Insto roundup: Calpers may hire Safe exec; Insurers sap yen
AUSTRALIA
AustralianSuper announced its first commercial real estate (CRE) debt investment in the UK on September 17, partnering advisor TH Real Estate to jointly finance One Crown Place in London. The Australian superannuation fund will provide £230 million ($301 million), while TH Real Estate has committed $65.4 million through its Global Real Estate Debt Partners – Fund II, as part of AustralianSuper’s European CRE debt mandate targeting mezzanine and development/refurbishment opportunities in excess of $130.7 million.
Source: AustralianSuper
The Royal Commission’s insurance-focused sixth round of public hearings concluded on September 21 with a closing statement from counsel assisting the royal commission Rowena Orr summarising the commission’s findings.
Insurers singled out for having breached the relevant laws and regulations included ClearView, Freedom Insurance, CommInsure, TAL, Rest Super, AMP, Allianz, and Swann Insurance. The misconduct included inappropriate staff remuneration practices when promoting mis-selling of policies, inadequate management of conflicts of interest, deducting insurance premiums from ineligible members, and charging dead customers for life insurance.
Responses to the findings are due from the parties on October 1.
Source: ABC
The Australian Labor Party, the official opposition in the Australian parliament, announced a $409 million plan on September 24 to address the gender pay gap in superannuation. Australian women have about 40% less retirement savings than Australian men, according to the party, and the plan, which would go into effect should Labor win the next election, would pay superannuation to people on paid parental leave. It would also remove the A$450 per month threshold that would allow part-time, multiple job, and seasonal workers to collect superannuation.
Source: ABC, The Guardian
HONG KONG
Yi Gang, governor of the People’s Bank of China, and Norman Chan, chief executive of the Hong Kong Monetary Authority, signed a "Memorandum of Co-operation on Using Central Moneymarkets Unit for Issuance of PBoC Bills" on September 20, after which PBoC bills can be tendered and issued through the Central Moneymarkets Unit's platform operated by the HKMA.
They said the issuance of PBoC bills in Hong Kong was intended to enrich the spectrum of renminbi financial products of high credit rating in Hong Kong, improve the yield curve of renminbi bonds in Hong Kong, and support the development of offshore renminbi business in Hong Kong. Details of the issuance will be separately announced.
Source: HKMA
INDIA
The Insurance Regulatory and Development Authority of India has mooted the idea of regulatory sandbox for innovations in fintech and insurance, according to a local media report.
The regulatory watchdog has formed a 10-member comittee to consider the matter and aims to issue a draft consultation paper in the next two months.
Source: Times of India
JAPAN
Japan’s Government Pension Investment Fund has selected two of S&P Dow Jones’s carbon efficient indices to serve as benchmarks for its ESG investment strategy.
The S&P Global carbon efficient indices are designed to reduce exposure to high-carbon companies by adjusting the weights of the index constituents according to their relative carbon-to-revenue footprint.
The world’s largest pension fund had approximately $1.4 trillion in assets at the end of March 2018.
Source: S&P
Prime Minister Shinzo Abe wrote an editorial in the Financial Times asking companies and investors across the world to engage with environmental, social and governance-focused investing or issue green bonds. He noted that GPIF had done so, and asked for investment into hydrogen energy and for greenhouse as emitting manufacturers to be encouraged to step up their production methods.
Source: Financial Times
Life insurers in Japan have increased their offshore investments to 22% of their total assets, and their ongoing desire to recoup higher yields offshore is placing weakening pressure on the yen, according to data from Bank of Japan on September 20. Over the last quarter the insurers have raised their offshore allocations, while over the same period the yen’s value against the dollar fell 4%.
Market strategists said that life insurers have little choice, as they need to pursue higher growth investments at a time when Japan’s own economy remains very sluggish and the Bank of Japan maintains its 10-year zero interest rate yield policy. Japan’s life insurers had ¥377.8 trillion of assets at the end of June.
Source: Bank of Japan, ThinkAdvisor
KOREA
The National Pension Service, Korea’s largest pension fund, funneled $100 million into a $1.75 billion co-investment led by US investment bank Morgan Stanley that will acquire the units of a US shale gas processing company.
In April Morgan Stanley’s investment vehicle North Haven Infrastructure Partners II agreed to buy the Delaware Basin subsidiaries of Texas-based Brazos Midstream Holdings for cash, the bank announced. SK Holdings, the largest energy company in South Korea, is also a co-investor alongside NPS; it invested $251 million, according to a regulatory filing in May.
Source: Seoul Economic Daily, Korean Investors
Korean pension fund the Police Mutual Aid Association has appointed Lee Doyoon as chief investment officer for a second two-year term, after the reappointment proposal gained the support of over two-thirds of attendees at PMAA's representative conference on September 12.
Since taking over as CIO in October 2016, Lee has increased PMAA's overseas alternatives allocations, especially in foreign real estate and infrastructure, and overall allocations to alternatives has increased from 47.2% at the end of 2016 to 52.2% at 2017 year end. Returns in alternatives also nearly doubled, from 4.9% in 2016 to 9.2% in 2017, and overall investment returns increased from 5.3% to 7.3% in the same time period.
Source: Korean Investors, PMAA
MIDDLE EAST
Qatar Investment Authority (QIA) has appointed Mansoor bin Ebrahim Al Mahmoud as its new chief executive, replacing Sheikh Abdullah Bin Mohammed Al Thani, according to a royal decree published by state-run Qatar News Agency. Al Thani spent nearly four years in charge of the sovereign wealth fund and now becomes a minister of state.
Al Mahmoud was previously CEO for four years at Qatar Museums, a government entity that oversees museums in the country. He also worked in the past as QIA’s head of risk management. He is a dealmaker who is likely to push the fund to pursue a more aggressive investment strategy, said two people who have previously worked with him.
Source: Bloomberg
Qatar Investment Authority (QIA) is rolling out an ambitious investment blueprint in China with a potential $600 million investment in online lender Lufax, reported China Money Network on September 21.
The sovereign wealth fund is reportedly in talks with Lufax, owned by mainland insurer Ping An, to lead a new financing round of up to $1.5 billion in the Chinese company, said media reports citing insiders. It expects to complete the new financing round in late October.
The $600 million is more specific than the estimate Bloomberg reported on September 18 of $500 million to $1 billion. The deal would continue QIA’s programme of investment in China.
Source: China Money Network
TAIWAN
Insurance funds in Taiwan will be required to invest a combined NT$150 billion ($4.9 billion) in the so-called five-plus two industries, public infrastructure projects and long-term care industries over three years starting September 1, 2018, the Financial Supervisory Commission said on September 19.
In the 12 months to August 31, 2019, insurers will have to invest NT$40 billion, another NT$50 billion over the next 12 months and NT$60 billion after that. The FSC also explained how the investment performance will be reviewed and rewarded.
Source: FSC
INTERNATIONAL (EX-ASIA)
The California Public Employees’ Retirement System (Calpers) has offered the job of chief investment officer to Ben Meng, deputy CIO of China’s State Administration of Foreign Exchange (Safe), reported the Wall Street Journal on September 19.
Calpers is the biggest US public pension fund with $360 billion under management, while Safe oversees China’s roughly $3 trillion in foreign reserves. Meng previously worked for the Californian fund for seven years, starting there as a portfolio manager in 2008.
Source: Wall Street Journal