Insto roundup: GPIF’s record loss; KIC targets $400b in AUM
AUSTRALIA/NEW ZEALAND
AustralianSuper and three other large pension funds – the Netherlands’ APG and PGGM and Canada's British Columbia Investment Management Corporation – have set up the Sustainable Development Investments Asset Owner Platform (SDI AOP). It enables investors to assess companies on their contribution to the UN Sustainable Development Goals (SDGs).
A lack of quality data to identify contributions to the SDGs has been an impediment for investors, and companies struggle to adapt their disclosures to meet investor needs, said a joint release. SDI AOP provids a globally consistent SDG measurement framework, thereby helping investors to imbed the SDGs into their investment processes, the statement added.
Source: Joint press release
Retail Employees Superannuation Trust (Rest), one of Australia’s largest super funds, has appointed Andrew Lill as chief investment officer.
He joins from Morningstar Investment Management, where he had been the Chicago-based CIO of their $25 billion Americas mutual fund and managed portfolio operations since 2018.
The new CIO role was announced in August 2019, when Rest’s wholly owned investment arm, Super Investment Management, was integrated into the fund’s internal investments team to focus all of Rest’s investment expertise in a single group. Lill will manage this combined team.
Sources: Rest
Australian Super has delivered a small positive return for its balanced option fund despite the global economic damage from the pandemic.
Chief investment officer Mark Delaney told ABC news that the 0.52% return for the 2020 financial year as a good result given the impact on global financial markets.
Source: ABC News
New Zealand’s parliament passed its first reading of a bill that will raise the minimum residency requirement from 10 to 20 years, after age 20.
The Fair Residency for Superannuation bill will have implications for NZ Super. A migrant with just 10 years’ residency in New Zealand is currently entitled to full NZ superannuation without any requirement to contribute to the economy.
“By global standards, the current 10 years is a short time frame for full entitlement to a generous, universal, non-means tested, non-contributory pension at age 65,” said Mark Patterson, a New Zealand First MP.
Source: Scoop
CHINA
Manulife has set up a joint venture with Hong Kong-based ESR and acquired four logistics properties from Redwood China Logistics Fund (RCLF) for Rmb1.7 billion ($243 million), marking the Canadian insurer’s first standalone industrial investment in China.
RCLF is a limited partnership development JV between logistics group ESR and Dutch pension fund PGGM.
The acquisition involves a portfolio of four grade A core logistics assets with some two million square feet of net rentable area, located across Guangzhou, Kunshan, Wuxi and Dongguan.
Source: Joint release
Regulators’ commitment to developing and liberalising China’s insurance industry bodes well for its prospects in the long run, by diversifying investment avenues and encouraging global players to increase their engagement with the local industry, according to Cerulli Associates.
China’s insurers saw robust growth in 2019, with premiums up 12.1% to Rmb3.9 trillion ($545.3 billion), compared to growth of 6.6% in 2018. Due to the impact of Covid-19, year-to-April life premium income fell by 6.8%, compared to the same period in 2019.
However, this could be a blip, given that China has the highest growth potential for non-affiliated life insurance opportunities among Asia ex-Japan markets over the next three years, said 100% of fund managers surveyed by Cerulli last year.
Source: International Investment
HONG KONG
FWD completed the acquisition of MetLife's Hong Kong business on July 2, underlining the Hong Kong-based insurer's continued confidence in the long-term growth potential of the Chinese territory. FWD will rebrand the newly acquired businesses in the next few months.
MetLife said it remains very much committed to Asia after the sale of its Hong Kong business and the insurer has strong positions in the three largest insurance markets in the region, which are China, Japan and Korea.
Source: FWD, Metlife
JAPAN
The Government Pension Investment Fund (GPIF) reported a record quarterly loss of ¥17.71 trillion ($164.74 billion) in January to March after global stock markets plunged during the Covid-19 pandemic.
The world's largest pension fund said it posted a negative return of 10.71% on its assets during the quarter, compared with a 4.61% gain in the previous quarter. For the fiscal year ending March 31, it posted a loss of -5.2%, or ¥8.28 trillion. GPIF's assets under management stood at ¥150.6 trillion at the end of March.
Korea's National Pension Service (NPS) significantly increased its alternative investment exposure in the first four months to April from a year earlier. Industry sources attributed the rise to the fund's improved deal-sourcing capability after it had formed alliances with global pension funds and asset managers.
The $610 billion pension fund said its alternatives allocation grew by a net W5.6 trillion ($4.7 billion) in the January-April period. During 2019 the net growth in NPS’s alternative investments was about W7.6 trillion.
Source: Korean Investors
NPS also reported its highest return rate in 10 years in 2019 amid bullish global stock markets and low interest rates. The state pension fund chalked up a return rate of 11.34% last year, earning W73.4 trillion ($61.1 billion).
The return rate was the highest since the 10.37% it posted in 2010, and the profit the largest since the fund's investment management office was set up in 1999. It was also a sharp turnaround from a negative return of 0.82% for 2018, when NPS logged its second negative return since the global financial crisis in 2008 on tumbling equity markets at home and abroad.
Source: Yonhap News Agency
Korea Investment Corporation (KIC) aims to increase its assets under management (AUM) to $400 billion by 2035 from its current $150 billion, according to the sovereign wealth fund's chief executive, Choi Hee-nam.
He emphasised that KIC would make more socially responsible investments and would strategically allocate its assets in order to nearly triple its AUM within the next 15 years.
"We've achieved significant growth, as the size of assets under our management rose to over $150 billion last year from $100 billion in 2016," Choi said at a seminar to celebrate the institution's 15th anniversary on July 1. "I think our return on assets ... [of] 15.39% last year resulted from our investment capability and knowhow."
Source: Korea Times
KIC is preparing to launch a joint fund with NongHyup, or the National Agricultural Cooperative Federation, to invest in foreign alternative assets as the cooperative is seeking to bolster deal-sourcing capability to achieve higher yields, their senior officials said on July 1.
The fund will target mainly private equity deals for an undisclosed sum. NongHyup chief investment officer Park Hak-joo stressed the importance of deal sourcing, saying that investment targets were limited despite an increase in capital. NongHyup manages W305 trillion ($254 billion) in assets.
Source: Korean Investors
State owned Korea Development Bank (KDB) named JC Partners as the preferred bidder for its insurance unit, KDB Life Insurance, after the private equity firm offered to pay W200 billion ($167 million) for a 92.73% stake in the business. The stake is held by KDB and Consus Asset Management indirectly through a fund and a special-purpose company.
JC Partners was the sole bidder for the life insurer in the final auction, which closed on June 22. KDB had put up the life insurer for sale last September after three failed attempts at divesting it.
Source: Asia Insurance Review; Pulse News
INDIA
Life Insurance Corporation of India (LIC) took advantage of Covid-19 volatility to make fresh investments in 16 stocks during the March quarter. The stocks included HCL Technologies, Hindustan Unilever, IndusInd Bank, Adhunik Metaliks, Amara Raja Batteries, Birla Tyres and Tata Consumer Products.
After hitting a record high in January 2020, Indian equity benchmarks crashed 40% to hit around four-year low on March 24. The indices have since recovered on the back of liquidity from global central banks and the gradual reopening of economies despite virus risks.
Source: Money Control
MALAYSIA
Malaysia's largest pension fund, the Employees Provident Fund, is investing more overseas as it seeks to beat the 4% to 5% return it has been achieving.
"We will definitely aim for that," Alizakri Alias, EPF chief executive, said in a Bloomberg TV interview. "But I think you know as well as I do, times are extremely challenging."
EPF, whose assets grew 10.9% last year to RM924.8 billion ($215.7 billion), has been expanding its global portfolio to maintain high dividends for Malaysian workers in the face of limited opportunities onshore, he said.
Source: The Straits Times
SINGAPORE
Singapore state investor Temasek is in discussions with Zomato to pump as much as $100 million into the Indian online food delivery company, according to people aware of the developments.
This comes as a previously announced investment by China's Ant Financial has been delayed amid rising anti-China sentiment and new foreign direct investment rules in India.
Temasek is an existing backer of Zomato, and the potential new funding is part of a larger investment round that the Indian company has been negotiating since the end of last year.
Source: The Economic Times
Google and Temasek are in talks to join a funding round of between $500 million and $1 billion for Indonesian e-commerce giant PT Tokopedia, according to people familiar with the matter.
Tokopedia, an online marketplace backed by SoftBank’s Vision Fund, has held talks with US internet giants including Facebook, Microsoft and Amazon, the people said. But Google and Temasek have been more active in their negotiations and those talks may conclude in coming weeks, they said.
Source: Bloomberg
Nasdaq-listed Biontech, which is testing a possible Covid-19 vaccine, said on June 29 it had raised $250 million from Singapore's Temasek and other accredited investors in a private placement.
"We are pleased to welcome Temasek on board as a new shareholder. We believe their long-term investment approach, global presence and deep experience in the biotechnology field are a good fit," Ugur Sahin, the German company’s chief executive and co-founder, said in a statement.
Source: Nikkei Asian Review
TAIWAN
The Bureau of Labor Funds (BLF) is inviting bids for a five-year $2.3 billion enhanced global US dollar corporate bond mandate. Managers should submit their proposals on or before August 10.
AsianInvestor reported last month that the institution had been planning to invite bids for the portfolio and that it would apply ESG principles to the mandate.
Source: BLF
INTERNATIONAL
The Emerging Markets Private Equity Association (Empea) has appointed Suyi Kim, head of Asia Pacific at Canada Pension Plan Investment Board, to its board of directors.
“Suyi Kim brings a unique Asian sensibility to our board and a breadth of experience across all types of private investing on behalf of one of the world's truly great institutions, CPP Investments,” said Empea chair Nicolas Rohatyn, who is also chief executive of The Rohatyn Group.
Source: Empea