Insto roundup: SFERS invests in Asia alts; AMP’s new CEO

AUSTRALIA

Superannuation fund provider and financial services firm AMP has appointed Francesco De Ferrari as chief executive, replacing interim CEO Mike Wilkins. De Ferrari will work together with Wilkins to ensure a smooth transition until January 2019, when Wilkins will return to his position as independent non-executive director on the AMP board.

The appointment follows a difficult year for the firm, with the Royal Commission’s findings revealing a history of charging customers fees for no service, resulting in the departures of chief executive Craig Meller, chairman Catherine Brenner, general counsel Brian Salter, and three board directors. De Ferrari was most recently head of Asia-Pacific at Credit Suisse, and he will also be taking on the role of executive director in January 2019.

Source: AMP

Vision Super announced on November 30 that it would be selling off investments in tobacco, thermal coal, and tar sands producers, citing its ESG decision-making framework. The thermal coal and tar sands producers exclusion was driven by concerns over climate change, while harm to users and the people around them was the main factor behind the tobacco exclusion. Vision Super already has an existing exclusion on investments around controversial weapons. It is currently working on a strategy on how to sell off the excluded stocks from its portfolio.

Source: Vision Super

The founding chief executive of Australia's Future Fund, Paul Costello, passed away in early November due to complications from lung, brain and liver cancer. Costello led the Future Fund from 2006 to 2011, growing its assets under management (AUM) from around $13 billion to $55 billion in that time frame. He was also founding chief executive of the New Zealand Superannuation Fund, leading it from 2003 to 2006.

Source: CIO, New Zealand Herald, Future Fund

CHINA

The National Council of Social Security Fund (NCSSF) manages total provincial pension assets of Rmb315.52 billion ($45.8 billion), according to latest data. Nearly 30% is directly managed by the NCSSF, while the remainder (70%) is managed by external managers.

Data also showed that the NCSSF's Investment return for 2017 came in at 5.23%, while its realised return was 4.55% for the same period. Provincial pension assets can only be invested in domestic assets.

Source: NCSSF

Axa is set to become the first foreign insurer to fully own a Chinese unit, according to a media statement. The French group said it had entered into an agreement with the shareholders of Axa Tianping Property and Casualty Insurance to acquire the remaining 50% stake of the company.

Total consideration for the acquisition of the 50% stake will amount to Rmb4.6 billion (around $668 million), representing an implied 2.4 times of the book value of the company at the end of the 2017 financial year. About Rmb1.5 billion will be financed through a capital reduction of Axa Tianping via a share buyback from existing shareholders. Completion of the transaction is subject to regulatory approval.

Source: Axa

JAPAN

More companies are putting money into their corporate pension schemes, to better prepare for potential stock market crashes or unexpected events that affect portfolio sizes and returns. As of November 1, 104 groups and companies had taken advantage of a framework introduced in 2017 by the Ministry of Health, Labor and Welfare, to put extra cash into defined benefit pension programmes as a form of reserve.

Companies are also increasing their spending on pension contributions because they count as a loss, which lightens tax liabilities. Corporate cash reserves in Japan had grown more than 30% in five years to reach ¥221 trillion ($1.95 trillion) at the end of the 2017 fiscal year.

Source: Nikkei Asian Review

KOREA

Life insurers in South Korea had a combined operating loss of W17 trillion ($$15.17 billion) in their life insurance business in the first nine months of the year. Despite this, the firms posted a net profit during the period, due to investment gains that more than offset losses.

Data from the Financial Supervisory Service on November 29 revealed that Korea’s 24 life insurers enjoyed a combined net profit increase of W229.5 billion to W4.04 trillion from January to September, a 6% year-on-year increase. Investment returns of all life insurers were W18.5 trillion, with operating profit in the investment businesses of the insurers having increase by W1.43 trillion, or 8.4%. This included a W1.1 trillion in gains from Samsung Life Insurance for its sale in shares in Samsung Electronics.  

Source:  Business Korea

Hyundai Marine & Fire Insurance announced it will acquire 25% of Vietnamese bank VietinBank Insurance. VBI is set to issue 16.7 million shares to HMFI, raising its charter capital to VND667 billion ($28.5 million). The deal is set to be completed in the first half of 2019, pending Ministry of Finance approval.

HMFI was chosen from three bidders for the strategic stake, which will not be for a lower value than the closing book value of BVI on December 31, 2017. Its interest marks the latest in rising foreign company investments into Vietnam’s insurance sector. The market has targeted revenue of VND129.24 trillion, up 22.38% versus 2017. If it reaches this target, it would be the fifth consecutive year the insurance industry has posted annual growth of over 20%.

Source: Viet Nam News

SINGAPORE

Temasek Holdings, is keen to follow the lead of AustralianSuper and co-invest alongside Australia's largest private equity manager, BGH Capital, when opportunities arise, a media report said.

Temasek is believed to be among the large limited partners in BGH's inaugural $2.5 billion private equity fund targeting Australia and New Zealand. 

Temasek's investment exposure to Australia and New Zealand has remained static for several years at about $16 billion. The share of the total portfolio invested in Australia and New Zealand has slipped from 9% to 7% over the past three years as Temasek has invested more money in Europe and the US.

Source: The Australian Review

GIC has withdrawn the sale of a half-stake in a AUD1.8 blllion ($1.3 billion) Australian office tower, blaming “increasing uncertainty” in the property market, according to a media report.

The Singapore sovereign wealth fund has reportedly appointed agencies to market the Chifley Tower, one of Sydney’s most identifiable landmarks.

A GIC spokesperson said that GIC will not be proceeding with the sale of Chifley Tower and Plaza, according to the report.

“Given increasing uncertainty in the macro environment and the general real estate market, the bids received did not reflect the asset’s intrinsic value as a premium office building in the heart of Sydney’s CBD.”

Source: IPE.com

Edizione, the holding company of Italy's Benetton family, has sold 20% of an investment vehicle through which it holds 29.9% of Spanish tower group Cellnex, to a unit of GIC. The deal follows the acquisition of another 20% stake in the investment vehicle by Abu Dhabi Investment Authority (Adia) last week.

Both GIC and Adia made the acquisitions at the same economic terms under which Edizione acquired the Cellnex stake from motorway operator Abertis in July. Abertis sold 29.9 per cent of Cellnex to Edizione for 1.5 billion euros ($1.7 billion).

Source: Business Times

INTERNATIONAL (EX-ASIA)

Ocean Towers, Shanghai

QuadReal Property Group, the real estate arm of Canadian pension fund manager British Columbia Investment Management Corporation, is part of a consortium that has acquired Ocean Towers, a grade A office building in Shanghai.

The property is next to Nanjing East Road, Shanghai’s most popular pedestrian street and traditional commercial centre, said Gaw Capital, another member of the consortium, in a statement on November 29.

Ocean Towers has 50,219 square metres (540,552 square feet) of space, added Gaw, without revealing the amount paid for the acquisition.

Source: Gaw Capital

San Francisco Employees’ Retirement System (SFERS) last week unveiled $250 million of recent commitments it has made to Asian alternative investments, as part of some $3 billion that the $25.3 billion pension fund has put into alternatives this year.

The biggest commitment approved at the plan’s meeting on October 10 was $150 million to a separate account managed by Hong Kong-based private equity fund of funds Asia Alternatives.

SFERS also revealed it had committed, at its May 23 meeting, $50 million to Arch Capital Asian Partners IV, run by Arch Capital Management. It has also invested $50 million in Gateway Real Estate Fund IV, run by Hong Kong-based Gaw Capital in Hong Kong.

Source: Chief Investment Officer

Allianz’s investment in the grade A office tower in the Raffles Place financial district marks its first office investment in the city-state. Singapore-based Keppel Reit, which owns 99.9% of the building, expects to close the agreement this month.

Source: Mingtiandi