ASIA

A consortium of Indian conglomerates – Tata Group, GIC and Hong Kong-based SSG Capital Management – won approval to buy a 44.44% stake in GMR Airports from GMR Infrastructure for an undisclosed amount. 

The deal will carve out the profitable airports business into a separate entity, which would then be demerged from the other non-airports businesses. The airports segment has churned out cash steadily in the last few quarters, and boosted GMR’s overall Ebitda. 

Source: Livemint

AUSTRALIA 

The Australian Prudential Regulation Authority (Apra) said it would reveal the results of its review of individual funds, or so-called "heatmaps" in early December. The heatmaps will rate more than 100 default MySuper funds in key areas of returns, fees, costs and sustainability, which includes features such as member demographics and inflows versus outflows.

Apra deputy chair Helen Rowell said there was a vast difference between the net returns of the top MySuper fund performers compared with the bottom, and that "public exposure" of poor performance would spur fund trustees to fix their issues.

"Apra is effectively turning up the heat on underperformers to lift their game or risk being forced out," she added.

Source: Sydney Morning Herald

Australian pension funds, including UniSuper, IFM Investors and First State Super, are stepping up direct lending to companies, following their global peers into the booming market for private credit in a hunt for higher-yielding assets.

Globally, private credit, which includes distressed debt and venture financing, ballooned from $42.4 billion in 2000 to $776.9 billion in 2018, according to Preqin, a London-based research firm. Australian superannuation funds have been hesitant to get into the space but are starting to seek opportunities.

UniSuper is most of the way to completing a A$200 million mandate with Tanarra Credit Partners that focuses on sub-investment grade senior secured loans. It is in discussions with First Sentier Investors, a unit of Mitsubishi UFJ Financial Group, for a specialised credit mandate, said Nick Footner, Unisuper's head of fixed interest and cash. 
 
Source: Bloomberg

The wall of capital waiting to be deployed in private assets is driving prices up to untenable values, warned two of Australia’s top investment chiefs. 

“Prices are too high and that’s partly because cash rates have come down so investors are taking on too much debt for these assets which, in turn, has inflated prices," said Sunsuper CIO Ian Patrick, at the Australian Superannuation Fund Assocation conference in Melbourne. But he admitted: ”We are looking at very low interest rates, so what do you choose? The somewhat compressed returns for private assets or the near zero or negative returns for bonds?”

First State Super CIO Damian Graham said his fund was trying to build its position in unlisted assets without overpaying: “We felt that building core assets and taking on some complexity made sense with regards to avoiding the price pain issue as much as possible. We got there in a price-sensitive fashion but we traded some price risk for complexity risk."

Source: Investment Magazine

CHINA

China Investment Corporation, BNP Paribas and Eurazeo have co-signed a letter of intent on France-China Cooperation Fund, which aims to invest in French and European enterprises in sectors including advanced manufacturing, healthcare, environmental protection, and consumption and services.

The fund is to connect these enterprises with the China's industry and market, and further deepen Sino-French trade and investment cooperation.

Source: CIC

JAPAN

Japanese life insurers are betting on real estate to secure high returns, in a shift from their reliance on low-yield government bonds. But analysts warn that the new policy is not without risk.

The moves mark a turnaround for the insurers. Just two years ago, their property investments had shrunk by a third from their peak in 1997. Analysts warn that urban property prices are showing signs of overheating, and that the insurers need to guard against the risk of a market decline.

Source: NHK

KOREA

The Korean government laid out ways the National Pension Services (NPS) can be a more aggressive investor, such as unseating CEOs who have committed crimes like embezzlement.

It wants NPS to be more active in other major decisions made by the companies it invests in, including dividend policy, limiting executive compensation and selecting outside directors and auditors.

The goal, according to the Ministry of Health and Welfare that oversees NPS, is to take greater responsibility for the companies it invests in, ultimately for greater long-term profitability.

Source: Korea JoongAng Daily, Maeil Business News Korea

Companies are expressing concern over NPS’s plan to exercise what they see as excessive shareholder rights, through which it could demand the dismissal of board members of firms in which it holds a stake, industry officials said November 13.

They said NPS's decision-making structure is not independent from government influence, so the plan may result in "pension fund socialism" by which the state can influence private businesses through the fund.

NPS said it will exercise its shareholder rights on companies that are "suspected of violating laws or continuously oppose NPS suggestions". Intervention in such companies will come only after "enough communication", and be limited to a certain level, it added.

Source: Korea Times

A hunt for yield is prompting Korean investors to pile tens of billions of dollars into unconventional assets abroad, raising risks of losses on unfamiliar products.

Holdings of overseas alternative assets such as real estate, infrastructure, private equity and debt, and hedge funds by investors in Asia's fourth-largest economy rose to at least about W201 trillion (172.6 billion) this year, a record, according to data compiled by Samsung Securities and Korea Investors Service.

That compares with W158 trillion held by fund managers, pension funds, insurers and brokerages at the end of 2018 and W118 trillion in 2017.

Source: Bloomberg

South Korea formally gained full membership to an international council tasked with cross-border regulation of insurance markets, the nation's financial regulators said November 12.

The International Association of Insurance Supervisors announced the membership of the Financial Supervisory Service and the Financial Services Commission, two South Korean watchdogs, to the multilateral memorandum of understanding (MMOU), according to a statement released by the two regulators.

The MMOU is designed to expedite cross-border information-sharing over insurance markets, it said. A total of 71 financial regulators from 49 nations joined the international council, the statement said.

Source: Yonhap News Agency

PHILIPPINES

The state-run Social Security System (SSS) announced it is planning to come up with a special programme that will effectively cover Filipinos working in the informal sector like fishermen, farmers and market vendors.

The latest International Labor Organization’s survey recorded 21.2 million Filipinos in informal employment from 2008 to 2017. That is 56% of the country’s labour force.

"A challenge for us now is to create a special pension fund programme for the informal sector workers like farmers and fisherfolks, among other groups, considering their income spread. These are the areas that SSS will look into," said SSS chief executive Aurora Cruz Ignacio. 

Source: Cosmopolitan

SINGAPORE

Singapore state investor Temasek Holdings will go carbon-neutral by next year and is looking to do the same with its portfolio “sooner than later”, chief executive Ho Ching said at an event on November 12. 

As an investment firm, Temasek does not produce goods and services and its carbon emissions are mostly from the consumption of electricity, water, paper and air miles – which it will report from this financial year, said Ho. She was speaking at the Global Compact Network Singapore Summit at the Suntec convention centre.

Temasek has committed to halving the greenhouse gas emissions of its portfolio by 2030, and Ho said it would also “study how we can shape a carbon-neutral portfolio sooner than later”.

Source: Eco-Business

Sovereign wealth fund GIC partnered private equity major BlackRock to acquire Kellas Midstream, a UK gas pipeline and terminal owner, from PE firm Antin Infrastructure Partners. Financial details of the acquisition were not disclosed. GIC said the deal is expected to close in early 2020.

Kellas Midstream owns and operates key gas infrastructure in the UK and Southern North Sea. BlackRock will invest with GIC through its Global Energy & Power Infrastructure Funds III.

Source: DealStreetAsia

GIC also ventured back into the European real estate market, teaming up with Caleus Capital Investors to acquire a landmark hotel in Berlin in an off-market transaction.

The joint venture between the Singapore sovereign fund and the Berlin-based investment firm bought the five-star Hotel de Rome from a fund managed by Commerz Real, according to a joint announcement by Caleus and the property investment arm of Commerzbank.

While financial details of the transaction have not been disclosed, the 145-key hotel is listed by Commerz Real’s Hausinvest fund as being valued at €125.9 million ($139 million). The acquisition comes just over three weeks after GIC paid a reported €530 million for the 40-storey PB6 tower in Paris, and is the latest in a series of overseas property investments by Singaporean investors.

Source: Mingtiandi

INTERNATIONAL (EXCLUDING ASIA)

British insurer Aviva will keep its operations in China and Singapore, it said on November 18, two days ahead of an expected strategy update and following speculation about a sale of the Singapore business. 

Aviva had begun a review of its Asia business earlier this year under new CEO Maurice Tulloch. But the company said it was looking at strategic options for its operations in Vietnam, Indonesia and Hong Kong, where recent protests have threatened the territory's position as one of Asia's major financial centres.

The insurer recently saw its chief investment officer, Jaijit Kumar, leave to join Invesco as Asia-Pacific head of insurance solutions.

Source: Channel News Asia; AsianInvestor

The chief executive of Canada's second biggest public pension fund will depart in February next year after overseeing it for 11 years. During that time it opened its first offices in Asia Pacific and heavily ramped up its investment into the region and globally.

Michael Sabia

Michael Sabia will leave Caisse de dépôt et placement du Québec (CDPQ) to become head of the Munk School of Global Affairs and Public Policy at the University of Toronto.

CDPQ has returned 9.9% annually over 10 years, nearly tripling its assets to C$326.7 billion ($248 billion) from C$120.1 billion. As of December 31, 2009, 64% of CDPQ’s assets were invested in Canada. As at December 31, 2018, this proportion was reversed, with 64% of CDPQ’s assets invested in global markets.

Source: CDPQ

Canada's CDPQ is to invest an additional $75 million in Azure Power, which will increase its equity interest in the Indian solar power developer from 41.4% to 49.4%. The deal is expected to complete in December 2019.

In the spring of 2019, CDPQ said it had raised the target for its carbon-neutral assets under management to C$32 billion by 2020. It also aims to reduce its carbon footprint by 25% per dollar invested by 2025.

Source: CDPQ