Weekly Digest: Mubadala to double down on Asia; Malaysia's EPF gets new CEO
TOP NEWS OF THE WEEK
Abu Dhabi-based sovereign wealth fund Mubadala Investment Corporation is seeking to roughly double its exposure to Asia.
Across Mubadala, “out of our roughly $300 billion in assets under management, only 12% is in Asia today and we want to move that number closer to 25%,” by as soon as 2030, Camilla Macapili Languille, head of the fund’s life sciences and healthcare investments division, said.
While investments in North America and Europe make up a chunk of Mubadala’s portfolio, Mubadala is shifting its attention to emerging and Asia markets where it is currently “underweight,” namely in China, India, Japan and South Korea, according to Macapili Languille.
Source: Bloomberg
The Employees Provident Fund (EPF) appointed Ahmad Zulqarnain Onn as chief executive officer (CEO), effective February 19.
Ahmad is joining the Malaysian pension fund from government-owned asset manager Permodalan Nasional Berhad (PNB), where he was president and group chief executive.
He was previously deputy managing director and chief executive at Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad.
Ahmad succeeds Amir Hamzah Azizan, who was appointed as the Minister of Finance II, after leading EPF since March 1, 2021.
Source: EPF
Dutch pension giant APG has closed its office in Beijing, just four years after it opened. The main reason for the closure was a lack of interest among clients, APG confirmed in a response to questions from IPE.
The opening of its Beijing office in the fall of 2019 marked the start of the €537 billion ($580 billion) asset manager’s local China credits strategy, which was managed in partnership with Chinese asset manager E-Fund Management.
APG recently terminated its separate strategy for Chinese corporate bonds because of its “insufficient scale”, according to a spokesperson.
Source: IPE
OTHER INVESTMENT NEWS
AUSTRALIA
Future Fund reported an investment return of A$15.6 billion, or 8%, in 2023, pushing the fund’s assets under management to a record A$211.9 billion ($139.9 billion) at the end of 2023, the sovereign wealth fund said.
The Future Fund has delivered an average annual return of 8.2% against a target of 6.9% over the past decade.
Total funds managed by the board of guardians rose to A$272.3 billion by end-2023.
Source: Future Fund
Private markets and direct investing remain appealing for AustralianSuper heading into the new year, as it embraces the paradox that an economic slowdown could actually create investment opportunities.
“AustralianSuper has been successfully internalising its investments for many years in a range of asset classes and will continue to do so, particularly globally and in private markets. This means the focus for the investment team is to do more private market investing and more direct investing, with the aim of accessing deals early and at lower cost,” Alistair Barker, the fund’s head of asset allocation, said.
Source: InvestorDaily
CHINA
Chinese authorities are considering a package of measures to stabilise the slumping stock market, including a plan to mobilise about 2 trillion yuan ($282 billion), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilisation fund to buy shares onshore through the Hong Kong Stock Connect, according to people familiar with the matter.
They are seeking to use offshore money to minimise impact on an already weakening yuan. They have also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd., the people said.
Source: Bloomberg
This is a newly added brief.
HONG KONG
The Hong Kong Monetary Authority (HKMA) Exchange Fund recorded an investment return of HK$212.7 billion ($27.2 billion), or 5.2%, in 2023, driven by HK$144 billion gains in bonds, HKMA announced on January 26.
Other equities contributed HK$73.2 billion in gains. Hong Kong equities were the worst performer with HK$15.5 billion losses.
Total assets of the Exchange Fund increased by HK$9.8 billion to HK$4.02 trillion ($514.6 billion) at the end of 2023, up from HK$4.01 trillion a year ago.
Source: Hong Kong Monetary Authority
The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) announced six policy measures to deepen the financial cooperation between Hong Kong and mainland China, including expanding the Greater Bay Area cross-boundary wealth management connect pilot scheme.
Measures include expanding investor eligibility, investment quota and products of the Wealth Connect; adding onshore Chinese government bonds and policy bank bonds as the eligible collaterals for HKMA's renminbi liquidity facility; opening up the onshore repurchase agreement market to all foreign institutional investors that already have access to the China interbank bond market.
Source: Hong Kong Monetary Authority
KOREA
Local pension funds, widely regarded as major players in the Korean stock market, have maintained a selling trend so far this year, offloading stocks.
The continued selling has raised concerns, as it adds to the challenges faced by an already weakened stock market.
Pension funds sold a net W909.5 billion ($680.7 million) in the domestic stock market from January 2 to January 25, according to Korea Exchange data released January 26.
Korea Exchange identified pension funds as the main sellers, which include the National Pension Service (NPS), the Government Employees Pension Service, the Teachers' Pension, and Korea Post.
Source: Korea Times
MALAYSIA
The Employees Provident Fund (EPF) decided to separate its conventional portfolio from its shariah-compliant investments, aiming to allow each portfolio’s returns to be optimised long-term.
The portfolios will be managed with their own strategic asset allocation from January 1, 2024.
The shariah-compliant investment scheme was introduced in January 2017 as an option for members who wish to have their EPF savings managed and invested in accordance with shariah principles.
EPF, which manages retirement savings for private sector employees and self-employed, had investment assets amounted to RM1,092.32 billion ($230.73 billion) as of September 30, 2023, split between 61% conventional asset and 39% shariah-compliant assets.
Source: EPF
PHILIPPINES
The Department of National Defense is conducting an inventory of its properties nationwide as it plans to sell some of them to plug the projected shortfall the Philippine government would encounter from funding the pension of the Armed Forces of the Philippines (AFP) in 30 years.
Defence secretary Gilberto Teodoro, Jr. estimates that 220 AFP real estate assets, if sold in the future, will likely be worth more than P10 trillion ($117.3 billion).
Under the proposed pension system for Military and Uniformed personnel (MUP) reform bill, a separate trust fund administrator will be named, which will most likely be the Government Service Insurance System (GSIS).
Source: Business Mirror
SINGAPORE
Temasek-backed InnoVen Capital, a venture debt firm, has launched its second China fund with a target fund size of $250 million, the firm said.
The InnoVen China Fund II has completed its initial close of about $130 million, and will be a USD-RMB dual currency fund.
This follows its first China fund, launched in 2021 with a fund size of less than $100 million, which achieved its first equity exit in 2023.
The anchor investor of InnoVen’s China Fund II is InnoVen Capital, which is a joint venture between Seviora, a wholly owned subsidiary of Temasek Holdings, and United Overseas Bank.
Source: Business Times
The above briefs are curated from press releases and third-party media sources.