Insto roundup: MAS shifts $45b to GIC; GPF mulls alts increase

AUSTRALIA

Ian Silk, the chief executive for AustralianSuper and president of the Australian Council of Superannuation Investors, said superannuation funds are in breach of their duties and the law if they fail to consider environmental, social and governance (ESG) risks when investing with retirement savings of their members.

Silk warned that millions of Australians will lose out if companies and investors don’t consider ESG concerns and that strong financial returns will no longer suffice.

"Clearly, then, taking steps to improve companies' ESG performance is in members' best interests,” he said. He added that failure to manage ESG risks will result in "reputation damage, regulatory scrutiny, civil and criminal litigation ... and profit downgrades.”

Source: The Sydney Morning Herald

Brisbane City Council announced on May 7 that it will spend A$20 million every year from the City of Brisbane Investment Corporation (CBIC), its 'future fund' to buy bushland and build new parks, Adrian Schrinner, lord mayor said.

Schrinner said that the council’s CBIC dividend ranged from A$10 million to A$20 million each year, which will “now go straight back into buying new parkland”.

CBIC, established in 2008, has expanded its assets to A$273 million ($189.8 million) and generated A$110.7 million in dividends over the past decade.

Source: Brisbane Times

Almost 80% of Australian superannuation funds and asset managers would consider outsourcing to aid end-to-end trade execution and middle office operations, a Northern Trust survey showed.

More than 80% of respondents reported increasing overall operating costs while about 75% attributed the rising costs to regulatory compliance or meeting technology and staff expanses. Approximately 100 respondents with more than $1.5 trillion in assets under management (AUM) from superannuation funds and asset managers in Australia were polled.

Source: Funds Global Asia

CHINA

China’s People’s Bank of China (PBOC) and State Administration of Foreign Exchange (Safe) are jointly consulting the public about relaxation in rules to facilitate foreign investors’ investments in the China interbank bond market (CIBM).

An institutional investor who has a bond account under the Qualified Foreign Institutional Investor scheme or the Renminbi Qualified Foreign Institutional Investor scheme, and a bond account under the CIBM direct investment item can conduct non-trading bilateral transfers of assets between the two accounts, among other proposals.

The public can submit their opinions on or before May 25.

Source: PBOC, Safe

INDIA

The provident pension funds of almost 2,000 companies stand to lose around INR90 billion ($1.28 billion) after investing in non-convertible debentures of firms affiliated to debt-laden group IL&FS, which has begun defaulting on its debt payments.  

Losers include funds for comapnies such as State Bank of India, Bharat Petroleum Corporation, Indian Oil Corporation, Infosys and Tata power. They will have to make good on the loss in principal and interest income by their funds, as per the rules set out by the Employees’ Provident Fund Scheme (EPFS). 

The IL&FS Group's total outstanding debt is over INR92 billion, and is owed to a combination of banks, mutual funds, insurance companies, pension funds and other financial creditors.

Source: Business Standard

KOREA

KDB Life Insurance is gearing up to go public this year, in a move separate from the Korea Development Bank's (KDB) plan to sell its insurance unit, KDB Life Insurance CEO Chung Jae-wook said.

KDB owns a 92.73% stake in the insurance unit that was acquired the formerly named Kumho Life jointly with Consus Asset Management in 2010. The state-run bank has so far injected about 1 trillion won to keep the company afloat.

KDB has attempted to sell the insurance outfit twice, once in 2014 and again in 2016, only to fail. Now its plans to list the insurer to reclaim its investment.

Source: Korea Times

Samsung Fire & Marine (SFMI) Insurance has made an equity investment in Canopius, one of the 10 insurers in Lloyd’s of London, advancing into the global specialist insurance market.

SFMI announced it has agreed to acquire a stake of more than 10% in Canopius and has entered into a strategic partnership with the Lloyd’s (re)insurer. Specialist insurance covers damage from terrorist attacks and nuclear power plant accidents, damage to artworks and human body parts that traditional insurance policies cannot cover.

SFMI signed a S$150 million investment contract with Fortuna TopCo, the parent company of Canopius, in London on May 2. The deal gives the Korean insurer a seat at the board of Canopius, allowing it to directly participate in the company’s management.

Sources: Business Korea, Korea Times

SINGAPORE

The Monetary Authority of Singapore will pump $45 billion into Singapore sovereign wealth fund GIC from the country's official foreign reserves during May to support longer-term investments, as the country has more reserves than it needs for now.

MAS reported the move on May 9, in one of its first disclosures on such transfers, and said that from next year it will also disclose information about its foreign exchange intervention operations from July 2020, without affecting their effectiveness.

Singapore held more than $404 billion in its official foreign reserves as of April. These reserves, managed by the central bank, act as a buffer against financial crises and global economic stresses, as well as to defend the Singdollar when it faces speculative pressures.

Source: The Straits Times

Private equity firm BC Partners and Singapore sovereign wealth fund GIC said on May 13 they would sell their majority stake in financial media and data firm Acuris to Irish software firm Ion Investment Group. Ion will acquire a controlling stake in the company from the two, BC said, not disclosing the terms of the deal. However, the deal size is believed to be for more than $1.3 billion.

Source: Reuters

California-based foodtech startup Impossible Foods raised $300 million in its Series E funding round led by Temasek Holdings and Horizons Ventures, an announcement revealed. In total, the startup has raised more than $750 million.

In addition to blue-chip institutional investors, the Series E round included celebrity investors like Jay Brown, Paul George, Jay-Z, Serena Williams and Katy Perry.

According to the firm, the latest funding round comes amidst unprecedented demand for its flagship product, the plant-based Impossible Burger, which debuted in 2016. Since launching in Singapore in March 2019, sales in Asia have increased more than threefold as it benefited from strong sales in Hong Kong and Macau.

Source: Singapore Business Review

Singapore's second Finance Minister Lawrence Wong declined to reveal the total annual pay of the highest paid executives of sovereign wealth fund GIC and state-owned investor Temasek Holdings in parliament on May 8, claiming the government has no say in the firms’ operational choices.

A Workers Party member of parliament asked Wong about the range of the total pay for these executives, which includes salaries plus annual and performance bonuses. Wong, who is a member of GIC’s board of directors, as well as the minister for national development. said the remuneration was calculated based on performance and industry benchmarks and if they supported a “prudent risk-taking culture”. Part of the remuneration that GIC and Temasek give also considers long-term performance.

Source: The Independent; TODAY Online

THAILAND

Thailand’s $25 billion Government Pension Fund may look to increase its allocation to alternatives beyond its current 15%, according to senior officials from both investors.

Speaking at the Investment management Association Singapore-Bloomberg conference on May 10, Man Juttijudata, assistant secretary-general for GPF, noted that “the interest rate is still low and public equity markets are quite volatile, so we need something with more stable and better returns. Also, when we have more allocations, we will be able to focus on greenfield, emerging market and opportunistic mandates". 

Source: DealStreetAsia

INTERNATIONAL

Canada Pension Plan Investment Board (CPPIB) sees growing opportunities in credit assets in emerging markets such as China, as the C$369 billion ($274 billion) fund looks to raise its EM exposure from 20% of its portfolio to one-third.

Not only are emerging markets more mature and resilient than they once were, but their rule of law is improving, said John Graham, global head of credit investments at CPPIB, speaking at the Salt conference in Las Vegas last week.

That is in contrast to the trend in some developed markets, he said. “There are plenty of European countries that aren’t creditor-friendly and won’t be.”

Source: Chief Investment Officer

Asia accounted for half of the investors in the $2.5 billion debut bond offering from the Asian Infrastructure Investment Bank (AIIB) on Thursday last week. Europe, the Middle East and Africa accounted for 35% and the Americas 16%.

Two-thirds of the investors were central banks or other official institutions, 25% were banks, 5% fund managers, 2% insurers or pension funds, and 1% other organisations.

AIIB is planning further issuance in the near future following this bond, which received triple-A ratings from Standard & Poor’s, Moody’s and Fitch.

Source: Asian Infrastructure Investment Bank

The University of Michigan’s $12.2 billion endowment plans to add an unspecified amount of money to two Asia-focused private-market funds, after committing up to $100 million to them since November.

The endowment had already put $50 million in Hong Kong-based Abax Asian Structured Private Credit Fund III, which makes loans to small- and medium-sized enterprises in China or that have a significant Chinese connection. It has also committed $50 million to Bain Capital Asia IV for buyouts in Asia and Australia.

Source: Bloomberg