Weekly Digest: Ex-GIC CIO mulls presidency bid; China unveils private funds rules
TOP NEWS OF THE WEEK
A former chief investment officer at Singapore sovereign wealth fund GIC is reportedly considering a run for the city-state’s presidency.
Ng Kok Song, 75, told news outlets through a spokesperson that the matter was “an issue of great national importance”, and that he was “still deliberating”.
Ng retired from GIC a decade ago after spending 27 years at the fund.
His potential candidacy comes following an announcement by businessman George Goh that he would contest the election.
Tharman Shanmugaratnam, who was until July 7 chairman of the Monetary Authority of Singapore, and who has held a range of senior ministerial positions in Singapore’s government, declared his candidacy in early June.
Sources: Bloomberg, Straits Times, Wake Up Singapore
China’s State Council unveiled the country’s first regulatory framework for private investment funds on July 9, setting out obligations of private investment fund managers and custodians, and requirements for risk management practices.
The regulations have 62 items in seven chapters. It will be effective from September 1.
Private investment funds in China can invest in private equity or publicly traded securities.
The new rules have a chapter specifically for venture capital funds, as policymakers encourage investment into innovative technology start-ups.
Source: China Securities Regulatory Commission
OTHER INVESTMENT NEWS
CHINA
One of China’s biggest state-run investors is adding to the chorus of warnings over debt risks at the nation’s cash-strapped developers and local government financing vehicles.
The National Council for Social Security Fund, which oversees about $417 billion according to the latest available figures, has advised asset managers that handle its money to sell some bonds including those from riskier LGFVs and private developers after a review, people familiar with the matter said, asking not to be identified discussing private information.
Several of them noted that bonds from LGFVs in Tianjin, a debt-saddled northern port city, were singled out.
Source: Bloomberg
INDIA
Canadian pension funds are showing interest in investing in infrastructure funds in India, according to a Reuters report that cites Canada’s deputy prime minister and minister of finance, Chrystia Freeland.
The report, citing an Indian government statement, said Freeland described India’s investment climate as stable.
Freeland met Indian finance minister Nirmala Sitharaman on the sidelines of a gathering of Group of 20 finance ministers and central bank governors in Gandhinagar, Gujarat, and discussed progress on bilateral trade negotiations, Sitharaman's office tweeted.
Sources: Economic Times, Reuters
JAPAN
Dai-ichi Life Insurance has decided to invest approximately ¥7 billion ($50.6 million) in the IFM Net Zero Infrastructure Fund, managed by IFM Investors.
The fund’s main investment targets are the green and brown field of infrastructure sectors, meaning renewable energy generation facilities, efficient electricity grids, electric vehicle charging stations, the low-carbon alternative fuel facilities, and carbondioxide capture and storage facilities in North America, Europe and Asia.
Source: Dai-ichi Life
KOREA
Korea Investment Corporation (KIC) confirmed rumours that the sovereign wealth fund plans to open a new office in India's financial capital of Mumbai later this year to secure a new investment foothold amid a global supply chain reorganisation.
KIC CEO Jin Seoung-ho made the announcement on July 13 and said it will closely monitor developments in China as its economic growth has slowed and there are several risk factors in Chinese markets.
Meanwhile, there are several alternative investment opportunities in India, a market in which many global asset owners are keen to invest.
In the first half of this year, KIC made an 8.25% profit in traditional investment thanks to the bullish stock market.
The earnings rate of stock investment was 14.39% and that of bond investment was 1.87%. For the second half outlook, Jin said KIC believes the global economy will make a soft landing and there is a low possibility of severe recession.
Source: Yonhap News Agency
The National Pension Service (NPS) is being challenged by climate groups demanding the retirement fund discloses details of discussions over limiting investments in coal. The fund had been expected to outline details last year of how it would reduce holdings in companies with ties to coal after pledging in 2021 to adopt investment-restriction strategies.
Three activist groups jointly filed a case at the Seoul Administrative Court accusing the welfare ministry, which oversees the fund, of refusing to release minutes of meetings at which coal divestment policies were discussed, the campaigners said in a statement.
NPS declined to comment on the case.
NPS is required by law to share details or documents related to management committee meetings, typically after a year has elapsed.
Reporting can be withheld for four years if their publication is judged to have the potential to impact the fund’s performance or market stability.
Source: Bloomberg
Korea Post has hired Korea Investment Value Asset Management for a domestic equity mandate for its insurance unit, according to an announcement on July 13.
The selection is pending an onsite due diligence of Value Asset Management on July 19. The mandate focused on social responsibility was published in June.
The investment will be benchmarked against the Korea Composite Stock Price Index (KOSPI). The value of the mandate was not disclosed.
Source: Korea Post
Korea Post has issued two requests for proposals for asset managers for a combined $400 million into overseas infrastructure, focusing on secondary investments in developed countries. The mandates will have a five-year investment period, which may be extended to seven years.
The mandates must be structured as either a closed-end commingled funds or separately managed accounts, allocating at least 70% of assets to North America and Western Europe, and a minimum of 70% in secondary infrastructure. The targeted internal rate of return is a minimum of 7%.
Applications are open until July 21, with the asset managers being hired in September.
Source: Korea Post
MALAYSIA
Venture capital firm Antler has formed a partnership with Malaysian sovereign wealth fund Khazanah Nasional Berhad.
The partnership is the latest addition to Khazanah’s Future Malaysia Programme, an initiative under its Impact Fund, or Dana Impak, mandate that aims to support the local start-up ecosystem of entrepreneurs, start-ups, venture capital and corporate venture programmes through collaborations with domestic and international partners.
Dana Impak is an RM6 billion ($1.3 billion) commitment over five years and is a key pillar of Khazanah’s Advancing Malaysia strategy.
Antler is an early-stage investor globally and has invested in more than 792 companies across 26 cities worldwide, amassing a cumulative portfolio value of $3.7 billion.
Source: Khazanah
Malaysia’s Employees Provident Fund (EPF) says no changes are planned for existing members’ entitlement to make lump sum withdrawals at the ages of 55 and 60.
EPF’s comments come after Prime Minister Anwar Ibrahim said on July 6 the government would leave any decision on a proposed change to mandatory periodic or monthly withdrawals to the EPF. Periodic withdrawals are currently voluntary.
A proposed change to mandatory monthly withdrawals will apply to new EPF members born in or after 2010 and registered with the pension fund| after the implementation date, a statement from the fund said. The proposed revision of the system is still being worked on, it said.
Source: EPF
PHILIPPINES
The Department of Finance is expected to present a proposed bill seeking to reform the pension system for miltary and uniformed personnel (MUP) to Congress by August.
The DoF is current waiting for actuarial studies to be completed.
The MUP pension program covers members of the Armed Forces, Bureau of Jail Management and Penology; Bureau of Fire Protection, Philippine National Police, Philippines Public Safety College, Coast Guard and Bureau of Corrections.
Source: Bworldonline.com
THAILAND
The assets of Thailand’s Social Security Fund (SSF) shrank by more than THB 17.6 billion baht ($507.2 million) in 2022, the first contraction in five years, according to a report by the Bangkok Post that quoted an unnamed finance ministry source.
The source told the paper that SSF’s assets totalled THB2.36 trillion at the end of 2022, compared with THB2.379 trillion at the end of the previous year.
The report cited the source as attributing the contraction to a drop in market capitalisation and reduced contributions from fund members that formed part of the government’s COVID-19 relief measures.
Source: Bangkok Post