China and are owned by a fund run by Hong Kong-based real estate investment firm Gaw Capital.
Source: Allianz (China release; India release)