Insto roundup: Aussie supers add foreign shares; NPS's staff exodus

AUSTRALIA

A surge of investment by superannuation funds has seen Australian ownership of foreign equities jump 27% to A$1.5 trillion ($1.03 trillion) in two years, making Australia less reliant on foreign capital.

The level of foreign equities owned by Australian investors reached a record A$141 billion more than the level of Australian equities owned by foreign investors, reversing fears of "selling off the farm". Association of Superannuation Funds of Australia chief executive Martin Fahy said the outward-bound investment has been driven by superannuation funds obliged to diversify geographic investment risk.

Source: Australian Financial Review

Statewide Super is looking at several growth options including potential retail fund partners, but it has ruled out three-way mergers as having too much execution risk, after canceling its plans to merge with Tasplan and WA Super in June. 

Chief financial and operating officer Grant Eastwood, who was appointed in his hybrid role to get the super merger-ready, said the fund is still keen on looking at organic or inorganic opportunities to grow its scale.

INDIA

Canada Pension Plan Investment Board (CPPIB) invested $115 million in Delhivery, broadening its exposure to the logistics sector in India. 

Delhivery, one of India's leading third-party logistics providers, operates in more than 2,000 cities (more than 17,500 pincodes) offering a full range of supply chain services. The investment was made through CPPIB's Fundamental Equities Asia Group, which performs fundamental research and invests in quality corporates for the long term throughout Asia.

As at June 30th, CPPIB's equity investments in India totaled C$9.9 billion ($7.52 billion) across all asset classes.

Source: Yahoo!

Life Insurance Corporation of India saw the value of its equity portfolio chipped away by the ongoing selloff in the domestic stocks. About 80% of stocks in its portfolio have dropped in value, with a just few in sectors such as shipbuilding and IT providing a relief.

The Indian insurer had more than 350 companies on its book as of June this year.

Source: The Economic Times

Temasek and Canada’s Brookfield Asset Management joined the bid for the gas pipeline assets of Indian state-run Gail, according to three people aware of the matter.

“The RIL-Brookfield pipeline deal has set a precedent for such asset monetization. Gail too has been exploring this option. They have held talks with several investors including, Brookfield and Singapore’s Temasek,” an investment banker said. Both Brookfield and Temasek declined to comment emails sent on Friday by Live Mint.

Source: Live Mint

Dai-ichi Life Insurance, one of Japan’s biggest investors, has cut holdings of stocks and increased currency hedging on foreign bonds as US-China trade frictions have escalated beyond expectations, said Kazuyuki Shigemoto, chief general manager for investment.

In an unusual move, the insurer has already drastically changed its market scenario and investment plan twice this financial year, which started in April.

Dai-ichi Life does not plan to buy US high-yield debt, despite its popularity among many bond investors globally as yields on government bonds in Europe and Japan have plunged into deep negative territory, given its cautious view on the economy and market. But it looks to increase alternative assets, such as real estate investments because they retain decent returns.

Source: Reuters

T&D Insurance Group, a major Japanese insurance company, agreed to enter into a business and capital alliance with Tikehau Capital, the alternative asset management and investment group.

The partnership will focus on marketing Private Debt products managed by Tikehau Capital, and could potentially be extended to other asset classes in which the Group is active.

In order to strengthen this long-term strategic partnership, T&D Insurance Group have expressed their intention to become a shareholder of Tikehau Capital through the acquisition of outstanding Tikehau Capital shares.

Source: Press release

KOREA

Teachers Pension said on September 5 that it had chosen as chief investment officer (CIO) Kyuhong Lee, ex-CEO of Ascendas-Singbridge Korea, a Singapore-based asset manager.

The $16 billion pension scheme will officially appoint Lee to the two-year job later this month after background checks. His term can be extended by one year. Kyuhong Lee was chosen as Teachers' Pension CIO among 17 applicants.

The CIO position has been left vacant since Park Dae-yang moved to the sovereign wealth fund Korea Investment Corporation as CIO last month.

Source: Korean Investors

National Pension Service (NPS) lost over 100 traders and fund managers after it moved its headquarters for fund management from Seoul to Jeonju.

According to NPS, total 107 out of 293 headcounts in the fund operation division quit since 2016, with about 20 set to leave this year. Over last three years, more than one out three has left the company.

The state pension fund's stock division lost 24 traders, bond division 12 and alternative assets 32. The fund’s payroll added just six this year, compared with 39 additions in 2018.

Source: Mail Business News Korea

MALAYSIA

The Employees Provident Fund Board recorded a MYR70 million ($16.7 million) drop in investment income in the second quarter from a year ago due to the weakened equities market sentiment in Malaysia.

It said in a Friday statement that the income fell from MYR12.4 billion from the previous year and warned of challenging and volatile market conditions for the rest of the year.

Source: The Star Online

SINGAPORE

The Central Provident Fund (CPF) defied the downward trend experienced by assets under management (AUM), growing its total by 6.6% over the past year, from S$375 billion ($271.86 billion) in total assets in 2017 to nearly S$400 billion in 2018.

Source: The Independent

Abu Dhabi National Oil Company (Adnoc) completed a $600 million pipeline infrastructure investment agreement with Singapore’s sovereign fund GIC. The total deal value boasted about Dh18 billion ($4.9 billion).

GIC’s investments in the crude pipeline infrastructure will grant the fund a 6% stake in Adnoc Oil Pipelines, while co-investors Blackrock and KKR together hold a 40% stake. Abu Dhabi Retirement Pensions and Benefits Fund will retain its 3% stake, with Adnoc being the majority shareholder, owning the remaining 51% of the entity.

Source: The National

Singapore’s state investor Temasek and Swiss logistic company Kuehne + Nagel announced on September 5 that they had established a $50 million fund to back innovation startups in the logistics sector.

The fund will be managed by a joint venture called Reefknot Investments and will select between six and eight companies that specialise in advanced logistics technology, including artificial intelligence and data-based supply chain management.

Source: Nikkei Asian Review

Temasek’s planned sale of a $3 billion stake in retailer A.S. Watson Group was thwarted as pressures from Brexit and Hong Kong’s political turmoil hampered the company’s businesses in the UK and its Asian home market.

The Singapore state investor has not been able to reach agreement on the drugstore group’s valuation with potential buyers, prompting the fund to delay the sale.

Source: Bloomberg

TAIWAN

Minister of Labor Hsu Ming-chun said the government has tabled a bill to the legislative branch to reform the labour insurance fund managed by the Bureau of Labor Funds (BLF), while reiterating that a NT$20 billion budget will go into the fund next year.

The NT$728 billion ($23.32 billion) labor insurance fund, which accounted for 17% of the pension fund's assets of NT$4.2 trillion as of July, is expected to be used up by 2026 and the funding gap by then is estimated to be NT$83.4 billion. 

BLF’s deputy director general Liu Li-ju told AsianInvestor earlier that the root problem of the fund is aging population in Taiwan, which has meant the fund has not received enough contributions to cover its payouts.

Source: Formosa TV, BLF

INTERNATIONAL

Samsung Securities said that it signed a memorandum of understanding with Montreal-based institutional investor Caisse de depot et placement du Quebec (CDPQ) at the latter’s head office in Quebec on September 6, on mutual business partnership. 

CDPQ one of world’s largest institutional investors with net assets worth $244.6 billion as of June, has increased its focus on alternative investment, spending $48.5 billion in infrastructure and real estate investment as of June. Meanwhile Samsung Securities bought a stake in the liquefied natural gas (LNG) terminal of Dunkirk, France, in 2018, and this year it took part in a UK railway vehicle lease project and invested in airports and renewable energy plants in Europe. 

Under the latest partnership Samsung Securities and CDPQ plan to work together in seeking joint investment opportunities in infrastructure projects. Samsung Securities also intends to expand opportunities in infrastructure investment in North America and Europe for local institutional investors. 

Source: Pulse News