Weekly investors roundup: Korea's KTCU doubles down on CalSTRS JV; GIC pushes further into Australia logistics; Alibaba co-founder flees US stocks
TOP NEWS OF THE WEEK
Korean Teachers’ Credit Union (KTCU), a retirement fund for South Korean teachers and employees, and the California State Teachers' Retirement System (CalSTRS) signed an investment partnership agreement on Aug. 30, KTCU said on September 7.
Under the agreement, the two parties will review starting a second joint venture for real estate, invest in a broader range of assets and strengthen their business collaborations. KTCU and CalSTRS signed an agreement to launch their first real estate JV with 612.2 billion won ($442.2 million) of capital in March. The venture aims to invest in US-based logistics centers, KTCU said at the time.
ESR has launched the third in its series of core-plus logistics funds focused on the Australian market, with financial backing by Singapore’s sovereign wealth fund GIC.
ESR Australia Logistics Partnership III has received an equity commitment of A$600 million ($410 million), equalling the fundraising haul achieved by each of EALP I and EALP II, Hong Kong-listed ESR said Friday in an official release.
The two previous vehicles backed by GIC are now fully allocated to a combined portfolio of 682,016 square metres (over 7.3 million square feet) across Australia, with the 2021-vintage EALP II holding 17 assets representing an expected end value of A$1.3 billion.
The investment firm that manages part of Alibaba Group Holding co-founder Joe Tsai’s fortune is on a rapid retreat from US stocks as it increasingly focuses on private markets.
Blue Pool Capital has ditched holdings in more than 30 US-listed companies — mostly in the tech sector — since the start of last year. Those include Alphabet Inc., Microsoft Corp. and Twitter Inc., regulatory filings show.
The only US stock it owned as of the end of June was asset manager Blue Owl Capital Inc., though it has since trimmed its stake to 9.8%, with more than a dozen sales reported last month. It previously reported a 14% holding as recently as December.
Meantime, Blue Pool has invested in more than 10 unlisted startups globally since early 2021 in sectors including sports, blockchain and healthcare.
OTHER INVESTMENT NEWS
The Australian Prudential Regulation Authority (APRA) has outlined plans for its multi-year program to modernise the prudential architecture – a core strategic initiative to make the design of the regulatory framework clearer, simpler and more adaptable — for banks, insurers and super funds.
The program, which commenced last year, is intended to ensure the framework continues to underpin financial safety and stability in a rapidly changing economic and technological environment.
APRA aims to achieve this enhance framework through a series of initiatives focused on: better regulation to ensuring prudential standards and guidance are easier to navigate, understand and implement; exploring how to use technology to support better regulation; and developing new approaches to tackle emerging risks and new business models on the regulatory perimeter.
The California State Teachers' Retirement System (CalSTRS) is reportedly seeking China-focused equity managers for the first time in its history, due to demand for asset diversification in the wake of growing concerns of rising inflation and an in-bound recession.
CalSTRS had roughly $3.7 billion worth of investments in Chinese equities at the end of June through both internally and externally managed strategies, according to Reuters.
The pension fund made a request for proposal (RFP) for fund managers last month, and plans to establish new investment categories targeting Chinese equities. Interested funds have until October 10 to respond to the proposal.
Principal Financial Group is considering selling its pension fund business in Hong Kong, people familiar with the matter said, a move that would help the US financial services firm streamline its portfolio.
The company is working with an adviser to sound out preliminary interest in the assets, the people said, asking not to be identified because the matter is private. A sale could fetch a few hundred million dollars, and attract interest from insurers and banks seeking to expand in the Asian financial hub, the people said.
Deliberations are at an early stage, no final decisions have been made and Principal could still decide against pursuing a deal, the people said. A representative for Principal declined to comment.
FWD Group Holdings, the Asian insurer backed by billionaire Richard Li, is weighing 2023 as a new target for its long-awaited Hong Kong initial public offering, according to people familiar with the matter.
FWD, which in May decided to postpone its listing in the Asian financial hub due to a weak market, is working toward a potential share sale as early as the first quarter of next year, the people said, asking not to be identified because the matter is private. The insurer has been seeking to raise about $1 billion in an IPO, although the final size hasn’t been formally decided, the people said.
The company plans to refile its listing documents with more recent financial details as soon as next week, the people said. The updated filing would show earnings growth in the first half of this year despite headwinds faced by the industry due to the pandemic, they said.
Considerations are ongoing and details such as size and timing could still change, the people said. A representative for FWD declined to comment.
Residents leaving Hong Kong for good withdrew a total of HK$2.114 billion ($269.31 million) from their pension accounts in the second quarter of 2022, up 0.9% from a year earlier, government data showed on Wednesday, a sign that more people were moving out of the financial hub.
Curbs to control the spread of COVID-19 are partly blamed for a net outflow of 113,200 people from Hong Kong between mid-2021 and mid-2022, according to government estimates.
A total of 8,600 claims to withdraw from the Mandatory Provident Fund (MPF) were made in the April-June quarter, compared with the 8,000 claims taking out HK$2.095 billion during the same period in 2021, the data showed.
The figure was higher than the 7,500 claims for the January-March quarter that saw withdrawals of HK$2.014 billion.
The Abu Dhabi Investment Authority (ADIA), CPP Investments and General Atlantic are currently evaluating a $200-$300 million investment in API Holdings, the parent of PharmEasy, multiple sources have reported to the Economic Times of India.
The valuation of India’s largest online pharmacy has also dropped dramatically to almost half of their October 2021 pre-IPO valuation of $5.4 billion in its pre-IPO round. These new investors could be in for a significant discount with its current valuation estimated to be at around $2.5 billion to $2.75 billion.
ADIA, CPPIB and General Atlantic, along with existing investors in API Holdings —TPG Growth, Prosus Ventures and Temasek — will invest about $70-$100 million in this latest round through a convertible instrument (CCPS) but the valuation and pricing will be determined by the latest set of investors.
Source: The Economic Times of India
South Korea may keep the National Pension Service (NPS) from increasing its power for shareholder derivative suits to mitigate concerns among local companies over its excessive influence on their management activities.
The government is also likely to enhance the expertise of the National Pension Fund Management Committee, the top decision maker of the fund, to improve its profitability and sustainability. In addition, the country will seek steps for pension holders to pay more and receive less.
President Yoon Seok-yeol was understood to have recently ordered his aides to check for any problems on measures sought by his predecessor Moon Jae-in to boost the fund’s representative shareholder litigation against domestic companies, according to sources of the government and the fund.
Source: Korea Economic Daily
Kyobo Life is examining the option of pursuing an overseas listing on the US stock market, as its attempt to go public on the Korean stock market was denied two months ago.
According to financial industry sources, the life insurer has begun internal discussions on the topic of going public on the US stock market with a preference for the New York Stock Exchange (NYSE).
It's not the first time that the life insurer has examined the option of an overseas listing. Kyobo Life had also studied and considered going public on other major stock markets, including those of the US, Hong Kong, Shanghai and London. Back then, the option was more considered long-term strategic planning for the company's various possible listing scenarios, given that major local financial groups like KB and Shinhan are successfully dual-listed on the Korean and U.S. stock markets.
Source: Korea Times
Saudi Arabia’s $620 billion sovereign wealth fund is reportedly the leading investor in the running to buy a minority stake in Kuwaiti conglomerate Alshaya Group’s Starbucks Corp. franchise, people allegedly familiar with the matter told Bloomberg.
The Public Investment Fund is leading a consortium of investors competing for a stake in the business and are close to reaching an agreement in the coming weeks. Private equity firms may invest in the company’s debt alongside the PIF, said the report.
Alshaya had previously indicated they valued the business at $15 billion but prospective buyers expect the bids will value it closer to around $11 billion.
The Asian Development Bank (ADB) will invest $15 million in the second investment vehicle of Singapore-based private equity firm KV Asia Capital.
ADB said that its investment in KV Asia Capital Fund II LP will help improve access to capital and enhance sustainable development in Southeast Asia.
The investment vehicle has is targeting funding of $300 million to invest in buyouts and control private equity transactions in mid-cap companies across Asia — particularly in manufacturing, education, healthcare and consumer services sectors. It targets ticket sizes of $20 - $100 million.
Taiwan’s Public Service Pension Fund’s (PSPF) investments remained in the red in the seven months through July, though the 5.58% or NT$40.17 billion (US$1.3 billion) loss was narrower than in the first half as gains from its internally managed bond portfolio jumped more than eight-fold compared to the same period of 2021.
The pension fund released the figures in a statement on September 2 without providing any explanation, nor did it discuss the outlook. However, in a review of its first-half performance last month, PSPF noted that the bear run in global financial markets due to US rate hikes and the war in Ukraine took a toll on its investments.
Last year, the fund reported an investment gain of NT$56.8 billion or 8.53% from January through July.
Source: Asia Asset Management