AUSTRALIA
First State Super and VicSuper have signed a non-binding memorandum of understanding for a merger that would create a pension fund giant with more than A$110 billion ($78 billion) in assets under management.
“Merging with First State Super would enable us to achieve greater benefits of scale, including access to a broader range of investment opportunities and an even greater ability to generate strong, sustainable returns over the long term," said Michael Dundon, chief executive of VicSuper.
First State Super and VicSuper have A$91 billion ($64.6 billion) and A$22 billion in assets under management, respectively. The plan to consolidate them followed the completion of that of Sunsuper and AustSafe, in an industry where under-performing funds are increasingly scrutinised.
Source: Bloomberg, Financial Standard
QBE Insurance has planned to stop offering new policies for thermal coal mines and coal-fired power stations to combat climate change, starting July 1.
The Australian insurer will phase out its direct insurance services for the thermal coal clients by 2030 but will still invest and cover metallurgical coal and oil and gas companies.
“We are acutely aware of the risks and opportunities that climate change presents for our customers and our business,” the insurer said in a weekend statement.
Source: Reuters
CHINA
China’s sovereign wealth fund has gone relatively quiet in terms of offshore investing, having not received any new funds for that purpose since 2012 – and its new chairman faces an uphill battle to change that situation.
China Investment Corporation’s last major overseas venture was a €12.25 billion ($14.2 billion) acquisition of European logistics company Logicor from Blackstone's real-estate fund in 2017 — its biggest-ever purchase.
Peng Chun, formerly the chairman of Bank of Communications, may struggle to revive the near-$1 trillion fund’s role as a very active overseas investor, and not just because fresh funds are lacking. He lacks the deep political connections of his predecessors Ding Xuedong and Lou Jiwei, plus the global investment backdrop is unappealing.
Source: Bloomberg
Chinese vice premier Zheng Han has urged local authorities to implement measures to lower the pension insurance contributions of enterprises. Localities and related departments must ensure a substantial reduction in the actual burden of companies, he said.
The country will reduce the share borne by employers for urban workers' basic pension insurance, and localities may cut corporate contributions down to 16%, according to this year's government work report.
Source: Xinhua
ABL Life's board chairman, Xie Zheqiang, will serve as the insurer's new chief executive, according to the company. The firm nominated Xie as its new CEO and this was approved at a general shareholder's meeting last week.
Xie, 52, will continue to serve as the chairman of the insurance company's board of directors. Former CEO Sun Lei left for "new career opportunities," although the company declined to specify what these were.
ABL is owned by China's Anbang Insurance and Tongyang Life. The Chinese government has been managing ABL since February 2018, to reduce financial risks, following the arrest of group chairman Wu Xiaohui for alleged fundraising fraud and embezzlement. This has put constraints on ABL's business. The China Insurance Regulatory Commission will control the group until February 22 next year.
Source: The Korea Times
INDIA
Bank of India on Friday (April 5) announced has announced it is selling its 25.05% stake in Star Union Dai-ichi Life Insurance, its joint venture with Union Bank of India and Japan’s Dai-ichi Life. In its request for proposal (RFP), the public sector lender said it is proposing to sell 64.8 million of equity shares worth about INR11.06 billion ($204.81 million).
Bank of India has invited non-binding bids to its partial stake sale with a floor price of INR170.50 per share. Bank of India has a 28.96% stake in the joint venture, while Union Bank of India and Dai-ichi Life own 25.10% and 45.94%, respectively.
Source: Financial Express
JAPAN
Japan’s $196-billion Pension Fund Association for Local Government Officials, or Chikyoren, has picked Sumitomo Mitsui Asset Management and UBS Asset Management to manage its overseas alternatives investment mandates, according to an announcement. These are Chikyoren’s first outsourced mandates of 2019.
Sumitomo Mitsui AM will manage the private equity portfolio and UBS AM will oversee the PFA’s fifth foreign infrastructure mandate. The pension fund did not disclose any other details, including the amount of funding the managers will be given.
Chikyoren ventured into alternative investments three years ago but had until now confined itself to foreign infrastructure assets. It is Japan’s second largest pension fund and had ¥10.6 trillion ($96.8 billion) of total assets at the end of 2018.
Source: Asia Asset Management, Deal Street Asia
Japan Post Holdings said Thursday (April 4) that it will sell up to 30% of its outstanding shares in subsidiary Japan Post Insurance by the end of this month. The value of the sale of up to 185 million shares will be around ¥440 billion ($3.95 billion).
Japan Post Insurance said the same day that it will buy back its own shares worth up to ¥100 billion between Monday and April 12. Japan Post Holdings’ stake in the unit is expected to fall to about 65%. The company plans to use the proceeds from the share sale for strategic investment to boost the group’s corporate value, officials said.
Japan Post Holdings is expected to use part of the funds to acquire a stake in US insurance giant Aflac later this year, informed sources said. The postal service holding company announced the investment plan in December. Japan Post Holdings plans to sell all of its equity stakes in Japan Post Insurance and another key financial unit, Japan Post Bank, based on the postal privatisation law. It initially aims to lower the stakes to about 50%.
Source: Japan Times, Sovereign Wealth Fund Institute
MALAYSIA
Malaysia’s state-owned private equity fund management company Ekuiti Nasional (Ekuinas) has sold its 60% shareholding in two third-party claims administrator service providers to Japan’s Sumitomo Corporation for an undisclosed sum. Ekuinas acquired the stakes in MediExpress Group and PMCare in 2015 for MYR79.8 million ($19.55 million).
Ekuinas said the sale brings total proceeds realised from its divestments in investee companies since it was set up in 2009 to more than MYR2 billion. Ekuinas had MYR4.1 billion of funds under management at the end of 2017.
Source: Asia Asset Management
MYANMAR
Five foreign companies have been granted provisional licences to issue life insurance policies through subsidiaries following more than two years of delay in opening up the Myanmar market. They are the UK's Prudential, Japan's Dai-ichi Life, Hong Kong's AIA, US-based Chubb and Canada's Manulife.
The Ministry of Planning and Finance on April 5 published the list of foreign insurers as "preferred applicants" to operate as a life insurance company through a wholly-owned subsidiary. The announcement was originally scheduled for release on March 29.
Foreign investors have expressed frustration with multiple delays in the long-promised liberalisation of Myanmar’s almost entirely closed insurance market. Since 2013, 11 local insurers have been granted licences to operate, while 14 foreign insurers have set up 30 representative offices.
Source: Nikkei Asian Review, Myanmar Times
NEW ZEALAND
New Zealand Superannuation Fund (NZ Super) will seek support from sovereign wealth funds and public pension funds for its initiative to push social media companies to tighten their oversight of content that promotes violence and cruelty, said Matt Whineray, chief executive of the NZ$41.2 billion ($27.9 billion) fund.
"Collective actions tend to be the more successful ones, and if we can get a number of funds together with a lot of assets under management", there's a greater likelihood of getting those companies' attention and hopefully effecting some change, said Whineray.
An announcement Monday (April 8) from NZ Super said the initiative has been backed by 23 institutional investors with a combined AUM of NZ$800 billion.
Source: Pensions & Investments
PHILIPPINES
Pru Life UK, a subsidiary of Prudential, renewed its licence with the Philippines' Insurance Commission to continue operations in the country and provide Filipinos with access to its life insurance solutions.
The Insurance Commission first granted Pru Life UK the licence to operate and sell life insurance products locally in 1996. Since then, Pru Life UK has expanded its reach to over 130 branches in the country with a life agency force of over 20,000 licensed agents.
Source: Asia Insurance Review
SINGAPORE
GIC announced a number of new appointments, to be effective from July 1. Tay Lim-Hock, currently deputy group chief investment officer and president (Europe), was named as the sovereign wealth fund's new chief operating officer. He will relocate to Singapore from London.
Tay will succeed Goh Kok-Huat, who will step down as chief operating officer and take on the role of adviser until June 30 in 2020. Tay will be replaced by Arjun Gupta as president (Europe) and relocate from Singapore to London.
GIC has also appointed Kevin Bong and Prakash Kannan as director for economics and investment strategy and chief economist, respectively. Kannan will retain his current role as head of total portfolio management for economics and investment strategy.
Bong and Kannan will replace Leslie Teo while Teo will become a GIC adviser until June 30 in 2020 after he steps down from his current role as director, economics and investment strategy, and as chief economist.
Source: GIC
SOUTH KOREA
Government Employees Pension Service’s chief investment officer Lee Chang-hoon will leave his role in May. The pension fund started a public recruitment process to find his replacement on April 2 and intends to announce Lee’s replacement in May.
A GEPS spokesman told AsianInvestor that Lee is leaving because his contracted two-year term has expired, without elaborating further.
Source: GEPS (In Korean)
Korean Teachers’ Credit Union (KTCU) is expected to launch a W900 billion ($793.2 million) worth blind fund, the largest investment for the mutual-aid association. A blind fund refers to an investment raised without determining a specific goal or target.
The pension fund intends to allocate W800 billion to private equity funds that invest in large, middle and small-cap equities, while W80 billion will go to venture capital firms.
The KTCU is expected to make the plan official soon. In particular, it will invest in newly established VCs that have not done many businesses with mutual-aid associations to give them opportunity to build ample experiences, which would result in overall advance of the nation’s capital market.
Source: Pulse News
South Korea’s mutual aid associations in 2018 have shied away from stock investments and instead turned to portfolio diversification to take solid yearly gains in times of heightening global uncertainties, data showed on April 1. Examples of this trend are Public Officials Benefit Association, Police Mutual Aid Association and Military Mutual Aid Association.
This comes in contrast to the losses of Korean pension funds’ heavy stock portfolios. The Teachers’ Pension and the National Pension Service, with 37% and 34.8% of stock portfolio logged a 2.45% and a 0.93% loss, respectively.
Source: The Investor/Korea Herald
Korea Post’s savings arm will select two global private equity funds to invest around $200 million in private equity secondary markets, according to an announcement.
It will commit $100 million each to the selected fund houses, which must have a track record of a secondary commingled fund before the 2008 financial crisis. Korea Post will receive proposals for the mandate by April 12 and finalise the selection in June.
Source: Korean Investors
INTERNATIONAL (EXCLUDING ASIA)
Norway’s $1 trillion oil fund announced plans to invest billions of dollars into private wind and solar power projects and to remove emerging market bonds from the benchmark it tracks.
The latter move should provide Norges Bank Investment Management (NBIM) with some insulation from the effects of wildly swinging currencies. It is aimed at reducing “transaction costs in the management of the funds”, said Siv Jensen, Norway’s minister of finance. Emerging market debt accounts for 8.2%, or roughly NKr208bn ($24 billion), of the fund’s NKr2.5 trillion bond portfolio.
Meanwhile, Norway’s government gave the go-ahead on Friday for NBIM to invest in renewable energy projects that are not listed on stock markets. The fund can now invest up to $14 billion in green projects. Plus the fund intends to sell its stakes in more coal companies, after having set a new limit for them of 20 million tonnes of reserves.
Sources: Financial Times; The Guardian
The California State Teachers’ Retirement System (Calstrs) is starting a new phase of its $2.5 billion programme to invest in companies with low-carbon emissions while also monitoring how its external equity managers are incorporating sustainability factors into their investment decisions.
The first phase of the programme saw the $227 billion fund invest $1.3 billion in the stock of low-carbon companies, in July 2017. In the second phase, Calstrs will invest another $1 billion in low-carbon-emitting companies in non-US markets by June 2019. The final $200 million is then expected to be invested in low-carbon companies in emerging markets. The $2.5 billion portfolio – when fully invested – will account for around 2% of Calstrs’ $115 billion equity portfolio.
Another Calstrs initiative detailed in the green report is that it will determine what percentage of its external managers are accounting for various climate change considerations in their investment process.
Source: Chief Investment Officer
