ASIA

Asian Development Bank (ADB) invested $95 million (S$129 million) in Temasek-backed Clifford Capital Holdings (CCH), according to the latter’s news release on September 17, marking ADB’s first-ever investment in Singapore since the opening of its regional office in March this year.

ADB will have a pro forma shareholding of 10.8% once all equity capital committed has been fully deployed by 2024. The transaction comprised a $50 million investment from the multilateral institution directly and another $45 million from Leading Asia’s Private Infrastructure, a fund that is is under ADB administration.

While the two parties did not disclose specific projects, CCH's group chief executive officer Clive Kerner said the partnership would spur its efforts in unlocking renewable energy sources such as solar and wind.

Source: Clifford Capital Holdings; Straits Times

AUSTRALIA

Australia’s largest superannuation fund, AustralianSuper, is “re-risking” its portfolio on the belief the Covid-19 downturn has provided a good opportunity to deploy capital, chief investment officer (CIO) Mark Delaney said.

Mark Delaney, Australian
Super: re-risking portfolio

Having reduced its weighting of unlisted assets in 2017 and 2018 on the belief the economic cycle was nearing its end, Delaney said values of property, infrastructure and some private equity assets have come down since before Covid-19, and are likely to be “substantially improved” over the next two or three years.

Source: Investment Magazine

Unisuper committed to having an investment portfolio with net-zero carbon emissions by 2050 and ruled out investing in companies that make more than 10% of revenue from thermal coal under a new climate action plan.

After mounting pressure from members, many of whom are part of scientific and environmental research communities, the A$80 billion default fund for university workers has updated its climate policy. Unisuper committed to applying a shadow carbon price to its investments that would de-prioritise investment in industries exposed to future government regulation of the fossil fuel industry.

It also pledged to ensure all active, in-house Australian companies in its portfolio have made Paris-aligned commitments by the end of next year. Under the revised plan, Unisuper will allocate new capital to companies geared towards achieving the net-zero by 2050 target and pledged to engage with polluting businesses to reduce emissions, which could include promoting carbon offsetting.

Source: The Sydney Morning Herald

Hesta announced Alan Sheen as its head of portfolio management, a key addition to the new-look senior investment leadership team announced earlier this year.

Chief investment officer (CIO) Sonya Sawtell-Rickson said the appointment marks another significant step forward in the implementation of the A$52 billion ($37.84 billion) industry fund’s ambitious investment strategy to keep delivering the best possible return to members at the lowest achievable cost and risk exposure.

Reporting to Sawtell-Rickson, Sheen will lead internal and implemented teams across growth, defensive and unlisted asset classes, embedding Hesta’s total portfolio approach to investments.

Source: Hesta

CHINA

China’s Anbang Insurance Group (Anbang) announced it would apply to China Banking and Insurance Regulatory Commission (CBIRC) to disband and liquidate the company.

The government took control of the insurer in 2018, and passed it to Dajia Insurance Group in February this year, a newly-formed entity for taking over Anbang’s assets. Founded in 2004, Anbang has more than Rmb1.9 trillion ($280.44 billion) assets under management, according to company website.

Source: Anbang Insurance Group

China’s National Council of Social Security Fund (NCSSF) released an annual report that revealed the total assets under National Social Security Fund (NSSF) were Rmb2.63 trillion ($389 billion) at the end of 2019, up 17.6% compared with 2018.

Direct investment contributed 39.6% of the total assets while the rest was placed in entrusted investments. Onshore assets still dominate the portfolio, accounting for 90% of assets.

NSSF recorded a 14.06% equity investment return of Rmb291.7 billion, representing a higher than average annual return (8.14%) since its establishment in 2000. 

Source: National Council for Social Security Fund

INDIA

The pension regulator is relooking at the cost structure for pension fund managers and other intermediaries and plans to revise their rates well ahead of appointing more fund managers, Supratim Bandyopadhyay, chairman of the Pension Fund Regulatory and Development Authority (PFRDA), said on September 18.

The regulator will invite request for proposals from pension fund managers by December so as to offer a wider choice to subscribers, Bandyopadhyay said in a virtual conference hosted by the Confederation of Indian Industry. 

While the cost of the National Pension System is one of the lowest in the world, it cuts both ways, Bandyopadhyay said. Subscribers to NPS are currently charged 0.01% of their assets as a fund management charge, but this is a small amount for pension fund managers that have to account for brokerage charges, audit fees, and other costs. Bandyopadhyay had earlier said fund manager revenues were very low and needed to be increased in order to attract talent from the market.

Source: Economic Times

JAPAN

Hiromichi Mizuno, former investment chief of Japan’s $1.3 trillion state pension fund Government Pension Investment Fund, intervened personally to influence the Harvard University endowment fund in what investors say was a “dark arts” campaign to shield the chief executive of Toshiba from activist shareholders.  

Hiromichi Mizuno, ex-GPIF
CIO: applying pressure?

Mizuno had private discussions over voting intentions with Narv Narvekar, chief executive of Harvard Management Company, as Toshiba looked to sway investors and proxy advisory services, as reported.

He held an online meeting with Narvekar about two weeks before Toshiba’s annual general meeting, following which Harvard decided to abstain from voting on Toshiba CEO Nobuaki Kurumatani’s reappointment. In the end Kurumatani survived the vote, but the victory has raised questions over whether some investors felt undue pressure to change their vote.

Source: Financial Times

KOREA

Korea Post is inviting bids for a global hedge fund mandate for its insurance unit.

The manager, which will be appointed for a three-year term, will be responsible for selection of funds and related services such as due diligence, performance analysis, and risk evaluation. The size of the mandate is not specified, but applications are open until September 28.

Korea Post had around $106 billion of total assets as of December 2019, with less than 10% allocated to alternative or non-mainstream investments, including hedge funds, infrastructure and private equity.

Source: Asia Asset Management

Investors should not be “too bearish” about the markets even if tensions between the US and China continue to rise, said Choi Heenam, chief executive of Korea Investment Corporation.

Choi Heenam, KIC:
not "too bearish"

He argued that relations appear unlikely to greatly shift in the near term. “The US-China dispute isn’t just political…It’s a hegemonic conflict based on structural problems rather than political interest,” Choi said.

“I think it will continue to be an overhang for the global economy, but ultimately, not destructive,” he added.

Source: CNBC

The National Pension Service (NPS) may unload up to a net W8 trillion ($6.87 billion) worth of domestic equities by the end of the year.  The W752.2 trillion pension fund had targeted a domestic equities exposure of 17.3% for the year, but the it had already exceeded this with an 17.5% allocation by June.

In fact, NPS and other pension funds sold off a net W3.12 trillion ($2.6 billion) worth of domestic equities from August to date to meet its annual domestic target in its investment portfolio. The pension fund giant accounted for nearly almost all of the selling, and experts are saying that the pension fund.

The NPS scooped up stocks worth W16.8 trillion between April and June, grabbing bargains as the market bled in the wake of the coronavirus.

Source: Korean Investors

NPS decided to stop paying management fees for project funds to be launched by South Korean private equity firms if the latter have received capital from the pension scheme to set up blind pool funds.

Private equity funds can use up to 20% of the blind pool fund money to finance an M&A deal. They typically set up separate project funds to finance acquisitions worth over W500 billion, and ask the limited partners of their blind pool funds to commit additional capital for the project fund.

These project funds charge a management fee of 0.5%-2%, compared to the 1.5%-2.3% charged by global private equity funds. Further, Korean LPs tend to pay an additional fee to global PEFs, paying a premium for deals more likely to generate good returns.

Source: Korean Investors

Four investment managers working at NPS are being investigated by police for allegedly smoking cannabis. The investigation comes as a shock for the pension fund, but this is not the first time NPS employees have engaged in misconduct.

Source: Korea Times

The Korean Teachers’ Credit Union (KTCU) will invest W100 billion ($85 million) in a pre-completed logistics center leased to Amazon.com in Delaware, US for an expected annual return of around 8%, said a KTCU source.

Seoul-based IGIS Asset Management acquired the property for approximately W200 billion last month. Hana Financial Investment has set up a W200 billion vehicle to fund the purchase as the underwriter. Amazon will occupy the distribution center under a 20-year lease once it is completed around July of next year. The facility will have a floor space of around 350,000 square meters.

The W12 trillion KTCU pension fund will commit W100 billion to the domestic vehicle, in which Yellow Umbrella Mutual Aid Fund is also considering participating, according to another source. 

Source: Korean Investors

MALAYSIA

The Employees Provident Fund (EPF) recorded a gross investment income of RM15.12 billion ($3.67 billion) for the second quarter ended June 30 with equities contributing 54%, or RM8.11 billion.

Fixed income instruments contributed RM6.17 billion while real estate and infrastructure accounted for RM470 million and money market instruments RM370 million, it said in a statement on September 19. Its net investment income came in at RM13.46 billion after the cost write-down on listed equities.

EPF noted that its overseas diversification strategy guided by its strategic asset allocation also helped improve its overall performance. As at end-June 2020, its investment assets stood at RM929.64 billion, of which 30% was invested in overseas investments, but these assets accounted for 39% of gross investment income.

SINGAPORE

Singapore Life, a six-year old online only insurer, and Aviva Singapore, a unit of the UK’s Aviva, are merging in a S$3.2 billion ($2.34 billion) deal, one of the largest in the Southeast Asian insurance sector.

Ray Ferguson, Singlife:
a bigger chair

They will combine their businesses into a new firm called Aviva Singlife, which will be 25% owned by Aviva, with TPG and Sumitomo Life Insurance holding 35% and 20%, respectively, Singlife said in a statement on September 11. The balance 20% will be held by other Singlife shareholders, including Aflac Ventures, Aberdeen Asset Management and IPGL. 

Singlife chairman Ray Ferguson will hold the same position in the new company, and chief executive officer Walter de Oude, who founded the insurance firm in 2014, will be the deputy chairman. Aviva Singapore CEO Nishit Majmudar will hold the same position in the merged firm.

Source: Asia Asset Management

Singapore's investment company, Temasek, has signed an agreement to acquire a majority stake in Rivulis, an Israel-headquartered provider of global micro-irrigation products and solutions.

The acquisition, which is subject to government authorisation, is expected to be completed in the fourth quarter of 2020, the companies said in a joint statement on September 15.

Temasek's S$291 billion ($214 billion) portfolio includes significant exposure to the agribusiness space, as well as a focus on sustainable living, which is core to Rivulis' business, they added.

Source: Straits Times 

INTERNATIONAL

Institutional investors see deglobalisation and declining global fertility rates as the most important factors for global economic growth, according to Principal Global Investors’ latest poll.

The poll shows that higher and long-term inflation, ESG and US dollar’s dominance stay as the most important factors which influence economy growth. Forty percent of the asset manager’s clients and investors are keeping a close eye on US election and how the leading regions of the world (US, Europe, China and India) align in coming years.

Source: Principal Global Investors

UK aero-engine manufacturer Rolls-Royce is calling upon sovereign wealth funds including Singapore's GIC to raise 2.5 billion as it looks to repair a balance sheet badly damaged by the impact of Covid-19. 

The company could conduct an equity offering in the first two months of October, and has asked Goldman Sachs to handle it. It said it had not finalised the plan and is considering all funding options. GIC declined to comment. 

Source: Financial Times