Insto roundup: GIC to launch India fund; EPF pressures brokers on ESG
ASIA PACIFIC
Three Asian sovereign wealth funds and several Australian pension funds have put money into the flagship industrial fund of Australia’s Charter Hall Group, which has raised A$1.3 billion ($960.6 million) in its latest close and a total of almost A$2.6 billion this year.
US investors have also committed to the A$5.8 billion fund, but it has been “a long road” to reach out to the latter segment of limited partners, said Richard Stacker, Charter Hall’s Industrial & Logistics chief executive
Source: IPE Real Assets
AUSTRALIA
Aware Super has revealed that it rolled out a series of new benchmarks in October aimed at helping achieve its goals of net zero emissions by 2050 and of reducing the emissions intensity of its listed equities portfolio by 30% by 2023.
The superannuation fund, which manages A$125 billion ($92 billion) in assets, said the benchmarks worked by helping its investment managers implement strategies that exclude the highest-carbon emitters from their equity portfolios.
Source: Aware Super
Cbus, the superannuation fund for Australia's building and construction industry, has joined Australian industry energy transitions initiative to target supply chain emissions, in which AustralianSuper is already involved.
The scheme brings companies in the mining and oil-and-gas sectors together to exchange knowledge and develop research that will help the industry move towards net zero emissions in supply chains by 2050.
Other firms that joined when the initiative was launched in July include BHP, Australian Gas Infrastructure Group, BP Australia, BlueScope Steel and Woodside.
Source: Australian Industry Energy Transitions Initiative
CHINA
National Council for Social Security Fund announced that it achieved a 9.03% investment return in 2019 for local government pension funds entrusted to it, the highest since 2016.
By the end of December, 22 provincial-level regions in China had entrusted a total contract value of Rmb1.093 trillion to the state pension fund ($166.1 billion), surpassing the threshold of Rmb1 trillion for the first time on record.
Source: National Council for Social Security Fund
HONG KONG
Insurance group AIA said it had decided to end all direct equity investments in coal mining and coal-fired power producers earlier this year. The response came after environment groups reviewed the company’s portfolio, criticising it for lagging its peers in this area.
Source: Bloomberg
INDIA
Canada Pension Plan Investment Board and Abu Dhabi Investment Authority are keen to invest in India’s planned electricity smart metering programme and have expressed their interest to the country’s National Investment and Infrastructure Fund (NIIF).
India aims to replace 250 million conventional meters with smart meters, which also hold the key to its electricity distribution reforms, in what would be the world’s largest such programme.
With $4.3 billion of capital commitments from investors, NIIF invests across asset classes such as infrastructure, private equity, transportation and energy.
Source: Livemint
JAPAN
Japan’s Sumitomo Life Insurance and SBI Investment have set up an ¥8 billion ($76.8 million) venture capital fund that will invest mainly in companies that focus on wellness and new technologies.
The investment period of the new Sumisei Innovation Fund is 10 years. Osaka-headquartered Sumitomo Life had ¥39.7 trillion in assets as of June 2020.
Source: Asia Asset Management
KOREA
National Pension Service, with W789.9 trillion ($710 billion) under management as of end-August, has expanded the line-up of managers overseeing its foreign alternative investments to 159, as it increases its exposure to such assets.
The new additions are KKR and Madison Capital of the US and Sydney-based Scape Australia Management. KKR and Scape Australia will manage real estate, while Madison Capital will look after private equity.
NPS raised its alternative investment allocation by W7 trillion to W91.7 trillion between January and August. Around 70% of those assets are invested overseas. The pension fund plans to invest another W8.3 trillion in alternative assets by December 31.
Source: Asia Asset Management, citing Korea Economic Daily
Samsung Fire & Marine Insurance is expanding its footholds in China and Europe to find new revenue sources in overseas markets amid growing saturation in the local insurance industry.
The insurer signed a contract to establish a joint venture in China under partnership with e-commerce giant Tencent on November 26. The Samsung affiliate will own a 37% stake in the joint entity, with Tencent becoming the second-largest shareholder with a 32% stake. Other Chinese tech and financial firms will also invest in the joint venture and their combined stake will reach 31%.
MALAYSIA
The Employees Provident Fund (EPF) wants brokerages in Malaysia to incorporate environmental, social and governance (ESG) considerations into their research process alongside traditional financial metrics, from next year, or risk being dropped from its panel of brokers.
This comes after the RM929.64 billion ($228.4 billion) fund set up its Sustainable Investment Centre in February with the primary role of formalising the fund’s framework and policy for sustainable investments, slated to be launched next month.
Source: The Edge Markets
Malaysia Airlines’ parent company has sought financial aid from its sole shareholder, Malaysian sovereign wealth fund Khazanah Nasional, as debt restructuring talks with creditors drag on.
Malaysia Aviation Group said it was not in a position to comment on an amount, but it could be seeking as much as $500 million, said unnamed sources.
Khazanah said any funding for the airline would depend on the outcome of discussions with creditors and lessors, which it said was crucial to the success of the restructuring.
Source: The Edge Markets
SINGAPORE
Sovereign wealth fund GIC is set to launch an India-dedicated public market fund of up to $3 billion in mid-2021. It has hired Aditya Agarwal from India-focused private equity firm WestBridge Capital to head the fund.
GIC will form a team of four or five executives for the new fund. Prior to WestBridge, Agarwal was among the first members of the India team at International Finance Corporation.
Source: The Economic Times
Ray Dalio, the billionaire founder of Bridgewater Associates, is opening a family office in Singapore to run his investments and philanthropy ventures throughout the region.
Dalio has long held ties to Asia and Singapore and felt it was “high time” to open a family office there, the hedge fund manager’s spokesperson said in a statement.
The Bridgewater founder “has had for the last three decades excellent relationships in Singapore and China", according to the statement. “He likes and admires both and he is excited by what is happening in the region.”
Source: Bloomberg
SRI LANKA
The Central Bank of Sri Lanka has decided to implement front-to-back-office investment platform SimCorp Dimension to manage the investment operation of its official reserves.
The solution, provided by Danish technology vendor SimCorp, will handle all of the central bank’s internally and externally managed funds and coverage of a wide range of instruments, from fixed income to money markets and gold.
Source: SimCorp
TAIWAN
Shin Kong Life Insurance has reduced its overseas investment allocation to 39% from 43% to comply with the local Financial Supervisory Commission’s (FSC) requirements.
As a result, Shin Kong had NT$46 billion ($1.6 billion) in foreign stocks as of the end of September, down from NT$105 billion as of the end of June. The company also disposed of some foreign bonds, but did not reveal the amount. To offset the impact of the adjustment, Shin Kong said it was looking at new investment targets such as local real estate.
The FSC had on September 15 demanded that the insurer lower its overseas investment ratio given the firm’s poor internal controls and reckless investing, which endangered its solvency.
Source: Taipei Times
Foreign exchange losses and hedging expenses continue to climb for Taiwan’s life insurers, rising to NT$236.4 billion ($8.21 billion) at the end of October thanks to appreciation of the New Taiwan dollar against the US dollar, the Financial Supervisory Commission (FSC) said on November 26.
The local currency had risen 3.9% against the greenback this year as of November 28, resulting in higher FX risks for life insurers. Two-thirds of their investment portfolios, worth some NT$18 trillion, are overseas or in US dollars, FSC data showed.
Source: Taipei Times
An investment executive at Taiwan's Labor Insurance Fund and a private asset company executive have allegedly colluded to drive up the price of a stock. The LIF is under the umbrella of the Bureau of Labor Funds (BLF).
A PJ Asset Management executive surnamed Chiu allegedly began in July to bribe BLF domestic investment division director Yu Nai-wen to use BLF accounts to buy shares of a certain company at a cost higher than market value so as to drive up the price, according to an investigation conducted by prosecutors and the Agency Against Corruption. The investigation found that more than 400 shares of the company had been purchased in that manner.
Chiu posted NT$300,000 bail on Friday (November 27), while Yu is still detained.
INDONESIA
The US government may invest in Indonesia’s new sovereign wealth fund, which has also invited private equity firms such as Blackstone and Carlyle to commit capital as it seeks to raise up to $15 billion.
The US International Development Finance Corporation (DFC), signed a letter of interest that could result in it investing $2 billion in the SWF, according to Indonesia’s ministry for maritime affairs and investment.
Luhut Pandjaitan, Indonesia’s minister of maritime affairs and investment, also approached BlackRock, EIG Partners, Global Infrastructure Partners, Stonepeak, I Squared Capital and JP Morgan, according to Indonesia’s ministry for maritime affairs and investment, which is helping to set up the vehicle.
Source: Financial Times
INTERNATIONAL
Few US insurers have reported altering their investment strategy in response to considerations of the impact of climate change on their investment portfolios, new research has found.
The National Association of Insurance Commissioners' (NAIC) Center for Insurance Policy and Research published the report on November 23.
Engagement in climate-related activities has increased since the NAIC started the survey in 2010, and more than half of companies now report at least some engagement in enterprise-wide climate risk management.
Source: NAIC
The pension fund for the Dutch construction sector, Bouw, plans to increase its allocation to real estate from 16% to 19% by the end of 2023 by seeking investments in Asia, Europe and the US, said Erik Hulshof, a trustee of the fund. Dutch pension funds invest, on average, 8.6% of their investment portfolios into real estate.
Bouw has €1.9 billion available to invest in predominantly foreign property projects with a view to reducing concentration risk, Hulshof added. “Over the past few years we have invested a lot in newly built residential real estate in the Netherlands.”
Source: IPE