Insto roundup: Vanguard hands back $21b of China insto assets; GIC to invest $1b in Ant Financial IPO
AUSTRALIA
Underperforming superannuation funds will be blocked from taking on new members if returns are not improved, forced to publicly disclose poor returns on investments and required to prove they are acting in the best interests of Australians.
The government will require funds to take an annual performance test from July 2021, and those failing to produce good returns for members will be publicly listed as an underperforming fund on a new online comparison tool until they do better.
The test initially applies to "MySuper" funds – lower-cost balanced investment options – but will be extended to other super products in 2022. The difference between the worst- and best-performing MySuper products is up to $98,000 less for an average worker, and these tests are estimated to help workers accrue an extra $10.7 billion over 10 years.
Source: Sydney Morning Herald
CHINA
China Investment Corporation (CIC) has teamed up with Italian lender UniCredit and UK-based private equity Investindustrial to form a £600 million ($706 million) fund to invest in European companies that open new businesses in China, according to a CIC announcement.
As a cross-border M&A fund, the fund will seek to invest in Italian and Southern European companies aspiring to open new pathways for growth in China, mainly in sectors including advanced manufacturing, business services, consumer goods and services, healthcare, etc.
CIC in June formed a £400 million cooperation fund with French bank BNP Paribas and Paris-based private equity firm Eurazeo, and in September 2019 established a $1 billion technology fund with the sovereign fund Russian Direct Investment Fund.
Source: China Investment Corporation
Vanguard returned $21 billion in managed institutional assets to government clients in China as part of a global shift to focus on low-cost funds for individual investors, according to Bloomberg, which cited people familiar with the matter. The US fund manager had $6.2 trillion in assets under management as of January.
The returned assets include about $10 billion that Vanguard had managed for each of China’s State Administration of Foreign Exchange and sovereign wealth fund China Investment Corporation. Rivals BlackRock and Amundi are being considered to manage a portion of the funds returned.
Source: Bloomberg
KOREA
National Pension Service (NPS) has extended the term of its chief investment officer, Ahn Hyo-joon, for one more year.
Ahn will continue to lead the investment decisions at the NPS, which has in recent years become one of the region’s largest real estate investors, until October of 2021. The move is seen as an indication that the NPS will continue to expand its cross-border efforts.
Source: Mingtiandi
Korea Post's insurance arm, which had around $106 billion in assets as of December 2019, is seeking three asset managers for a domestic bond mandate of unspecified size.
The managers will be appointed for a one-year term, and foreign bidders are required to have Korea-registered units.
Applicants must have a three-year track record in fixed income or multi-asset investing, and their bond or multi-asset funds should have at least W100 billion ($86 million) of total assets. Applications are open until October 20, and manager selection is scheduled to take place in December.
Source: Asia Asset Management
The Korea Federation of SMEs, or KBiz, is looking for managers for a two-pronged $300 million active global asset allocation mandate.
The first part is a $200 million absolute return multi-asset strategy focusing on stocks, bonds and alternative assets, including real estate investment trusts, infrastructure and private debt, according to Hanwha Asset Management, the advisory manager for KBiz. The targeted return is at least 4.5% per annum.
The second part is a $100 million traditional strategy focusing primarily on investments in stocks and bonds, with a preferred leverage ratio of maximum 400%, according to the statement posted on the website of the Korea Financial Investment Association.
Source: Asia Asset Management
Korea’s so-called big three life insurers – Samsung Life, Hanwha Life and Kyobo Life – are speeding up their drives to find new revenue sources overseas amid saturation in the local insurance market, with a particular focus on Southeast Asia.
Kyobo Life plans to establish a joint venture company in Myanmar with a local partner there. The company will start its life insurance business in the country some time in the latter half of next year.
Yoo Ho-seok, chief financial officer at Samsung Life, said in a second-quarter regulatory filing that the company would aggressively push for acquisitions and equity investment in Southeast Asia.
Hanwha Life is also seeking new profit centres in emerging Asian markets.
Source: Korea Times
INDONESIA
Indonesia is preparing to set up a sovereign wealth fund with initial equity of about $5 billion, which would aim to attract $15 billion in funds for investment, the country’s finance minister said at a news conference.
The government would inject up to 30 trillion rupiah ($2.04 billion) in cash for its equity and add other assets, including stakes in state companies, that would in total reach 75 trillion rupiah ($5 billion), Sri Mulyani Indrawati said. The government would leverage that to attract funds for investment totalling $15 bilion, she said.
The fund – to be named Investment Authority Indonesia – will be a combination of development fund and stabilisation fund, she said.
Source: Reuters
Sovereign wealth fund GIC plans to invest more than $1 billion in Ant Group’s mega initial public offering as early investors look for a bigger slice of the Chinese payments behemoth, according to people familiar with the matter.
GIC and Singaporean state investor Temasek Holdings are both considering participating in both the Hong Kong and Shanghai legs of the listing, which could raise up to $35 billion. In addition, China’s $318 billion National Social Security Fund plans to buy shares at the IPO.
Ant Financial is seeking to raise up to $250 billion, which would give it a market capitalisation twice that of Citigroup.
Source: Bloomberg
GIC and US-based private equity firm TPG Capital recently invested $752 million and $250 million, respectively, into India’s Reliance Retail Ventures, a major retail company owned by Asia’s richest man Mukesh Ambani.
GIC’s investment has given it about a 1.22% equity stake in the retail giant while the US-based private equity company has obtained a 0.41% stake.
Reliance Retail Ventures’ current fundraising spree has garnered around $4.4 billion in funds. Other investors include Mubadala, Silver Lake and General Atlantic.
Source: Newshour
INTERNATIONAL (EXCLUDING ASIA)
Canada Pension Plan Investment Board (CPPIB) is selling its 50% interest in phase one of the Nova Victoria development in central London to Singapore’s Suntec Real Estate Investment Trust, part of ARA Asset Management.
Nova Victoria is a landmark five building mixed-use development adjacent to Victoria station. Phase one comprises two office buildings and a block of residential apartments and saw construction begin in June 2013 and completion in April 2017.
Contracts have exchanged and the transaction is expected to complete in the fourth quarter of 2020. CPPIB’s net proceeds from the transaction are expected to be around C$720 million ($540.7 million). At June 30, the retirement fund stood at C$434.4 billion.
Source: CPPIB
A group of Canadian institutional investors managing around $2.3 trillion in assets has signed a new statement on diversity and inclusion (D&I), an initiative coordinated by the Responsible Investment Association under which they will monitor the D&I practices of Canadian public companies.
The signatories include some of the country’s biggest retirement funds, including Alberta Investment Management Corporation, British Columbia Investment Management Corporation and Caisse de dépôt et placement du Québec.
The investors expect Canadian public companies to aim for the adoption of policies, targets and timelines to improve diversity on boards and in senior management, with the ultimate goal of being aligned with the racial and ethnic demography of Canada.
Source: Responsible Investment Association
The Teacher Retirement System of Texas has committed $100 million to Actis Arroyo PIV, an emerging-markets-focused infrastructure fund managed by Actis Capital.
This was one of four allocations made by the $155.2 billion pension fund in September, with the others being $200 million to Starwood Distressed Opportunity Fund XII Global, an opportunistic real estate fund; $100 million to Crestview Partners IV (Bluebonnet), a small- and middle-market buyout fund; and $20 million to SLP Mistral Co-Invest, a buyout co-investment fund run by Silver Lake.
Source: Pensions & Investments