Weekly Digest: Aware Super, KIC pledge to invest billions in UK
TOP NEWS OF THE WEEK
Australian superannuation fund Aware Super announced a plan to invest an additional A$10 billion ($6.6 billion ) in UK and European investments, managed from its newly established London office.
The A$160 billion super fund, which currently has A$17 billion invested in the region, intends to direct the fresh funds into sectors such as real estate, infrastructure, private equity, energy transition, affordable housing, life sciences, technology, and digital infrastructure.
Sovereign wealth fund Korea Investment Corporation (KIC), banks and other private sector companies plan to pour £21 billion ($26.5 billion) in renewables, infrastructure and financial services in the United Kingdom.
The British government announced the investment plan on November 20, the first day of Korean president Yoon Suk Yeol’s four-day state visit to the UK. KIC plans to invest £9.7 billion in the UK by 2033, focusing on renewable energy, fintech and life sciences, according to the statement.
State-owned Korea Development Bank (KDB) will deploy £3 billion through their operations in the UK over the next five years. The bank’s financial businesses there will include syndicated loans, project finance, fixed-income investments, trade finance, derivatives and venture capital.
Source: Korea Economic Daily
AustralianSuper chief investment officer Mark Delaney said that the current media and market narrative around China’s supposed structural decline is “too pessimistic”, emphasising that the country’s changed economic model does not imply that it will become a portfolio “write-off”.
In a virtual meeting attended by some 4,600 fund members on Tuesday, Delaney outlined his market outlook for China. He said while the country may have “run out of runway” for an infrastructure, housing, and export-centric model, there’s still room for growth in other areas.
“The labour force is contracting, and the population has peaked and declined, but they still have the potential to increase urbanisation,” he said. “Currently, urbanisation in China is only in the mid-60%, and that could well go to 80%."
Source: Investment Magazine
OTHER INVESTMENT NEWS
AUSTRALIA
IFM Investors, an Australian institutional investment manager owned by 17 Australian superannuation funds, has signed a memorandum of understanding (MoU) with the UK government, intending to invest £10 billion ($12.6 billion) in the country by 2027.
This MoU, backed by IFM's key shareholders, aims to spur the company's investments in large-scale infrastructure and energy transition projects in the UK.
The agreement reflects the growing interest of Australian super funds in the UK market, given the projected growth of Australia's pension system.
The MoU also seeks to foster collaboration between IFM and the UK government, facilitating a better understanding of policy priorities and the development of key sectors.
IFM has been expanding its presence in the UK since opening its London office in 2006, with investments in infrastructure, utilities, and renewable energy businesses.
Souce: IFM Investors; Gov.UK
AustralianSuper has rejected the revised acquisition offer by Brookfield and EIG for ASX-listed Origin Energy, labelling it significantly undervalued.
The new proposal, under the existing scheme of arrangement, allows institutional investors to reinvest in Origin's Energy Markets post-acquisition while maintaining the earlier proposed offer of approximately A$9.43 ($6.23) per share.
If not approved, Brookfield outlined an alternative transaction to acquire Origin's Energy Markets for around $8.11 billion, followed by EIG's off-market takeover bid. If executed, shareholders would receive approximately $5.99 per share, a deal AustralianSuper has dismissed as inadequate.
The fund stressed the true worth of Origin lies in its strategic energy transition platforms and future value, which would be better served in the hands of its members and shareholders, not a private equity consortium.
Source: Reuters; AustralianSuper
CHINA
The board overseeing Missouri’s state employee pension plan voted down a proposal by state treasurer Vivek Malek to sell off any investments in Chinese stocks and other securities.
On a voice vote, the 11-member board of the Missouri State Employees Retirement System rejected Malek’s call to punish the Asian economic powerhouse for COVID-19, spy balloons and the fentanyl crisis by pulling its pension investments in the Asian economic powerhouse.
China has become a bad investment in recent years as its economy suffers from deflation, low population growth and an overbuilt housing market, Malek said.
He also said China’s threatening posture towards Taiwan, and friendship with Russia, make investments there a bad choice.
Source: Missouri Independent
HONG KONG
AIA Group published its first climate transition plan on November 24, with reduction targets validated by the Science Based Targets initiative (SBTi), a global body enabling businesses to set emissions reduction targets in line with the latest climate science.
This is a significant step forward in AIA’s sustainability journey and follows the commitment already made in 2021 to achieve net-zero emissions by 2050, the firm announced.
For Scope 1 and 2 direct operations, AIA has set an absolute emissions reduction target aligned to a 1.5°C pathway.
AIA’s Scope 3 Category 15 (Investments) emissions account for over 95% of its in-scope SBTi emissions.
These cover assets in AIA’s general account portfolio that are mandatorily in-scope under the SBTi’s financial sector science-based targets guidance. AIA has used two target-setting approaches for its in-scope investment portfolio to set near-term targets.
Source: AIA Group
JAPAN
Japan Post Bank is adding more real estate to its portfolio this year as the company continues to diversify its ¥226.3 trillion ($1.5 trillion) in assets beyond its traditional reliance on government bonds.
According to a statement, the bank’s investment portfolio includes $27 billion in real estate – up 17.6% from the same period a year ago and four times its 2020 holdings. The company began investing in real estate in 2016, and real estate comprised 35.7% of Japan Post Bank’s portfolio as of September 30, in line with the institution’s past investment allocations which have ranged from around 35% to 40% since 2021.
Japan Post said it sees an opportunity post-COVID-19 to capitalise on a recovery in prices of property assets as the firm has deployed at least $6.7 billion in capital into real estate investments since the start of 2022.
Source: Japan Post
MALAYSIA
Khazanah Nasional is mulling the acquisition of a stake in Modalku Ventures, the company behind small- and medium-sized enterprise digital financing platform Funding Societies Malaysia, according to sources.
“It is currently at the due diligence stage,” a source told The Edge, adding that the potential investment would fall under Khazanah’s Dana Impak initiative.
Source: The Edge Malaysia
NORTH KOREA
A North Korean reinsurance firm is weighing whether to enter the Russian market following the exodus of Western companies over the war in Ukraine, with a group of potential partners calling the move “promising".
The DPRK reinsurer Future Re Company approached the All-Russia Insurance Association with a presentation outlining plans to expand its business and enter the Russian market in late July, according to the association, shortly before Moscow and Pyongyang ramped up talks on military cooperation.
The umbrella association of several Russian insurance companies told NK News last week that Future Re Company primarily seeks to provide “reinsurance capacity” in the Russian market.
Source: NK News
SINGAPORE
GIC anchored a new sustainable real estate fund, which will focus on retrofit and redevelopment.
Italian real estate investment manager COIMA SGR announced a first close for its Opportunity Fund III, with an initial €200 million ($218 million) committed by an Asian sovereign wealth fund, understood to be GIC, as anchor investor.
The new vehicle will focus on decarbonising office and residential real estate across Source:
Source: Sustain RE
THE PHILIPPINES
The Government Service Insurance System (GSIS) partnered with the Japan International Cooperation Agency (JICA) to enhance the safeguarding of public properties and assets from disasters.
In a statement, Wick Veloso, GSIS president and general manager, said the pension fund has finalized a three-year partnership with JICA aimed at bolstering the protection of government insurable interests across the country.
Under the Property Insurance Law, GSIS is mandated to insure all government assets and properties with insurable interests. This includes coverage for fire, engineering, marine hull and cargo, aviation, bonds, motor car, and personal insurance.
Source: GSIS
The above briefs are curated from press releases and third-party media sources.