Insto roundup: India supplants China for SWFs; NPS’s $1.5b property JV
India has quietly replaced China as the most sought-after destination for global sovereign wealth funds investment in the private sector – a sign of the country’s growing attraction for investors.
In 2020 these funds have deployed capital worth a record $14.8 billion in India, more than three times the amount they have put into China ($4.5 billion), according to New York-based research house Global SWF.
The gap between the capital deployed in the two countries widened this year, but the trend started in 2019 due to the US-China trade tensions.
Source: Business Standard, Jagran Josh
Sovereign wealth funds have stepped up their private market investments after the coronavirus crisis, but with valuations still high despite a shaky economic backdrop there are questions about the prospects for future returns.
While funds have increased the portion of their outlay in public equities in 2020, private markets still account for the largest chunk of overall investment at $55.5 billion year to date, up from $35 billion last year after a pick-up in deals in the second half, according to the London-based International Forum of Sovereign Wealth Funds.
Current asset prices are still very high despite uncertain economic conditions, raising questions of whether 2020-21 deals will be a good vintage, said Will Jackson-Moore, global private equity, real assets and sovereign funds leader at consultancy PwC.
Seven in 10 institutional investors and asset managers were able to meet their investment performance targets over the last 12 months, found a survey of some 600 company representatives by State Street published on December 10.
Two-thirds (66%) of Asia Pacific investors said they were optimistic about achieving their growth targets over the next five years, up from 62% in the 2019 survey but lower than the 77% figure globally.
More than half (56%) were likely to outsource more activities not central to the pursuit of their strategic goals, while the same percentage planned to consolidate or reduce the number of outsourcing partners to focus on deeper, more strategic relationships in the next 12 months.
Source: State Street
Aware Super has completed its merger with WA Super, extending Aware’s presence in Western Australia.
This is the superannation fund's second merger this year, the first being with Melbourne-based VicSuper. Aware Super now has 1 million members and manages A$135 billion ($102 billion).
Source: Aware Super
Cbus Super has partnered with Brookfield Asset Management to invest in the built environment and with Capital Dynamics to invest in renewable energy.
The super fund’s partnership with Brookfield aims to capitalise on themes that have been accelerated by the pandemic, such as the need for digital connectivity and sutainability. Meanwhile, Cbus’s partnership with Capital Dynamics involves the acquisition of two solar photovoltaic projects.
Indian property developer RMZ could soon sign delayed deals with Canada Pension Plan Investment Board (CPPIB) and Japan’s Mitsui for commercial properties, after striking a Rp150 billion ($2 billion) deal with Brookfield Asset Management.
Both deals were supposed to be signed in March but got delayed due to the lockdown. RMZ and CPPIB were planning to sign a deal for the former's Chennai assets, while Mitsui and RMZ wanted to ink a deal for its Bengaluru properties.
Mitsui and CPPIB were each looking to invest a similar amount, in the range of Rp12 billion to Rp15 billion, reports said late last year.
Source: Business Standard
Government Pension Investment Fund (GPIF) and Export Development Canada (EDC) have formed a partnership to promote and develop sustainable capital markets through a focus on green bonds, as well as the incorporation of ESG assessments in fixed income investments.
“We regard purchase of green, social and sustainability bonds as one of the direct methods of ESG integration in the fixed income investment,” Miyazono Masataka, president of GPIF. We hope that this partnership will catalyse investment capital into sustainable investments."
Four major Japanese life insurers – Nippon Life, Dai-ichi Life, Meiji Yasuda Life and Fukoku Mutual Life – have vowed not to invest in nor lend to producers of nuclear weapons or companies related to them, as part of their socially responsible investing efforts.
Meanwhile, Sumitomo Life, which does not have guidelines on investing in nuclear weapons companies, said it would consider exercising investment restraints once the United Nations treaty that banned nuclear weapons took effect in January.
Source: Japan Times
The National Pension Service of Korea (NPS) and Hines have formed a $1.5 billion equity joint venture that invests into modern spaces across real estate.
The JV will pursue urban infill developments across a broad span of sectors including mixed-use, residential, office and logistics in high-barrier-to-entry markets globally, and 20% of the venture is committed to projects in North America and Asia Pacific.
It targets a build-to-core strategy to create a portfolio of prime assets resilient to market uncertainties. NPS and Hines believe that long-term investments in proven locations, supported by innovation and new technology, will capture sustained demand and create outsized value.
Public Officials Benefit Association is looking to hire an international fund manager for a $100 million 10-year mandate to invest in foreign property companies and trusts.
The investments will focus mainly on real estate investment trusts and listed property companies in the US, Japan, Europe and the UK, the $12 billion pension fund said in its request for proposal. The document was published on the website of the Korea Financial Investment Association on December 8. The mandate is benchmarked against the FTSE Epra Nareit Developed Index.
The tender is open until December 23, with manager evaluation and selection scheduled to be carried out from December 29 to January 31.
Source: Asia Asset Management
Sovereign wealth fund Abu Dhabi Investment Authority (Adia) said in its 2019 annual review it saw China and India as key drivers of global economic growth, and climate change and data centres as investment opportunities.
“On a geographic basis, we continue to see China and India as key drivers of global growth in the years to come,” said managing director Hamed bin Zayed al-Nahyan in the report, which was published on December 8. He added that African countries were among those offering the greatest potential for long-term investors.
Adia said in the report it achieved 20- and 30-year annualised rates of return of 4.8% and 6.6% respectively as of end-2019, compared to 5.4% and 6.5% in 2018.
Abu Dhabi sovereign wealth fund Mubadala is considering spinning out or unwinding an internally managed $500 million public equities fund after weak performance, two sources said, as the emirate shakes up state entities amid lower oil prices.
Mubadala, which manages $230 billion in assets, plans to take a decision on what to do with its long/short public equities fund by early next year, the sources said. The fund is down to around $500 million from a peak of $1 billion. One of the sources said the fund had piled up too many illiquid assets in its portfolio.
This review comes after Abu Dhabi’s biggest SWF, Abu Dhabi Investment Authority, shut down a concentrated long-only equities fund, which managed nearly $5 billion at its peak, two sources said.
Source: VC Circle
New Zealand infrastructure investor Infratil rejected AustralianSuper’s NZ$5.37 billion ($3.8 billion) takeover bid as too low on December 9.
The Australian super fund had offered $7.43 per share, which the Infratil’s board said undervalued the company’s “high quality and unique portfolio of assets”.
AustralianSuper manages A$180 billion ($136 billion), and Infratil owns a wide range of assets including 66% of Wellington Airport and 49.9% of Vodafone NZ.
Source: ABC, NZ Herald, Infratil
The Manila-based Asian Development Bank joined 11 multilateral development banks (MDBs) and the International Monetary Fund on December 11 in launching a first-ever joint report on financing sustainable development goals.
MDBs have collectively mobilised a global response package of $230 billion between 2020 and 2021 to reduce the impact of the pandemic, of which $75 billion will be directed to the world’s poorest countries before the end of 2020.
Source: Asian Development Bank
Sovereign wealth fund GIC led a round of financing that raised nearly $100 million to invest into Huice, a Chinese software-as-a-service provider for the smart retail sector..
GIC was joined by SoftBank, Legend Capital and Hillhouse Capital’s venture fund GL Ventures for the series C round of financing for Huice. The startup previously raised Rmb162 million ($24.7 million) in a series B round led by Legend Capital in May, which followed a Rmb100 million series A round from TPG Capital and SoftBank last year.
Temasek International's head of sustainability and stewardship group Robin Hu will leave his role at the end of this year, with some of his key functions taken over by Ikea's former chief sustainability officer, Steve Howard. He will start on January 1.
Hu is shifting to lead the state investment fund’s international policy and governance group and has been appointed chair of Mandai Nature Fund, which has been established with Mandai Park Holdings to support conservation efforts.
The move comes as investors around the world face increasing pressure to cut their carbon footprint and improve the sustainability of their investments. Temasek has a goal of halving the net carbon emissions attributable to its portfolio by 2030 and reaching net zero emissions by 2050.
Source: Straits Times
The chief executive of Taiwan's PJ Asset Management and three others have been detained and held incommunicado as part of an investigation into the alleged bribery of Yu Nai-wen, head of domestic investment at the island's Bureau of Labor Funds (BLF).
In July, executives from PJ met Yu and the latter agreed to buy the stocks at artificially high prices using money from BLF, according to the regulator.
Source: Focus Taiwan
Fubon Life Insurance invested $130 million into two private equity funds from Chinese private equity firm Hillhouse Capital. The insurer invested $65 million into each fund.
Source: Private Equity International
Taiwan’s Financial Supervisory Commission (FSC) plans to launch a retirement-focused fund platform offering investment choices such as annuities as early as June 2021.
Chang Chen-Shan, director-general of the FSC’s securities and futures bureau, said the platform would complement the current FundRich scheme to promote voluntary retirement savings.
The regulator said FSC would set up a dedicated committee to identity appropriate funds, and provide management and administration fee concessions to entice more people to join.
Source: Asia Asset Management
British insurer Aviva is selling its Vietnamese business to Canadian rival Manulife Financial, as it pushes ahead with plans to pull out from its non-core markets.
Manulife said in a separate statement that it had also agreed a 16-year bancassurance partnership with VietinBank as part of the Aviva deal, giving the Canadian insurer a major boost in one of Asia’s rapidly growing markets.
Aviva, under new boss Amanda Blanc, is looking to sell its operations in continental Europe and Asia, to focus on Britain, Ireland and Canada. It sold a majority holding in its Singapore business in September and last week completed the sale of its Hong Kong joint venture as part of its group restructuring.