Weekly Digest: CIC sells UK property at loss; OTPP takes majority stake in family farm
TOP NEWS OF THE WEEK
Sovereign wealth fund China Investment Corporation (CIC) has sold Winchester House in the City of London – its first direct investment in the UK real estate market – at a loss.
The building is the London headquarters of Deutsche Bank, but the German bank plans to exit the building next year.
Winchester House was sold for £247 million ($316 million) and the buyers are Malaysia’s Gamuda and UK investment manager Castleforge Partners.
With the London office market in a depressed state, the sovereign fund has seen the value of its investment decline 19% in US dollar terms since the acquisition in 2012.
CIC’s investment activities in Europe and North America have significantly reduced in recent years amid Western wariness over Beijing’s motivations.
The last investment by CIC in the UK was in 2016 in a stake in Quadgas Topco, which operates Cadent, the UK’s biggest gas distributor.
Source: Global SWF
Ontario Teachers’ Pension Plan has acquired a majority stake in Australia-based potato and onion supplier Mitolo Family Farms.
The transaction, which does not include Mitolo Wines, is expected to be finalised by 30 June. Financial terms were not disclosed.
The business will continue to operate under the Mitolo Family Farms brand. The Mitolo family is retaining a “significant ownership stake” in the business.
Source: OTPP
OTHER INVESTMENT NEWS
CHINA
Two of Australia's largest pension funds pulled money out of Chinese stocks and boosted positions in the country's fossil fuel sector in the final six months of 2022, according to filings published on March 30.
The value of China and Hong Kong listed equities at AustralianSuper and Aware Super, which collectively manage about A$400 billion ($267.24 billion), fell by about a quarter respectively, according to mandatory portfolio disclosures published on fund websites and analysed by Reuters.
Both funds collectively increased their shareholdings in Woodside Energy Group, Australia's largest independent natural gas producer, by roughly 14 million shares.
Source: Reuters
Allianz Global Investors (AllianzGI) is the latest foreign asset manager to seek Beijing's approval to expand in the world's second-largest economy.
AllianzGI filed its application on March 24 to enter China's $3.95 trillion fund management market, according to a filing with the China Securities Regulatory Commission.
The application "further demonstrates the firm's commitment in China and its dedication to develop the onshore fund management business in this important market", a spokesperson for AllianzGI said in a statement.
Source: Reuters
INDIA
The central government has formed a committee led by finance secretary TV Somanathan to explore how to address concerns raised by government employees over the National Pension System (NPS).
The committee aims to find a middle ground between the fiscally imprudent old pension system (OPS) and the reforms-oriented NPS.
The committee will develop a strategy that meets the requirements of government employees while ensuring financial responsibility to safeguard the interests of the general public.
Source: Current Affairs
Temasek and venture capital fund Steadview Capital have agreed to lead a $90 million investment in smart applicance maker Atomberg Technologies Ltd, people familiar with the deal said.
The investors have agreed to a post-money valuation of $425 million-$450 million, the sources said. The smart appliances maker counts A91 Partners, Parampara Capital and Jungle Ventures among its backers.
Source: Mint
Life Insurance Corporation, GIC Re and New India Assurance continue to be identified as domestic systemically important insurers (D-SIIs), India’s insurance regulator said.
D-SIIs are subject to tighter regulatory supervision, the Insurance Regulatory and Development Authority of India said in a statement.
D-SIIs are perceived as insurers that are ‘too big or too important to fail.”
Source: Business Line
INDONESIA
Hanwha Life Insurance Indonesia said it completed acquisition of a 62.6% stake in Lippo General Insurance, a financial subsidiary of Lippo Group, the sixth largest in the Indonesian business world, along with Hanwha General Insurance.
Hanwha Life Insurance Indonesia acquired a 47.7% stake while Hanwha Insurance took 14.9%.
Hanwha Life Insurance’s Indonesian subsidiary is expected to drive the growth of the existing life insurance business and build a product portfolio covering life and non-life insurance policies.
Source: BusinessKorea
JAPAN
Dai-ichi Life Holdings, one of Japan’s largest institutional investors, is shifting more money to domestic bonds from US treasuries and other foreign securities, after aggressive interest rate increases by the Federal Reserve made it costly to hedge against currency risks.
The nation’s largest listed life insurer is increasing investments in super-long Japanese government bonds like 30-year and 40-year notes to match the duration of its liabilities, which are made up of insurance policies spanning decades, according to Tetsuya Kikuta, the firm’s current chief financial officer who’s set to take on his new role on April 1.
Dai-ichi’s core unit manages a portfolio worth about $260 billion.
Source: Bloomberg
Meiji Yasuda Life Insurance announced on March 29 that it will acquire three group insurance subsidiaries of US insurer Elevance Health.
Meiji Yasuda will make the acquisition through the US unit StanCorp Financial Group, which primarily handles group health insurance.
It aims to complete the transaction in the spring of 2024, pending approval from American and Japanese regulators.
The purchase price is estimated to around ¥100 billion ($753 million).
Source: Meiji Yasuda
KOREA
The National Pension Service (NPS) plans to create a committee to improve the governance structures of its portfolio companies.
The plan is fuelling concerns about excessive government intervention in business.
NPS will decide on the plann after considering public opinions and winning approval from its boardroom and the health minister.
Source: The Korea Economic Daily
Almost W4 trillion ($3.1 billion) in funds has flowed into individual retirement pension (IRP) accounts in 2022 in South Korea despite a sluggish stock market as investors sought to benefit from an extended tax credit limit.
The outstanding balance in IRP accounts at securities firms rose to W15.9 trillion in the fourth quarter last year, up W3.7 trillion from the same period a year ago, according to data from the Financial Supervisory Service.
The balance increases to W57.6 trillion from W46.5 trillion during the same period when adding accounts with insurers and banks.
Individual investors can open IRP accounts with 14 Korean securities firms.
Source: Maeil Business News Korea
PHILIPPINES
Philippine Finance Secretary Benjamin Diokno warned of a “fiscal collapse” if the government does not overhaul its military pension system which he said is putting a strain on the national budget.
The government is planning to require active and incoming soldiers to contribute to their pension instead of the state fully funding it.
“We have to address the issue. It’s not sustainable. If this goes on, there will be a fiscal collapse,” Diokno said in a televised briefing.
Source: Bloomberg
Changes have been made in the senate bill on the Maharlika Investment Fund Act of 2023 to address various issues raised by senators and other stakeholders, the sponsor of the measure said.
One of the major changes is allowing the Maharlika Investment Corporation to issue bonds as well as provisions detailing the authorised and subscribed capital stocks to be created.
There will also be limitations in relation to investments in real estate, which shall be limited to major capital projects, as endorsed by the National Economic and Development Authority Board to ensure that these are in line with the socio-economic development programs of the government.
Source: Philippines News Agency
SINGAPORE
GIC and Bain Capital have signed an agreement to enter into a joint ownership of WHI Holdings, whose core operating company, Works Human Intelligence, is Japan’s top HR software provider.
The software is used by about 1,200 corporate clients.
GIC and Bain will be co-control shareholders. The transaction is the largest private equity acquisition of a software company in Japan, according to Dealogic.
Source: GIC
MAS will continue to partner private credit managers with strong track record that are keen to anchor their regional headquarters in Singapore, through its private market programme, according to Lim Cheng Khai, executive diretor at the financial markets development department at the Monetary Authority of Singapore.
The city has close to 1,200 asset managers in Singapore, including 425 private equity and venture capital managers, Lim said in a speect at a private credit investors' forum on March 29.
Source: MAS