Weekly investors roundup: KIC eyes bonds; Canadian pension funds pave their way in India
TOP NEWS OF THE WEEK
Korea Investment Corporation (KIC) will buy more bonds, joining a handful of big-name investors who see value in the beaten-down asset class.
The sovereign wealth fund, which had trimmed the bond allocation to 31.7% at the end of August, now plans to increase the ratio again, according to remarks by Chief Executive Officer Jin Seoung-ho confirmed by KIC. The fund only invests outside of South Korea.
"With a surge in rates offering carry (income) and concerns about recession, bonds look relatively more attractive at this point," Jin told reporters in New York. "We plan to increase the allocation for bonds."
Canada Pension Plan Investment Board (CPP Investments) and Ontario Teachers’ Pension Plan Board (Ontario Teachers’), has increased their investments in the National Highways Infra Trust (NHIT)) sponsored by the National Highways Authority of India (NHAI).
CPP Investments have made an equity investment of $43.4 million in National Highways Infra Trust. It was made through an institutional placement undertaken by NHIT and follows an initial $186 million (C$257 million) investment the fund made in NHITs IPO in November 2021. Following the current transaction, the CPP Investments will continue to hold a 25% stake in NHIT.
Ontario Teachers’ has been allocated a 25% stake in the follow-on unit capital raise of NHIT. Ontario Teachers’ also invested $43.4 million for the follow-on investment in NHIT, which, together with its earlier investment in November 2021 takes its total investment in NHIT to $222.9 million.
In addition to Ontario Teachers’ allocation, NHAI, as the sponsor, also invested 15% in the follow-on raise, with additional funding from a diverse selection of institutional investors. The capital raised will be used to acquire three additional road concessions from NHAI, after which NHIT will own, operate and maintain a portfolio of eight toll roads in the Indian states of Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Telangana and Uttar Pradesh.
Source: Ontario Teachers’, CPP Investments
OTHER INVESTMENT NEWS
The Teacher Retirement System (TRS) of Texas is set to settle on a new emerging markets stock benchmark, which will effectively cut its exposure to Chinese stocks by half, from 3% to 1.5%
The $184 billion Texas Teachers' pension fund received an approval in September to move to a new benchmark which has a proportionate mix of two MSCI emerging markets indexes — one with and one without China.
A document submitted by TRS in September outlined the shift being made to reduce China's allocation in MSCI Emerging Markets Index by half given China's "outsized weight" in the benchmark and to improve the diversification of the benchmark.
Endowus, a digital wealth advisory platform, has completed its acquisition of a majority stake in Carret Private Investments, a Hong Kong-based wealth manager and multi-family office that serves ultra-high-net-worth individuals, families, trusts and charitable organisations, the firm announced on Monday.
Endowus was established in Singapore as an independent digital wealth advisor to span both private wealth and public pension savings (Central Provident Fund & Supplementary Retirement Scheme).
This acquisition furthers its commitment to bring professional independent advisory services and investment solutions to the private wealth market in Hong Kong and Singapore, which together represent over 90% of cross-border wealth in Asia.
Caisse de dépôt et placement du Québec (CDPQ) and Asia-Pacific renewable energy firm Vena Energy have agreed to a ¥9.3 billion ($63.88 million) green project bond, marking CDPQ’s first financing of a renewable energy project in Japan and Vena’s inaugural foray into the international project bond market.
The proceeds will be used to finance a 35-megawatt (MW) solar energy project located in Fukushima prefecture. The project can supply more than 7,000 Japanese households with renewable energy per year. Compared with conventional thermal generation, it has the potential to reduce up to 22,283 tonnes of greenhouse gas emissions yearly, while saving approximately 35 million litres of water.
The National Pension Service (NPS) has been found to have invested a large sum of money in the so-called “sin stocks” that include liquor, tobacco and gambling businesses,
Representative Nam In-soon of the Democratic Party referred to an NP report that around W5.29 trillion ($3.71 billion) had been invested in sin stocks as of February 2022.
Among the NPS’s domestic sin stock investments, 52.1% was allotted to KT&G, South Korea’s dominant tobacco company, followed by the state-run casino operator Kangwon Land (23.3%) and beverage company Hite Jinro (12.9%). The NPS also invested in foreign liquor, tobacco and gambling businesses including Philip Morris International, Heineken, Diageo, British American Tobacco and AB InBev.
Source: Korea Bizwire
The Pension Foundation of Presbyterian Church of Korea is looking for asset managers for alternative assets and equities.
The Korea church fund opens tender for a W500 billion ($347 million) mandate. The alternatives strategy in the mandate will focus on real estate, infrastructure and private equity funds.
These alternative investment targets include airlifts, ships, power plants, roads and ports. The pension aims for 6-10% returns.
Source: The Korea Economic Daily
The Korea Deposit Insurance Corporation is planning to choose a company to be in charge of selling MG Non-Life Insurance after October 21 and then announce the bid within this year.
MG Non-Life Insurance has been under the control of the corporation and the Financial Supervisory Service since April. At that time, the insurance company’s liabilities exceeded its assets by W113.9 billion and it failed to keep its promise to increase its capital by W150 billion ($104 million). As a result, it was designated as an insolvent insurer.
Korea Development Bank (KDB) and Consus Asset Management ―the two major shareholders of the life insurance firm ― are reportedly set to send a prospectus on the sale to potential buyers of KDB Life Insurance as early as the end of the this month. KDB is also planning to officially announce the sale of KDB Life, after gaining the board's approval scheduled later this month.
Given that this is the lender's fifth attempt to sell the life insurance company, market attention is focused on whether the long-awaited sale will finally go through. The state lender first tried to sell the life insurer in 2014, followed by two more failed attempts within the next two years
In September 2020, KDB was able to sign a stock sale agreement with JC Partners on the sale of the insurance company. But the deal finally broke off early this year, as the financial authority did not approve JC Partners' qualification to acquire the life insurer.
Source: Korea Times
Former GIC vice-president of private equity funds and co-investments, Wu Menglin, has been appointed head of fund of funds for Yangzijiang Financial.
In her new role, Wu will lead the due diligence and selection process of the group’s investments in international funds outside of China, said Yangzijiang Financial in a bourse announcement on October 10.
In her 10-year stint at GIC, Wu managed fund investments in Asia and co-investments in sectors including healthcare; advanced manufacturing; consumer; technology, media and telecom; fintech; and business services.
Source:The Business Times
Temasek subsidiary Fullerton Fund Management sold 1.2 million of its shares in airport service firm Sats for some S$3.5 million ($2.45 million) or S$2.982 apiece, according to a bourse filing on October 12.
In another bourse filing on Thursday, Temasek Holdings revealed that Fullerton had sold another 629,500 shares on October 10 for S$1.9 million. As a result, Temasek’s deemed interest declined from 40.02% to 39.96% of the total number of voting shares.
Temasek now has deemed interest in Sats primarily through Venezio Investments, as well as through Singapore Airlines, DBS and Fullerton.
The disposal of shares came two weeks after Sats announced its plans to acquire Paris-based air cargo handler Worldwide Flight Services for a maximum total consideration of about 1.3 billion euros ($1.27 billion). The announcement sparked a sell-off and Sats’ share price hit a two-year low on Wednesday.
Source: The Business Times
Arlington County Employees' Retirement System from the US state of Virgina hired Wellington Management to run about $70 million in active Asia-Pacific ex-Japan equities.
The $3.1 billion pension fund's board approved the hiring at its October 6 meeting, said Susie Ardeshir, executive director and chief investment officer.
Funding comes from the termination of incumbent manager T. Rowe Price Group due to personnel changes, Ardeshir said. The pension fund's target allocation to international equities is 19%.
Source: Pension & Investments