MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
The amount represents the balance from the $1 billion overseas investment mandate it earmarked and planned to award last year under a global investment programme, marking the GSISÆs first foray into international capital markets. ING Investment Management and Credit Agricole Asset Management (Singapore) received the first batch of overseas investment mandates from the GSIS in November 2007, but they were given only $300 million each.
So far, 30 international fund managers have submitted proposals to manage all or part of the latest $400 million mandate, which will be awarded before the end of 2008, says Omelita Tiangco, executive vice-president of the GSISÆs finance sector.
The GSIS decided to ask for new proposals instead of relying on the ones submitted last year due to the change in the investment climate over the past 12 months that has had a significant impact on strategies, Tiangco says.
GSISÆs basic requirements for fund managers is a minimum annual return on investment of 8% û net of fees û and a ceiling of 7% on annual portfolio volatility, which were also what was required during last yearÆs search. The fund managersÆ track record on an absolute return basis is also a key consideration.
The GSIS hasnÆt set any parameters for asset or geographic allocation, but is aiming for a geographically diversified overall portfolio.
The $1 billion that the GSIS has allotted for its global investment programme makes up around 12% of GSISÆs total loans and investment portfolio. GSIS president and general manager Winston Garcia has said that amount is just a starting point, and the figure will likely increase over time. Eventually, the GSIS plans to outsource the management of its funds, Garcia says.
The GSIS will have a tough time generating returns for its members if it continues to stick with Philippine shares because of limited choices and relatively low volume. Low interest rates and the absence of a strong secondary fixed-income market in the Philippines are also constraints.
ING and Credit Agricole beat seven other global fund managers for the mandates that they received last year. ING proposed an asset allocation that includes a mixture of global high dividend, global property securities, global fixed income and alternative investments. Credit Agricole proposed an asset allocation that includes global bonds, Asian equities, global equities fund and cash equivalents.
Fund managers that made it to GSISÆs shortlist during last yearÆs search included BNP Paribas, Credit Suisse Asset Management, Deutsche Asset Management, Northern Trust Global Investment, Pacific Investment Management Company, Goldman Sachs, and Societe Generale.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.