Weekly investor roundup: GIC to buy Japanese hotel and leisure property portfolio for $1.3 billion; Korea's KIC invests $1.9 million in Coinbase
TOP NEWS OF THE WEEK:
GIC is set to buy a portfolio of 15 hotels and 16 leisure properties from Japan’s Seibu Holdings for $1.3 billion.
Seibu and the Singapore sovereign wealth fund are scheduled to enter into a formal sale and purchase agreement in May which will finalise the list of assets and other terms of the transaction.
The assets are held under Seibu’s unit Prince Hotels portfolio and include the Prince Park Tower Tokyo, the Sapporo Prince Hotel and The Grand Prince Hotel Hiroshima. The assets make up around 40% of the 76 properties of Seibu's portfolio.
Source: Seibu Holdings
Korea Investment Corporation (KIC) has invested in US cryptocurrency exchange platform Coinbase Global Inc. It acquired 8,700 shares of the crypto platform during the fourth quarter of 2021, according to a US Securities and Exchange Commission (SEC) filing on Feb 9.
The shares KIC bought are worth $1.9 million. It marks KIC’s first investment in a crypto platform.
The investment was made after Coinbase was included in the MSCI All Country World Index last November. “It was not a direct investment from KIC. The acquisition was made via one of our passive funds tracking MSCI ACWI,” a KIC official said. “We haven’t changed our stance that crypto-related assets are not proper for us,” the official added.
Source: Korea Economic Daily
BlackRock CCB Wealth Management has received approval from China Banking and Insurance Regulatory Commission (CBIRC) to launch pension wealth management products in Guangzhou and Chengdu.
Total funds raised from the two cities under a one-year pilot programme is limited to less than 10 billion yuan ($1.57 billion). Adjustments can be made after evaluation during the implementation process, the regulator announced on February 11.
BlackRock CCB WM is a joint venture among BlackRock (50.1%), China Construction Bank (CCB) Wealth Management (40%) and Fullerton Management (9.9%), a subsidiary of Temasek. It gained its license in China in May 2021.
Source: China Banking and Insurance Regulatory Commission
Singapore’s Temasek Holdings has downsized its shareholdings in Alibaba Group Holding, while adding new positions in Chinese e-commerce competitors Pinduoduo and JD.com as well as US-based stock trading platform Robinhood Markets.
The state investment firm has reduced its holdings in Alibaba’s American depositary shares (ADS) by $361.6 million to $1.08 billion in the last quarter of 2021, according to its latest filing, even as the giant tech company’s share value shrank by $114 billion that quarter over regulatory crackdown concerns in China.
Temasek has upped its stake in Pinduoduo by $121 million and initiated a new position in JD.com worth $12.2 million, according to the filing made with the Securities and Exchange Commission. Temasek also bought a small stake in Robinhood and exited from Uber Technologies and the cryptocurrency exchange platform Coinbase Global.
Meanwhile, GIC Singapore has said China remains a key part of its growth despite headwinds from inflation, geopolitics and regulatory crackdowns.
“Our expectation going forward is that the challenges are big and varied and there aren’t a lot of historical precedents,” said CEO Lim Chow Kiat in a recent interview.
“We believe they have enough central bank balance sheet, and within their system they have enough levers to make sure that things do not spiral out of control,” he said in reference to China, adding, “They have the will to continue with reforms and opening up and that will provide future growth.”
Former Goldman Sachs banker Roger Ng is set to stand trial in the US over allegations of bribery and money laundering for the embattled Malaysian state fund 1MDB.
Ng's former boss and co-conspirator Timothy Leissner is expected to testify as a government witness after pleading guilty to conspiracy to launder money and corruption. Ng has pleaded not guilty and his lawyers are expected to argue that he had no role to play in the scheme.
Source: Reuters
MORE INVESTMENT NEWS:
AUSTRALIA
The Australian Prudential Regulation Authority executive board member Margaret Cole told the Australian Financial Review that she wants the agency to have the power to force superannuation funds to merge.
Cole said there were no “active discussions” about implementing this but said that it was at the “top of my list”.
Underperforming super funds have been urged to merge in recent years, driving a rapidly consolidating industry.
Source: Australian Financial Review
AustralianSuper is on the hunt for its first Japanese and Indian stock managers as it plans to increase externally managed assets from A$50 billion to A$80 billion.
The A$260 billion super fund is also seeking to mandate more China A-shares managers and add a range of sector-specific, specialised and bespoke mandates.
The fund currently has 12 external managers for its international equity portfolio managing A$47.8 billion while its internal international equities team manages A$31.1 billion.
Source: Bloomberg, Investment Innovation Institute
Dutch pension fund APG and Ivanhoé Cambridge announced their investment into Australia’s Taronga Ventures’ RealTech Ventures I fund (RTVI) on February 10.
APG’s currently manages $719 billion in assets, and this is its first investment into the built environment technology in the Asia Pacific region, although the amount was not disclosed.
Launched in April 2021, RTVI has drawn a number of institutional investors, including Japan’s Nomura Real Estate Development and US property manager CBRE. Its targeted fundraising is between $75 million and $100 million.
RTVI invests into global emerging technology companies that have relevance for the Asia Pacific region, covering the entire real estate lifecycle focusing on sustainable and clean technology companies.
Source: APG
CHINA
The total assets of Chinese insurers amounted to 24.9 trillion yuan ($3.9 trillion) at the end of December, up 11.5%, or 2.6 trillion yuan, from the beginning of 2021, according to China Banking and Insurance Regulatory Commission’s data on February 11.
Specifically, the total assets of property insurance companies, life insurance companies and reinsurance companies went up 6%, 12.4% and 22.2%, respectively. Total assets of life insurers have reached 21.4 trillion yuan. Total assets of insurance asset management company stood at 103 billion yuan, up 35.4% compared to the start of 2021.
In 2021, insurers' premium income increased 4.1% year on year to 4.5 trillion yuan. The comprehensive solvency adequacy ratio of insurers, a key metric to measure their ability to meet debt and other obligations, stood at 240% at the end of the third quarter of 2021. The average core solvency ratio was 227.3%, data showed.
Source: China Banking and Insurance Regulatory Commission
Cai Esheng, a former senior government official at China's banking regulatory commission, was arrested on suspicion of crimes including taking bribes and abusing his power, according to a statement published by China's Supreme People's Procuratorate on Feb 10.
Cai was arrested by the Supreme People's Procuratorate for the reported crimes, and has been transferred to the procuratorial organ for further investigation and prosecution, the statement said. The case is currently being processed.
Cai was the vice chairman of the China Banking Regulatory Commission (CBRC) from 2005 to 2013. The arrest came eight years after he retired. CBRC was merged with China's insurance industry regulator to become the China Banking and Insurance Regulatory Commission in 2018.
Source: Supreme People's Procuratorate
INDONESIA
The future growth prospects of Indonesia's Islamic banking sector will depend on the country’s economic recovery and continuing regulatory forbearance, says Fitch Ratings.
Among the medium-term growth drivers are conducive government policies and regulations, more choices of Islamic liquidity-management products, increased digitalisation, and organic growth by newly formed PT Bank Syariah Indonesia.
The market share of sharia banks is projected to increase even as plans are underway to convert three regional Indonesian lenders to sharia banks by 2022.
Source: Fitch Ratings
Indonesia and the United Arab Emirates are expected to conclude a trade and investment deal in March after months of negotiations, said officials from the two sides.
The UAE and Indonesia last September initiated talks for a Comprehensive Economic Partnership Agreement (Cepa) aimed at eliminating tariffs and boosting investment between the two countries.
A senior Indonesian trade ministry official said the two sides were working on finalising the agreement and that it could be signed as early as next month. It was reported previously the trade deal covered sectors in energy, aviation, financial services, artificial intelligence, agriculture and defence. Indonesia is among several countries the UAE is exploring possible trade deals with.
Source: Reuters
JAPAN
Sumitomo Life Insurance has invested A$120 million ($85.6 million) in a 10-year health bond issued by the Asian Development Bank (ADB) to improve health outcomes in Asia Pacific, the life insurer announced on February 4.
The proceeds of the bond will be used to assist developing member countries in building up a robust healthcare network including to address the strain caused by the Covid-19 pandemic, including a health system enhancement project in the Philippines.
Source: Sumitomo Life Insurance
Sumitomo Life Insurance has invested A$120 million ($85.6 million) in a 10-year sustainable development bond issued by the Inter-American Development Bank (IDB) to address climate change and biodiversity.
The bond is the first sustainable development bond issued by IDB in Australian dollars with a focus on the sustainable development goals “climate action” and Sumitomo Life purchased the entire amount of the bond issue, the life insurer announced on February 9.
IDB is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean by providing support to the private sector in the region.
Source: Sumitomo Life Insurance
Meiji Yasuda Life Insurance has concluded a capital and business alliance contract with SDG Impact Japan (SIJ). As the first endeavour, they plan to form Asia’s first ESG engagement fund in February focused on the social impact created through communication with investees. Meiji Yasuda plans to invest 5 billion yen ($43.4 million) in this fund.
Through the alliance, Meiji Yasuda will enhance its endeavours such as responsible investment (ESG investment and finance, stewardship) with SIJ’s support based on their relevant knowledge. They will also implement employee exchange to share the know-how related to the world trends of the sustainability area, formation, operation of ESG funds, and engagement.
Source: Meiji Yasuda Life Insurance
KOREA
Korea Investment Corporation (KIC) plans to boost investments in Silicon Valley startups as it looks to the metaverse and artificial intelligence to accelerate its expansion in alternative assets. Chief executive officer Jin Seoung-ho said in an interview with Bloomberg that he also has his eyes on hotels, which he sees as a good play on the global recovery from the coronavirus pandemic.
Jin expects to add to headcount in the fund’s San Francisco office this year to explore investments in tech, health and green ventures in Silicon Valley. He didn’t offer details on any specific investments.
KIC will continue to seek investments in real estate, including hotels, which should benefit as travel increases. Its allocation to alternative assets, including private equity and hedge funds, will increase by about 2 percentage points in 2022. Fixed-income assets will be trimmed by around 3 percentage points this year as global monetary policy normalizes. Equities holdings will increase slightly.
Source: Bloomberg
Korea Teachers’ Pension recorded a return of 12% in 2021, the highest since its inception in 1974. The return amounted to 2.4 trillion won ($2 billion), also a record high. The record-breaking return was fueled by overseas stocks and the increased value of alternative assets, it said on Feb 4.
Overseas alternative assets and overseas equities respectively achieved 34.3% and 27.1% returns. The overseas investments were mainly in the US and other developed countries, the pension fund said. Domestic alternative assets and overseas bonds earned 15.8% and 7.9% returns, respectively.
Source: Korea Economic Daily
Korean Teachers’ Credit Union (KTCU) recorded an 11.3% return from investment last year, which equals 4.4 trillion won ($3.7 billion). The return rate is the highest since 2009, when KTCU gained more than 30% of return just after the global financial crisis.
The retirement fund’s assets under management increased from 36.7 trillion won in 2020 ($31.4 billion) to 42.4 trillion won ($35.3 billion) in 2021, a KTCU official said. The annualized return of 2021 was mainly backed by alternative investments, the official said.
Source: Korea Economic Daily
Public Officials Benefit Association (Poba) and The California State Teachers’ Retirement System (CalSTRS) have jointly invested $235 million in two multifamily assets in the US, an official from Koramco Asset Management told The Korea Economic Daily.
One asset is The Buchanan, a 15-story building with 286 units in Midtown Manhattan, New York. POBA and CalSTRS invested $160 million in the asset, expecting an 8.4% return. The current rental rate of the asset is around 80%.
The other asset is The Post Apartments in Seattle. The two institutional investors injected $75 million, expecting an 8.6% return, the official said.
Source: Korea Economic Daily
Kyobo Life Insurance said Friday it will press ahead with an initial public offering (IPO), despite a court ruling that could get in the way of its move. A day earlier, a Seoul court acquitted officials of Affinity Equity Partners and accountants with Deloitte Anjin on the charge of colluding to inflate the strike price of the fund's put option.
The Hong Kong-based private equity fund said it will seek a second arbitration to resolve the legal dispute with Kyobo Life Insurance within this month, claiming the court ruling proves that there was no problem with its value assessment.
Source: Yonhap
SINGAPORE
Temasek-backed Tikehau Capital, a pan-European asset manager, is targeting to raise US$180 million in bonds in the US Private Placement (USPP) market as it expands into North America.
The company said in a press release the proceeds will be used within Tikehau Capital’s sustainable framework. Tikehau is backed by Singapore state-owned investment company Temasek Holdings, which had a 4.1% interest as of end-2020, according to its annual report.
The USPP is a private bond market which allows companies to raise capital without meeting the legal requirements of the public market, such as releasing financial statements.
Source: finews.asia
Asia Healthcare Holdings (AHH), an investment entity of TPG Growth, has raised $170 million in fresh capital funding from Singapore’s sovereign wealth fund GIC.
Incubated by TPG Growth in 2016, AHH invests in and operates various specialty healthcare companies under a single enterprise. GIC’s partnership with TPG is expected help AHH add more single specialty healthcare entities under its network. To date, AHH, which started with a single facility in India, has invested about $200 million across the specialty healthcare sector, including oncology, maternity and childcare, and fertility.
Source: Business Standard
Singapore state investment company Temasek Holdings, along with US-based firm Salesforce Ventures, has become a minority investor in Switzerland-based climate finance firm South Pole.
Although details were not disclosed, the Swiss firm said that these investments “will reinforce South Pole’s strong commitment to scaling up climate action in Asia and North America,” in an official statement on February 9.
According to South Pole’s website, the firm, which was established in 2006, has provided nearly 1,000 projects in over 50 countries with climate finance to reduce over a gigaton of carbon dioxide emissions.
Temasek had a net portfolio value of $283.3 billion as of end-March 2021.
Source: South Pole
TAIWAN
Taiwan pension funds supervised by the Bureau of Labor Funds (BLF) posted an average investment return of 9.67% last year, up from 7.46% in 2020, as their investments in local stocks beat the market benchmark.
The eight pension and annuity funds’ total investment gain improved to NT$491.5 billion ($17.6 billion) from NT$348.3 billion in 2020, and their assets rose to NT$5.1 trillion from NT$4.98 trillion.
One-fifth of the funds’ assets are invested in Taiwanese stocks. These investments had a return of 30.6% versus the benchmark stock index which returned 23.66%.
Source: Asia Asset Management
THAILAND
The central bank of Thailand expects inflation in the country to be largely “contained” because the price pressures are not as broad-based compared to some developed markets, said its governor.
Head of Bank of Thailand Sethaput Suthiwartnarueput said overall inflation rate will remain within the central bank’s target range of between 1% and 3%.
In a recent review, the central bank surprised analysts by keeping its key interest rate unchanged at 0.5%, and said in a statement the economy will continue to recover and the fast-spreading omicron variant “would exert limited pressure on the public health system.”
Source: CNBC
The International Labour Organisation (ILO) has called on Thai policy makers to postpone the proposed National Pension Fund scheme while urging the government to make comprehensive reforms to address the demographic, economic and societal changes affecting the population in the coming years.
“An effective pension system will be key to adapt to an ageing population, and support recovery from the Covid-19 pandemic”, it said in its latest report, adding the delay of the roll out should be seen as part of the efforts to create a more “systematic pension reform".
The report has proposed reforms focused on an immediate increase in the level of the existing Old Age Allowance, a gradual rise in contribution rates and retirement age, an increase in the earnings cap as well as a reduction in the number of years needed for retirement income eligibility from 15 years to five years.
Source: ILO
INTERNATIONAL
Canada Pension Plan Investment Board (CPP Investments) ended its third quarter of fiscal 2022 on December 31, 2021, with net assets of $550.4 billion, compared to $541.5 billion at the end of the previous quarter — marking an $8.9 billion increase in net assets.
The Fund, which includes the combination of the base CPP and additional CPP accounts, achieved five-year and 10-year annualised net returns of 11.7% and 11.6%, respectively. For the quarter, the Fund returned 2.4%, according to a statement released on February 10.
Source: CPPIB