AUSTRALIA

Rest Super is understood to be considering options for its 50% in SEA Gas, which owns and operates a 700 kilometre underground high pressure natural gas pipeline and transmission system from Port Campbell in Victoria to Adelaide.

The superannuation fund is understood to have hired investment bank Lazard for help with the review, and has had its bankers quietly testing the appetite of potential buyers to see whether it get enough interest for an auction. Listed pipelines giant APA Group owns the other 50 per cent in SEA Gas and shapes as a potential acquirer. 

A spokesman for Rest declined to comment on Monday (May 24).

Source: Australian Financial Review

The $61 billion Hostplus will swallow up the $2.6 billion Intrust as it pursues its long-standing ambition of acquiring more members in Queensland.

The 33-year-old Intrust has about 96,000 members, and 30,000 employers in the hospitality, clubs, tourism and retail sectors. Hostplus and Intrust's merger talks are in an advanced stage, Financial Standard understands.

The merger for Intrust comes at a time when it is significantly below the Australian Prudential Regulation Authority desired scale of A$30 billion ($23.24 billion) for superannuation funds to survive. Intrust was also hit by early release of superannuation withdrawals of about $288 million last year.

Source: Financial Standard

Australian superannuation funds could find future returns could be "muted" as elevated asset prices in public markets make it harder to meet lofty return targets, according to presentations at a Australian Institute of Superannuation Trustees conference in Adelaide.

The warning comes as funds managing Australia's A$3 trillion ($2.3 trillion) pool of retirement savings lift allocations to non-traditional investments, such as venture capital and private debt, to enhance returns. 

Future expectations are being tempered after a stellar recent performance — the median default investment option for Australian superannuation funds has returned 14.7% in the financial year to April 30 and returns averaged an annualised 8% over the past 10 years.

The outgoing top regulator for Australia's superannuation funds called for continued and more efficient industry consolidation, in pursuit of economies of scale.

Helen Rowell, deputy chairwoman of the Sydney-based Australian Prudential Regulation Authority, in a speech on May 19 to the Australian Institute of Superannuation Trustees, said, "Larger funds are better placed to deliver stronger investment performance and lower fees," with scale an increasingly important determinant of "member outcomes."

However, she also noted that not all mergers succeed in spawning funds with the governance capabilities or the scale to be sustainable over the long-term, and expressed support for the "emerging industry view" that funds with less than A$30 billion ($23.24 billion) in assets will find it increasingly difficult to compete with the industry's "mega funds".

Source: Pensions & Investments

UniSuper Australian equities stockpicker and equity capital markets deals investor Mark Himpoo retired on May 21.
 
Sources said Himpoo, who has played a leading role in underwriting some big Australian block trades and equity raisings in recent years, has decided to call time on his career at $95 billion fund manager UniSuper.

Source: Australian Financial Review 

CHINA

The Dutch pension funds ABP, Detailhandel, PMT and Woningcorporaties sold their stakes in several Chinese companies that are supposedly involved in the oppression of the Uyghur minority.

Investigative website Follow the Money examined the exposure of the 24 largest Dutch pension funds to Chinese listed companies that are associated with exploiting Uyghurs. The website  concluded that ABP, PMT, Detailhandel and Woningcorporaties have sold their stakes in some of the firms in question.

The investment in the Chinese companies involved is relatively small. The total value of the stakes that were sold by the four pension funds in question amounts to €115 million ($140.43 million), according to Follow the Money.

Source: IPE.com; Follow the Money

China is close to kicking off its long-awaited public real estate investment trust (Reit) market, with regulators approving the first batch of nine real estate investment trusts that will raise an estimated Rmb30 billion ($4.7 billion) for infrastructure projects.

China Securities Regulatory Commission (CSRC) approved the registration of the nine Reits, which will channel investors' money into projects ranging from tollways and warehouses, to industrial parks and sewage plants.

The green light, which will allow China's first Reits to be sold and traded on stock exchanges, comes a year after Beijing announced plans for a pilot scheme.

Source: China Securities Regulatory Commission

JAPAN

Japan’s Nippon Life has invested $230 million into reinsurer Resolution Life, as part of a $1.6 billion fundraising round being conducted by the Bermuda-based reinsurer.

The Japanese insurer invested an initial $157 million in Resolution Life in its earlier fundraising round in 2019, when the target was over $3 billion. The new target would raise the total raised since the company’s inception in 2018 to around $5 billion.

Source: Asia Asset Management

Japan’s Pension Fund Association for Local Government Officials, or Chikyoren, said it expects to post the best returns since 2001 on the back of the global equity market’s rally. Its annual investment returns likely exceeded 20% in the year ended March, on the $247 billion of assets that it has under management.

Chikyoren has half of its portfolio tracking global and domestic equities, and this led it to enjoy a rise in returns as risk assets around the globe rebounded to record highs on the back of easy monetary policy and fiscal stimulus.

Source: Bloomberg

Japanese-based insurance giant Mitsui Sumitomo Insurance (MSI) will invest $36 million in Israeli vehicle cybersecurity startup Upstream Security. MSI’s investment opens Upstream’s series C funding round that will be completed over the coming months, led by MSI.

Source: the algemeiner

KOREA

KKR attracted a combined $400 million from the National Pension Service and Korea Post for its latest flagship fund that raised $18.5 billion at its final close. NPS has committed $300 million and Korea Post $100 million to KKR North America Fund XIII, according to investment banking sources on May 21. It is the US investment firm's largest buyout fund since its $17.6 billion fund launched in 2006.

Source: Korea Economic Daily

South Korea’s Industrial Accident Insurance Fund has opened a tender for a W60 billion ($52.8 million) venture capital mandate, which will be split between two large and two smaller asset management firms. The large firms will receive W40 billion, and the two small and mid-sized firms will get W20 billion, the fund said in its request for proposal published on the website of the Korea Financial Investment Association on May 21.

Source: Asia Asset Management

Hyundai Investments, the wholly-owned investment arm of Hyundai Marine & Fire Insurance,  on May 20 announced the closure of a new, W490 billion ($433 million) private fund dedicated to South Korea-focused acquisition financing for private equity clients. The fresh fund, closed on May 18, is a second installment of its kind to invest in senior debt, following a W230 billion fund created in February 2020.

Source: The Investor

HONG KONG

Hong Kong electricity company CLP Holdings takes a “mindful” approach to introducing new investment choices in its Group Provident Fund Scheme (GPFS), according to chief financial officer Nicolas Tissot.

GPFS is one of the largest private pension plans in Hong Kong, managing more than $1 billion of assets for 4,000 members. The defined-contribution pension plan currently offers 25 types of investment choices, ranging from diversified lifestyles funds, specialist funds, money market funds, and fixed deposits.

“From time to time, we review our fund range and sustainability, and would bring in options as and when appropriate,” Tissot said in an interview. “We’re mindful that it would not be efficient to have so many options that the total assets under management allocated to them become too low, and therefore costly to members.”

Source: Asia Asset Management

INDONESIA

The Indonesia Investment Authority (INA) confirmed its first official foreign commitments for a toll-road investment vehicle.

Canada’s Caisse de Dépôt et Placement du Québec, the Netherlands’ APG Asset Management, and a subsidiary of the Abu Dhabi Investment Authority will each invest $1 billion in the new vehicle, while INA committed $750 million.

INA said the new vehicle would be “the consortium members’ primary vehicle for toll road investments in Indonesia”. It is expected to make its first investments within six months.

Source: Financial Times

The Indonesia Investment Authority joined the International Forum of Sovereign Wealth Funds (IFSWF) as an associate member.

In so doing, the recently launched sovereign wealth fund agrees to abide by the 24 so-called Santiago Principles of good governance, accountability and transparency. Among the principles is independence from government in the management of the fund to pursue investment decisions.

Associate members are institutions in the early stages of becoming a sovereign wealth fund. India’s National Infrastructure Investment is among them. Full members include the Abu Dhabi Investment Authority, who is assisting Indonesia in setting up the fund, as well as Singapore’s Temasek and GIC, and Australia’s Future Fund. IFSWF counts six associate and 35 full members.

Source: IFSWF

SINGAPORE

Temasek became the third largest shareholder in the new regional tech giant created through the merger of Indonesian unicorns Gojek and Tokopedia on May 17.

With a 7.2% stake in the new company, Temasek is the third largest shareholder after SoftBank (15.3%) and Alibaba (12.6%). The state investment company was a backer of both Gojek and Tokopedia prior to the merger, first investing in them in 2018 and 2020 respectively.

GoTo is expected to dual list in Jakarta and New York later this year and is targetting a post-money value of close to $40 billion.

Source: DealStreetAsia, SCMP

Temasek partnered DBS Bank, Singapore’s stock exchange and Standard Chartered to set up a carbon credit trading platform known as Climate Impact X (CIX).

CIX aims to provide better price transparency and verification of the quality of carbon credits and is targeting large businesses legally required to buy carbon credits to offset their emissions. It will also create a marketplace for companies wishing to invest in green projects. Temasek said CIX is in talks with global rating agencies to provide independent ratings to these projects.

The Monetary Authority of Singapore welcomed the initiative, which is under the industry group Alliances for Action (AfAs) and part of wider efforts to make Singapore a carbon services and trading hub.

Source: Business Times

Singapore Airlines (SIA), the state carrier majority owned by Temasek, raised S$6.2 billion ($4.7 billion) in mandatory convertible bonds as it recorded a loss of S$661.7 million for the three months of 2021.

Temasek, which owns a 55% stake in the airline, provided an undertaking to subscribe to its pro-rata entitlement and any remaining balance of the issuance.

In 2020, SIA raised a total of S$14.6 billion through bond issuances, sale-and-leaseback transactions and a S$8.8 billion rights issue.

Source: Business Times

INTERNATIONAL (EX-ASIA)

Canada Pension Plan Investment Board is betting big on the Indian public equity markets. In its fiscal 2021 annual report released last week, CPPIB said its active equities department would "focus its efforts to increase exposure in emerging markets by expanding our presence and investment capabilities in India”. 

The Canadian pension fund has been selective in its approach and participated in equity capital market deals like the SBI Life Insurance listing, the Power Grid Invit initial public offering and the Embassy Office Parks QIP. According to the annual report, CPPIB reported a record 20.4% rate of return nearing $500 billion seven years ahead of projections at inception.

Source: Money Control

The US’s largest sovereign wealth fund, Alaska Permanent Fund Corporation (APFC), committed $80 million to Asia-focused alternative investment funds in the first quarter of 2021.

This includes $50 million to two funds under Chinese private equity funds Boyu Capital; $14 million to Bain Middle Market Japan fund; and a $16 million co-investment in Singapore-based renewable energy developer Vena Energy.

APFC committed in total committed $309 to alternative vehicles globally between January and March 2021. Its current portfolio comprises 39% public equity, 21% fixed income, and 40% alternatives.

Source: DealStreetAsia