AUSTRALIA/NEW ZEALAND

UniSuper has offloaded stakes in two ASX-listed coal miners, New Hope and Whitehaven Coal, in another sign that the superannuation fund sector is turning its back on the fossil fuel industry. 

The fund would not comment on whether the move was part of a wider climate policy to restrict exposure to fossil fuels.

UniSuper has also sold its holdings of investment firm Washington H. Soul Pattinson, which has been targeted by shareholder activists over its major stake in New Hope coal mine.

Source: The Sydney Morning Herald

New Zealand Superannuation Fund and Ontario Teachers’ Pension Plan have agreed to acquire Australian private hospital owner Healthscope’s New Zealand pathology business for NZ$570 million ($529 million).

Source: Financial Review

INDIA 

Life Insurance Corporation of India (LIC) disclosed weakening financials and a surge in bad loans, hit by high exposure to stressed sectors such as real estate, the growing inability of borrowers to repay loans and downgrades of certain investments amid the Covid-19 pandemic. 

This may pose a challenge to the government’s plan to divest its stake in the insurer through a mega share sale. The government is likely to divest up to 10% stake in LIC to meet its divestment target and compensate for the widening fiscal deficit. 

Source: Live Mint 

JAPAN

The Government Pension Investment Fund (GPIF) revealed it had bounced back from a terrible fiscal year ending March 31, recording an 8.3% jump in its assets under management to ¥162.09 trillion ($1.53 trillion) in the three months to June 30.

The world's largest pension fund made a return of ¥12.49 trillion during the quarter, versus the ¥8.28 trillion it lost in the fiscal year ending in March. The bounceback came almost entirely as a result of equities; GPIF's foreign equities posted a 19.99% return, while domestic equities returned 10.95% during the three-month period.

Equities comprise 50% of GPIF's investment portfolio, which is almost entirely externally managed

Source: GPIF

GPIF has also called for applications from infrastructure and real estate fund-of-fund managers as it seeks to expand its exposure to global alternative asset classes.

The pension fund wants to raise its real asset exposure from 1% to 5% and announced requests for proposals for separate accounts covering infrastructure, real estate and private equity “inside and outside Japan”. It is seeking exposure to core and brownfield infrastructure on a global basis, and core real estate in Japan, Europe and North America, as well as global private equity strategies.

GPIF has introduced an investment manager registration system for alternative assets to collect information on various investment strategies, to have more flexibility on manager selection and to gain access to new investment ideas and expertise of asset managers.

Source: Japan Times

KOREA

Korean insurance firms are rushing to sell buildings ahead of the introduction of new solvency rules, to secure additional capital for the real estate they own in case its value falls.

The Korean-Insurance Capital Standards, set to come into force in 2023, apply stricter standards on the financial health of insurers, which calls for them to increase their capital base.

Shinhan Life is looking to sell L Tower, where its headquarters are located in central Seoul. Hyundai Marine & Fire Insurance chose Korea Real Estate Investment & Trust as the preferred bidder for the sale of its building in southern Seoul at W360 billion ($303.5 million) in June. Hanwha Life Insurance and Kyobo Life Insurance are also selling various buildings in Korea.

Source: Korea Times

SINGAPORE 

Developer Yanlord Land Group is partnering Singapore sovereign wealth fund GIC to co-invest in residential projects in China. 

Its wholly owned subsidiary, Yanlord (China) Investment Group, has entered into an agreement with a GIC affiliate to form an investment platform for that purpose, the company said in an exchange filing on August 4. 

Under a "cooperation programme", the two parties will invest up to Rmb7 billion ($1 billion) over a seven-year period, and have the option to extend the programme by another two years. 

Source: The Straits Times 

Chandra Shekhar Ghosh

GIC and US fund house BlackRock bought shares in Bandhan Bank as the main shareholder of the Indian bank sold Rp106 billion ($1.41 billion) of its stake to meet the regulator's ownership rules. 

Temasek Holdings and SBI Mutual Fund also bought shares, Bandhan founder and chief executive Chandra Shekhar Ghosh said. GIC got the Reserve Bank of India's approval to raise its stake in the lender to 10% from 4.9%, he added.

Source: The Business Times 

Canada's Sun Life Financial has opened a branch in Singapore to offer life insurance solutions to high-net-worth clients. 

The move extends the insurance firm's presence to eight markets in Asia and reinforces its position in the international high-net-worth life insurance market.

Source: Insurance Business Asia 

TAIWAN

The Bureau of Labor Funds' (BLF) pension funds has posted the first January-June investment loss since it began to manage them centrally in 2014. Their assets under management shrank almost 6% from end-2019 levels as the portfolio was hit by the coronavirus pandemic.

The seven funds incurred an investment loss of NT$158.2 billion ($5.38 billion) in the first half of 2020, shedding 3.43% through the six-month period. That compares with a NT$320.9 million profit in the first half of 2019, when its investments gained 7.55%.

BLF said it had been beefing up risk controls to address uncertainties stemming from the crisis and from the worsening relationship between China and the US.

Source: Asia Asset Management

THAILAND 

The Social Security Office is considering extending low-interest loans to registered workers dealing with financial uncertainty posed by the Covid-19 pandemic. 

Pitsamai Nithipaiboon, the SSO's deputy secretary-general, said a loan scheme was being planned after calls had been made by subscribers of the Social Security Fund (SSF) who wanted to draw money from retirement funds to alleviate economic hardship. 

Pitsamai said social security laws did not allow SSF members to withdraw money from the funds and that amending regulations would take time to conduct. 

Source: Bangkok Post 

INTERNATIONAL

Ben Meng

Ben Meng’s resignation as chief investment officer of the California Public Employees’ Retirement System (Calpers) last week may have been triggered as much by potential conflicts of interest around his personal shareholdings as by pressure on him over his alleged links to the Chinese government.

Officials said Meng’s state financial disclosure filings show he did not reveal personal stock sales and that he had a potential conflict of interest by holding shares in three private equity firms that did business with the pension system – Ares Management, Blackstone and Carlyle Group.

An emergency meeting of Calpers’ board members will be held on August 17 as state regulators examine whether Meng violated state law with his financial filings.

Sources: Bloomberg; Chief Investment Officer

The average US endowment has underperformed its target returns in several key areas in the 58 years to June 2019, says a new study by investment advisory and index techology firm Veriti Management.

The findings showed that over the period researched, the average endowment significantly underperformed its annual return need, its typical long-term return objective and the traditional 60/40 passive benchmark. Moreover, over fiscal years 2009-2018, the average endowment failed to earn its long-term return objective in even a single year.

These findings should be “a serious cause for concern for most trustees, and their stakeholders”, said Dennis Hammond, head of institutional and responsible investments at Veriti.

Source: Veriti Management