Insto roundup: Super funds cut alts amid asset withdrawal; SWFs lose money on banks
AUSTRALIA
Australians experiencing financial hardship will be able to lodge an application for early access to a portion of their superannuation savings.
From Monday (April 20) people who are out of work or can prove to have lost 20% of their income, hours of turnover can withdraw A$10,000 from their super fund before July, and then another A$10,000 between July and October.
Close to 900,000 people had registered an interest in the scheme by Friday (April 17), meaning up to A$9 billion could be withdrawn from superannuation funds in the inital round.
Hostplus is seeking to withdraw A$1.5 billion ($952.1 million) from one of the country's biggest property investment funds, ISPT, ahead of the potential avalanche of requests by out-of-work hospitality and tourism workers to access their retirement savings.
The Australian Tax Office on Monday (April 20) began processing superannuation member applications to access their retirement funds under relaxed hardship rules, with up to A$27 billion expected to be removed from the retirement funds by 1.6 million members nationwide.
Hostplus has aggressively invested in unlisted and alternative assets to take advantage of their so-called illiquidity premium and its mostly young membership. But it didn't anticipate the government allowing members to access up to A$20,000 of their retirement savings early. Plus its younger industry members are at greater risk of losing their jobs in the current economic climate.
Source: Australian Financial Review
Cbus Property will deliver a A$300 million 20-storey CBD office building in Adelaide for the South Australian government, which will house its Department of Planning, Transport and Infrastructure as an anchor tenant. The building will be managed in partnership by the SA Government and Cbus Property.
Cbus Super chief executive David Atkin, who is set to leave the fund in mid-2020, said the office building would support up to 2,000 construction jobs during the Covid-19 recovery phase.
Source: Business News Australia
The Australian federal government reappointed two members of the A$168 billion board of guardians of the Future Fund.
Carolyn Kay and Jane Wilson, who were both appointed for a five-year term in 2015, had their appointments extended by three years and a year respectively.
Source: Financial Standard
CHINA
The People’s Bank of China (PBOC) has bought 1.01% stake in India’s biggest housing mortgage lender, HDFC, on behalf of China's State Administration of Foreign Exchange.
PBOC now holds 17.5 million shares of HDFC. Alongside Invesco Oppenheimer Developing Markets Fund and the Singapore government, the Chinese central bank now also holds a substantial amount of HDFC during the January to March quarter of the financial year.
Source: Finance Magnates
JAPAN
Taiju Life Insurance plans to allocate more funds to various illiquid assets, such as private equities, in the financial year that began on April 1, a senior investment planning official said on April 17.
With the coronavirus pandemic pushing down global bond yields, the insurer is seeking to enhance yields by shifting some funds to illiquid assets from yen bonds and currency-hedged foreign bonds, which make up the core of its current investment portfolio.
Source: Reuters
KAZAKHSTAN
Kazakhstan’s government will invest in start-ups across Southeast Asia to diversify central Asia’s largest economy away from oil and gas, whose prices have been battered by the coronavirus outbreak.
The country’s state wealth fund, Baiterek National Managing Holdings, will be the anchor investor in a vehicle operated by Singapore-based Quest Ventures. The fund has also been backed by Pavilion Capital, which is owned by Singapore state investor Temasek.
Adil Nurgozhin, chairman of Baiterek subsidiary QazTech Ventures, called the deal an “important step” in connecting the regions’ economies.
Source: Financial Times
KOREA
Minister of Health and Welfare Park Neung-hoo, who chairs a fund management committee under the state-run National Pension Service, said on April 17 that the retirement fund could take part in the domestic stock market more actively, if needed, to support market stability.
“The NPS’ active intervention last month has helped stabilise the stock market,” said the health and welfare minister at a meeting in Seoul with members of the committee. “The pension fund operator will do what it can to meet the expectations of the domestic market.”
Although stable fund management and returns are two of the most important priorities for the NPS, market stability is important as well, he added.
Source: The Korea Herald
The South Korean government is expected to push ahead with the plan to move Korea Investment Corporation (KIC) and other public agencies to provincial cities after the ruling party won an unprecedented landslide victory in April 15 general elections.
The Democratic Party took a majority of the 300-seat parliament by winning 180 seats, with ex-National Pension Service’s chief executive Kim Sung-joo elected from a district in Jeonju to which he had led the relocation of NPS's investment management unit's head office in 2017.
During his election campaign, Kim had pledged to move the headquarters of sovereign wealth fund KIC, Korea Venture Investment Corp (KVIC) and Specific Post Office Pension Service Agency to his district in the city of a 655,000 population to make it a global financial centre.
Source: Korean Investors
The state-owned Korea Development Bank will soon pick a preferred bidder for KDB Life Insurance, which it recently put up for sale after acquiring it a decade ago, according to news reports on April 15. Private equity fund JC Partners is widely believed to have been shortlisted.
The private equity firm reportedly plans to buy the 92.73% controlling stake in the insurer for W200 billion ($164 million) and additionally raise W300 billion by issuing new shares.
KDB, in a partnership with Consus Private Equity, took over the life insurer, then named Kumho Life, in March 2010 from conglomerate Kumho Asiana Group for W650 billion.
Source: The Korea Herald
MALAYSIA
The Employees Provident Fund sold 4.94 million shares of Pos Malaysia on April 15, reducing its stake in the firm to 4.41%.
The provident fund has been selling shares in Pos Malaysia shares quite regularly since March 31. The share price of Pos Malaysia stood at RM0.82 sen as of April 20.
Source: The Star
MIDDLE EAST
Gulf-based sovereign wealth funds, including Saudi Arabia’s Public Investment Fund, Abu Dhabi’s Mubadala and the Qatar Investment Authority, are mobilising to buy assets that have been hard hit by the coronavirus pandemic.
Bankers and people close to the funds said they were looking to invest in areas that would bounce back in a global recovery, such as healthcare, technology and logistics.
Source: Financial Times
SINGAPORE
Temasek Holdings has labeled as false speculation that its chief executive – Ho Ching, who is also the wife of Singapore’s prime minister, Lee Hsien Loong – makes S$100 million ($70 million) a year.
The S$313 billion Singapore state investment fund also said Ho was not among the top five highest-paid executives at Temasek. The company said it had issued a response following “chatter based on an Asian talk show commentary”.
Howeve, netizens were not satisfied with Temasek’s statement, with many calling for transparency from the company, asking them to reveal Ho’s salary and that of its top executives.
Source: Bloomberg; The Online Citizen
TAIWAN
Exchange-traded funds (ETFs) are heavily subscribed by insurance companies in Taiwan but the local financial regulator has excluded assets of ETFs from a five-year old plan that gives preferential treatment to domestic fund managers, in a move to encourage them to diversify away from such products.
It’s one of several new amendments to the plan, in which Taiwanese fund managers that fulfil several criteria, including asset size and research capabilities, are given concessions such as the ability to submit multiple fund products for approval at one time. The managers are chosen for one-year periods by the Financial Supervisory Commission.
ETFs accounts for over 44% of total fund assets in Taiwan, according to figures from the Securities Investment Trust and Consulting Association.
Source: Asia Asset Management
INTERNATIONAL
A subsidiary of China Investment Corporation accounted for most of the $67 billion in stock losses by the world’s largest sovereign wealth funds amid the fallout from the coronavirus.
Javier Capape, director of sovereign wealth research at the IE Center for the Governance of Change, analysed data from 15 different funds that made investments of over $1 billion. He said a subsidiary of CIC, which holds stakes in banks such as China Construction Bank, Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China, lost about $40 billion. Financial acquisitions made in the last global financial crisis had also suffered, such as Abu Dhabi Investment Authority's 5.21% stake in Credit Suisse and its 5.87% in Barclays.
Despite this, some sovereign funds are seeking new deals. Saudi Arabia’s Public Investment Fund has accumulated stakes in four European oil companies: Royal Dutch Shell, France’s Total, Norway’s Equinor and Italy’s Eni, as well as an 8.2% stake in cruise operator Carnival.
Source: DealStreetAsia
Norges Bank Investment Management, which manages Norway’s state oil fund, has revealed that its external managers for emerging market strategies had delivered the most excess return among its external active equity managers.
In a review of its 20-year history of investing with external managers, the $1 trillion sovereign wealth fund said EM managers had delivered an annual excess return of 4.2% before fees and 3.5% after fees. That compares to 2.1% before fees and 1.8% after fees for active equity managers overall.
“This review describes the strategy we have pursued when selecting mandate types and offers an insight into our thinking and the lessons we have learned,” said NBIM chief executive Yngve Slyngstad.
Source: Norges Bank Investment Management