Investors roundup: GIC upbeat on China; PSP inks Australian agri deal
TOP NEWS OF THE WEEK
Regulatory uncertainty caused by years of Chinese government crackdowns on the country’s technology giants has started to clear, potentially easing the way for wary investors, according to Singapore’s sovereign wealth fund.
“So in Chinese tech - big tech - that picture has become clearer,” GIC Pte Chief Investment Officer Jeffrey Jaensubhakij said on a panel at the World Economic Forum in Davos, referring to recent comments by the Chinese Vice Premier. “Part of what Liu He was saying yesterday is that they’ve kind of solved all of that now.”
The comments come at a time when the world’s biggest investors try to rapidly switch gears on investing in one of the world’s biggest economies. In the past five years, China has swung from being attractive for many firms to becoming nearly uninvestable amid heavy government interventions and pandemic restrictions. Now China seeking to jump-start its economy and pledged to engage with the world while welcoming investors.
Australian pension fund UniSuper, however, won’t be rushing back into Chinese equities despite the recent rally driven by foreign investors following the country’s dramatic exit from zero-Covid policies.
John Pearce, chief investment officer of the fund with more than A$115 billion ($81 billion) of assets, said he’s no “China bull” and would rather invest in other countries that will benefit from the reopening, including Australia. Global money managers have turned increasingly bullish on Chinese stocks, while economists have upgraded their growth forecasts for the nation.
“China to us is always going to be an emerging market,” Pearce said in an interview. “Like all these emerging markets, they’re going to go through spates where they’re putting on really sharp, large short-term rallies of like 20, 30%. You see this quite often in Latin American countries or eastern European countries.”
OTHER INVESTMENT NEWS
Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers has closed a record deal in Australia’s expanding macadamia industry, buying most of the assets of Macadamias Australia from the Steinhardt family.
The deal was closed last week and approved by the Foreign Investment Review Board.
PSP has reportedly paid more than $70 million (A$100 million) for over 1000 hectares of planted orchards and vacant land, as well as state-of-the-art macadamia cracking, processing and packaging facilities developed by the Steinhardt family, through its local agribusiness venture Stahmann Webster.
PSP is the biggest offshore investor in Australian agriculture, and this latest acquisition extends the Canadian fund’s investments in Australia’s nut sector to more than $700 billion.
A “prominent” Australian family office is reportedly investing $141 million (A$200 million) in the Regal Private Credit Opportunities Fund, with the possibility of a further investment $70 million (A$100 million).
Regal’s fund was launched in October last year and is focused on senior loans to small and medium-sized public and private companies in Australia and New Zealand, along with asset-backed loans and other credit opportunities.
Regal said the mandate, from the family office, has radically accelerated the growth profile of the strategy and its funds under management.
Source: Financial Standard
Intermodal Terminal Company (ITC) which is fully owned by Australian pension fund Aware Super has announced plans to build and operate a $285 million (A$400 million) terminal to unlock the country’s supply chain.
The planned Somerton Intermodal Terminal (SIT) will be located in Melbourne's north, and should be completed in 2025. SIT will be Australia's largest intermodal terminal once it is operational and will bring significant benefits such as lower carbon emissions and air pollution, reduced traffic congestion, and improved road safety, according to ITC founder and chief executive Mishkel Maharaj.
Source: Financial Standard
JP Morgan Asset Management (JPMAM) has received regulatory approval from the China Securities Regulatory Commission (CSRC) to complete its acquisition of Shanghai-based China International Fund Management (CIFM).
CIFM will operate under the JPMAM brand in China (JPMAM China), reflecting its integration into the firm’s global operating model.
JPMAM’s Asset Management Wholly Foreign-Owned Enterprise (AM WFOE) will be integrated into JPMAM China. CIFM Chief Executive Officer Eddy Wong will become CEO, JP Morgan Asset Management China, reporting to Dan Watkins, Asia Pacific CEO, JP Morgan Asset Management.
JPMAM held a 49% stake in the joint venture CIFM which was established with Shanghai International Trust in 2004.
Source: JP Morgan Asset Management
Canada Pension Plan Investment Board (CPP Investments) has made $205 million investment— as an anchor investor — in Indian real estate company IndoSpace’s new real estate fund.
The investment marks the first close for IndoSpace Logistics Parks IV (ILP IV), the company’s fourth development vehicle, targeting $600 million of total equity commitments. ILP IV will add an additional 25-30 million square feet to the IndoSpace portfolio and will focus on India’s largest logistics real estate markets—Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune.
This is the latest venture between CPP Investments and IndoSpace. The Canadian fund also invested two of the company’s other development funds—IndoSpace Core and ILP III. Following the investment in ILP IV, the partnership will exceed $1 billion in assets.
Source: CPP Investments
AIA is looking to expand its portfolio to logistics and real estate-related projects in markets such as Thailand amid economic uncertainties.
Mark Konyn, the company's Hong Kong-based group chief investment officer, said among alternative assets the firm is seeking are emerging investment opportunities in the logistics segment in Asia-Pacific, especially in Thailand.
"We see the economic structure continuing to shift, with the provision of last-mile product delivery requiring a very intricate and sophisticated logistics programme in order to meet service standards," he told Bangkok Post.
Source: Bangkok Post
Nippon Life Insurance has agreed to invest an additional commitment of $1 billion in Resolution Life -- a leading global life and annuity insurance consolidation business -- following the recently announced strategic partnership between Resolution Life and Blackstone.
Under the partnership, Blackstone has become Resolution Life’s investment manager for certain key areas, including directly originated assets across the private credit, real estate and asset-based-finance markets.
Blackstone will manage an initial target of up to $25 billion of Resolution Life’s existing private assets in the first year of the partnership, which is expected to increase to over $60 billion over the next six years.
Source: Resolution Life
The National Pension Service (NPS), the world's third-largest pension fund, ranked 10th out of the global 42 state-owned investors by rate of return for the first three quarters of last year, according to investment data platform Global SWF's Year 2022 in Review.
Last November, NPS' fund management arm posted a 7.1% loss for the first nine months of 2022. It outperformed some global pension giants during the same period, like the California Public Employees' Retirement System (CalPERS) (15.9% loss), Dutch pension fund ABP (16.6% loss) and Norges Bank Investment Management (18.2% loss).
But the NPS performance was poor compared with Australian state-owned Future Fund (5.1% profit) and Canada-based Ontario Teachers' Pension Plan (1.2% profit), which respectively achieved 5.1% and Japan's Government Pension Investment Fund (GPIF), the world's largest pension fund, had a 3.8% loss.
Source: Global SWF
Separately, NPS is set to see its pool of money depleted by 2055, earlier than expected, because of a shrinking population amid low economic growth, an official estimate showed on January 27.
A government panel commissioned for the estimate, made every five years, said in a report that the NPS would see its fund depleted two years earlier than a 2018 estimate said.
The fund will grow until at least 2040 as the relatively young pension system, launched in 1988, still has more contributions than payments. After that, it will shrink, the panel said.
Yellow Umbrella Mutual Aid Fund, the public pension fund operated by the Korea Federation of Small and Medium Business, has issued a request for proposals for domestic real estate managers.
The pension fund aspires to commit W300 billion ($242.3 million) to two domestic real estate blind-pooled funds.
The submission deadline February 17, and the investment committee plans to make a decision in late April. The W17.7 trillion pension fund has a 28.2 % allocation target to alternatives within its total portfolio. The allocation was most recently at 23.46%
Source: Yellow Umbrella
Temasek led the latest funding round for climate tech firm Living Carbon, which aims to increase the carbon-absorbing ability of trees, the startup's chief executive told Reuters.
The biotech's $21 million Series A round was also backed by the world's biggest automaker Toyota and venture firms Lowercarbon Capital and Felicis Ventures, and takes total funding raised to date to $36 million.
Paris-based quantum computer start-up PASQAL said it raised 100 million euros ($109 million) and aims to deliver major commercial advantages over classical computers by next year using the fresh funds.
Singapore state investment firm Temasek was the lead investor in this funding round.
"The funds will help the company to further develop its quantum computing platform and expand its global footprint," said Temasek in a LinkedIn post on January 25.
GIC has emerged as an investor in a deal run by KSL Capital to move its ski resort company Alterra out of an older fund and into a continuation pool, sources told Buyouts.
The deal is one of the higher-profile GP-led secondaries to emerge from the slowdown in activity in the second half of 2022.
It would give investors in an older fund the option to cash out of their stakes in Alterra, or reinvest in the company through the continuation fund. Morgan Stanley is working as an advisor on the process.
Fubon Life Insurance, the insurance unit of Taiwanese financial conglomerate Fubon Financial, is investing up to 1.2 billion New Taiwan dollars ($39.5 million) in the fourth flagship fund of Taiwan-based venture capital firm AppWorks.
Fubon Financial told the Taiwan Stock Exchange that its insurance unit is taking no more than 20% of the final fund size of AppWorks Fund IV, which will invest in Taiwan and Southeast Asia.
DealStreetAsia reported that the venture capital firm in November was looking to make the first close of the fourth fund at about $200 million. The total corpus that the firm is targeting to raise by mid-2023 is $360 million, according to its top executives.
Source: Deal Street Asia
Thailand’s securities regulator has launched guidelines for asset managers to assess climate-related risk when managing investment portfolios.
The move comes just days after Thailand won top marks in Southeast Asia for achieving the United Nations’ Sustainable Development Goals or SDGs.
The Securities and Exchange Commission, Thailand (SEC) says its new guidelines also aim to help asset managers to address climate-related issues through capital market mechanisms in accordance with the SDGs.
Source: Asia Asset Management
REST OF THE WORLD
Norway's sovereign wealth fund, one of the world's largest investors, on January 31 reported a record loss of NOK1.64 trillion ($164.4 billion) for 2022, bringing to an end a three-year run of soaring profits.
The fund's return on investment in 2022 stood at minus 14.1% for the year, which was 0.88 percentage point better than the return on the fund's benchmark index.
The return on the fund's equities was minus 15.3%, while it was minus 12.1% on fixed-income investments. It earned a positive 0.1% return on unlisted real estate and 5.1% for renewable energy projects.