Weekly investors roundup: Hong Kong's MPF starts digital push; Ontario Teachers targets Indian hospitals; KIC confirms new CIO

TOP NEWS OF THE WEEK

The first batch of pension providers will join Hong Kong’s Mandatory Provident Fund’s new electronic platform next year, taking the city’s compulsory pension fund a step closer to fully digitising its services.

China Life, Bank of East Asia (BEA), YF Life, Bank of Communications and RBC Investor Services Trust will join between June and August next year under a preliminary schedule, according to Cheng Yan-chee, managing director of the pension regulator Mandatory Provident Fund Schemes Authority (MPFA). The schedule is yet to be finalised.

Source: South China Morning Post

The Ontario Teachers' Pension Plan Board (Ontario Teachers), has agreed to acquire a significant majority stake in Sahyadri Hospitals Group, the largest private hospital chain in the Indian state of Maharashtra, from the Everstone Group, according to an official announcement on August 16.

The existing sponsors, Everstone Group, along with key management and founders will retain minority stakes in the company.

With 2,000 clinicians along with 2,600 supporting staff across its network of hospitals, Sahyadri’s facilities are concentrated around the city of Pune, which is the second largest city in Maharashtra by population.

This represents the latest investment by Ontario Teachers’ Private Capital team in healthcare businesses. The transaction is expected to close in Q4 2022 and is subject to customary closing conditions.

Source: Ontario Teachers

Lee Hoon, the head of Korea Investment Corporation's (KIC) investment strategy and innovation division, was named chief investment officer (CIO), the sovereign wealth fund announced August 17. Lee replaces Park Dae-yang who had been CIO since 2019 and whose term was up.

A KIC news release said Sean K. Lee, the head of KIC's strategy and innovation group, will replace Lee Hoon as head of the investment strategy and innovation division. He will retain his group role.

KIC also announced that Hoseok Jung Ho-seok has been named chief risk officer. Jung comes to KIC from the Bank of Korea, where he led the Planning and Coordination Department.

Source: KIC

Also read: KIC's internal recruitment of new CIO seen as a wise choice

OTHER INVESTMENT NEWS

AUSTRALIA

AustralianSuper plans to more than double its headcount at its London office as Australia’s largest superannuation fund continues to seek investment opportunities abroad en route to becoming a $350 billion (A$500 billion) fund within five years, according to Chief Executive Officer Paul Schroder.

Speaking at a webinar organised by Reuters, he said the majority of the fund’s assets is managed outside of Australia. The Australian super fund also has offices in New York and Beijing.

“Six or seven out of every ten new dollars we get will be managed offshore… We have a tremendous office in London, there’s 70 people in there, and we are on our way to 150 or perhaps 200 people,” he said at the August 16 webinar.

Source: Reuters

Also read: Super industry ‘too big for Australia’, says AustralianSuper CEO Paul Schroder

CHINA

A court in China has sentenced Xiao Jianhua, the founder of Tomorrow Group, to 13 years in prison, and slapped a fine of 55 billion yuan ($8.1 billion) on the conglomerate, bookending the dramatic break-up of China’s largest privately owned financial empire after a five-year investigation.

The Canadian-Chinese tycoon – who disappeared from a luxury hotel in Hong Kong in 2017 – was found guilty of illegally collecting public deposits, using entrusted assets in breach of trust, illegally using funds and bribery, according to a statement by the Shanghai No 1 Intermediate People’s Court on Friday. Xiao was also personally fined 6.5 million yuan.

The sentencing closed the clean-up of Xiao’s financial empire comprising assets worth 3 trillion yuan, and is part of Beijing’s ramped-up efforts to control financial risks in recent years.

The tycoon and the company had illegally collected deposits of 311.6 billion yuan by selling trust, insurance and wealth management products, which were against regulations, the court said. They also had used illegal insurance funds of close to 191 billion yuan from connected insurers including Huaxia Insurance, Tian’an Life Insurance and Yi’an Property Insurance, the court added.

Source: South China Morning Post

HONG KONG

Dah Sing Financial Holdings is seeking a new insurance partner after it terminated an agreement with Tahoe Life Insurance, according to people familiar with the matter.

The Hong Kong banking group is working with an adviser to pursue a so-called bancassurance partnership, the people said, asking not to be identified because the matter is private. A deal, which could be worth a few hundred million dollars, could draw interest from other insurers seeking to expand in the territory, they said.

In a bancassurance agreement, an insurer typically pays an upfront amount to sell its products in the bank’s branches. Dah Sing’s 2017 insurance distribution agreement with Tahoe Life in Hong Kong was set to run for 15 years. In July, Dah Sing said it was ending the Tahoe Life pact, alleging breaches of the agreement.

Source: Bloomberg

A key shareholder in Australia's most expensive casino development has a long history of association with organised crime figures and people blacklisted by gambling regulators around the world, an ABC investigation has confirmed.

Chow Tai Fook, controlled by the powerful Cheng family in Hong Kong, was endorsed by the Queensland government in 2015 as a fit and proper partner in its new $3.8 billion casino development at Queen's Wharf.

ABC Investigations can reveal Chow Tai Fook and associated companies have been linked to Chinese organised crime for decades.

One of these companies is still in business with a long-time associate of a notorious Macau gangster, Wan Kuok Koi, also known as "Broken Tooth".

Source: ABC News

Financial firms continue to reconsider staffing plans in Hong Kong due to Covid-linked restrictions with more than a third of global asset managers having moved regional and global posts out of the city, according to a recent survey.

35% of global asset managers have moved regional and global posts out of Hong Kong, according to a survey by the Hong Kong Investment Fund Association (HKIFA). Around 13% of respondents said they had cut headcount in Hong Kong while one-third allowed staff to permanently work overseas, including Hong Kong-based employees.

Source: finews.asia

KOREA

Korea’s National Pension Service (NPS) has lowered the number of shares it holds of Samsung Electronics, while increasing its stake in Taiwanese semiconductor company TSMC.

According to the public disclosure information released by the pension service provider, the NPS holds an 8.52% stake in Samsung Electronics, as of the end of last year. It is the lowest stake since 2018, when the Korea-headquartered global chipmaker conducted a stock split of 50:1.

NPS sold a significant portion of its Samsung shares throughout year 2021, when the stock's price enjoyed a rally, particularly in the first half of last year. While the NPS reduced its ownership stake in Samsung last year, its stake in TSMC, the Taiwanese semiconductor manufacturer and Samsung's main competitor in the global foundry market, has increased to 0.29% at the end of 2021, a 0.04-percentage point increase from the previous year's 0.25%.

The NPS explained that the decrease in the pension provider's ownership of Samsung stocks and the increase of stakes in overseas companies are largely attributed to the pension agency's long-term strategic investment plans.

Source: Korea Times

Also read: NPS story link

Concerns have once again been raised over the NPS agency's ability to manage the national pension fund. NPS faces the daunting task of reforming its pension system, as the fund is set to be depleted in the coming decades, with Korea's population aging rapidly.

The Federation of Korean Industries' research unit projects that the percentage of people aged 65 and older will rise from the current 17.3% to 37% in 2045, making South Korea the most aged country in the world. The federation forecasts that the pension fund will enter a deficit in 2039 and be depleted in 2055 under the current scheme.

The Ministry of Health and Welfare has initiated a process to calculate a more accurate estimate by March of next year, as part of a process to fix the pension system.

Source: Korea Times

Korea Teachers Pension is among the 42 entities for which the Korean government will change its guidelines and drop from direct state management for greater independence and liability in the public sector.

The change was decided at the public institution management committee meeting held on August 18. The government will revise the classification system for public companies and quasi-government agencies to include those with up to 300 staffs, total revenue of W20 million won ($15 million) or more, and W3 billion or more in assets.

The current classification system, which has been kept the same over the last 15 years, draws the line at up to 50 staffs, total revenue of 3 billion won and 1 billion won in assets.

Source: Maeil Business News Korea

MALAYSIA

The chiefs of Malaysia’s top two pension funds, Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP), expressed commitment to environmental, social and governance principles and warned that the funds will disinvest from companies that flout the sustainable investing rules.

EPF, Malaysia’s largest pension fund, has been on the sustainability journey “for a while now” and aims to become fully ESG-compliant by 2030, Chief Executive Officer Amir Hamzah Azizan.

“By 2050, we aim to achieve a carbon neutral portfolio,” he said at a virtual panel discussion organised by Maybank Investment Bank and the Malaysian stock exchange on August 15.

According to his counterpart at the second largest pension fund KWAP, Nik Amlizan Mohamed, “the best practices of ESG can only contribute towards generating long-term returns to the fund”.

Source: Asia Asset Management

NEW ZEALAND

The Guardians of New Zealand Superannuation Fund, the sovereign entity that manages the NZ Super Fund, has confirmed that it will accept the Crown’s NZ$ 527 million ($326.4 million) offer for its 25% shareholding in Kiwi Group Holdings Ltd (KGHL), which owns Kiwibank and New Zealand Home Loans.

Kiwi Group Holdings is owned by New Zealand Post (which holds a 53% stake), the Guardians of the New Zealand Superannuation Fund (25%), and the Accident Compensation Corporation (22%).

The deal means that the New Zealand government will take direct ownership of Kiwibank in a deal valuing the lender at NZ$ 2.1 billion ($1.3 billion).

Source: SWFI

SINGAPORE

Singapore state investment company Temasek Holdings and local venture capital firm Ericsenz Group have teamed up to invest an undisclosed sum in Los Angeles-based Spire Animation Studios.

According to Chief Executive Officer P.J. Gunsagar, the firm has now raised more than $40 million in funding, which will help with its efforts make new kinds of films with games engine tools and “great” metaverse experiences.

Established in 2002, Spire’s animation credits include The Lego Batman Movie, Cars 2, Ratatouille, How to Train your Dragon, and Storks.

Source: Asia Asset Management

TAIWAN

Public Service Pension Fund’s (PSPF) investments swung into the red in the first half of 2022 as markets were battered by the war in Ukraine, US rate hikes and China’s Covid-19 lockdowns.

PSPF, a mandatory defined-benefit retirement scheme for Taiwan’s civil servants, teachers and military personnel, says it will keep tabs on global inflation and monetary policies in making asset allocation decisions, and focus on “highly defensive” assets and high-value strategies.

The pension fund incurred an investment loss of NT$58.4 billion ($1.94 billion) or 8.07% in the six months to June.

“The bear run took a toll on PSPF’s performance,” the fund says in a statement on August 18, pointing out that the MSCI Global Index and Taiwan Capitalisation Weighted Stock Index plunged 20.18% and 18.62%, respectively, in the first half of the year.

Source: Asia Asset Management

A former senior official in the Ministry of Labor has been sentenced to nine years in jail for his role in a labor fund scandal in which he manipulated the share price of select stock to allow PJ Asset Management to make more than NT$500 million ($16.67 million) in profit, the Taipei District Court said Friday.

In a ruling, the court said Yu Nai-wen, former head of the domestic investment division of the MOL's Bureau of Labor Funds (BLF), manipulated the share price of Far Eastern Department to benefit PJ Asset Management, and in turn used the investment company's economic and political influence to help him get a promotion.

Source: Focus Taiwan

INTERNATIONAL

Canada's second-largest pension fund Caisse de dépôt et placement du Québec (CDPQ) is exploring legal options over bankrupt crypto lending firm Celsius and will no longer invest in crypto firms, it said August 17.

CDPQ's statement came as the fund recovers from its failed investment in New Jersey-based Celsius, which filed for bankruptcy in July less than a year after it received an investment of $150 million from the fund.

"We will preserve our rights and explore legal options," CDPQ Chief Executive Charles Emond said on an earnings conference call, adding the fund had focused on the future potential of Celsius instead of present performance.

Source: Reuters