Weekly investors roundup: Qantas Super eyes low-carbon equity portfolio; Korea's pension giants lower domestic stocks

TOP NEWS OF THE WEEK:

Qantas Super has allocated A$2 billion to Calvert Research and Management and Goldman Sachs Asset Management to reduce carbon intensity across its equity portfolios as part of its efforts to meet its 2050 net-zero carbon emissions goal.

The A$8.5 billion pension fund will split the allocation equally between the two investment managers, which will invest the funds solely in sustainable listed equities on behalf of Qantas Super.

The super fund announced its net-zero carbon emissions goal in 2021, which will be executed in three phases, with the first phase targeting a 24% reduction in emissions by 2025.

Source: MarketWatch

South Korea's three major pension funds are preparing to lower their investments in domestic stocks, over lower-than-expected investment returns on the paths to rebalancing their management portfolios.

Financial sources said on Monday (June 6) that the National Pension Service plans to reduce its domestic stock holdings from 17.5% of its total holdings in 2021 to 15% by 2025.

During the same time period, Teachers' Pension is considering reallocating the rate of domestic stocks in its total assets from 19.1% to 14.5%, while the Government Employees Pension Service pushes to reduce the rate from 18.5% to 10%.

Source: Korea Times

Dajia Insurance Group is reportedly exploring a sale of some of its luxury hotels, seeking to cash in on surging travel demand even as rising interest rates make financing real estate transactions more expensive.

Dajia, which took over most of the operations of Anbang Insurance Group, is tapping advisers for a potential transaction. The hotels that could be sold include the Montage Laguna Beach in California and Four Seasons resorts in Jackson Hole, Wyoming, and Scottsdale, Arizona. Dajia refinanced all three assets last year.

Source: Bloomberg

MORE INVESTMENT NEWS:

AUSTRALIA

Cbus has acquired a 10% interest in a Copenhagen Infrastructure Partners (CIP) offshore wind project in Australia.

The wind project, Star of the South is to be located off the south coast of Gippsland in Victoria, with a capacity of up to 2.2 GW. The project will have the potential to power 1.2 million homes and supply up to 20% of Victoria’s electricity needs.

The investment follows Cbus’ investment into CIP’s flagship fun CI IV, which is also the majority owner of Star of the South.

“Star of the South is a landmark investment for Australian superannuation into the local offshore wind sector… Star of the South will support, establish and grow the offshore wind industry in Australia, while assisting the Victorian Government’s commitment to a net-zero emissions economy,” Kristian Fok, chief investment officer at Cbus said in a statement.

Source: Cbus

The ASX has named Helen Lofthouse as its first female managing director and chief executive, replacing Dominic Stevens who resigned in February.

Lofthouse has been with the bourse since 2015 and is currently its group executive for markets. She will take up the post in August.

Before joining the ASX, she was a managing director at UBS in London and had senior roles at JP Morgan.

Source: ASX, Financial Standard

CHINA

China’s banking regulator imposed multimillion-yuan fines on two banks for violating rules on wealth management products, the first such penalty since they came into effect in January.

The fines were imposed on Bank of China and China Everbright Bank and their wealth management units, both of which were established by their parent companies in 2019.

The rules seek to stamp out shadow banking risks by imposing stringent requirements such as leverage limits and banning malpractices like providing investors with an implicit guarantee against losses.

Source: South China Morning Post

INDONESIA

The total assets of Indonesia’s insurance industry reached Rp1,637 trillion ($113.4 billion) in March 2022, an increase of 12.9% compared to the corresponding period of the previous year, according to the country’s central bank, Bank Indonesia.

Pension funds also showed rapid progress by recording total net assets of Rp329 trillion, or growth of around 6% year-on-year. The assets consisted of Rp321 trillion in investments, accounting for 27.5% of all assets owned by pension funds.

Source: Antara

HONG KONG

Hong Kong's mandatory provident funds will be allowed to invest in Chinese government bonds from June 10 onwards, after the territory's Legislative Council passed a regulation.

These include bonds issued or unconditionally guaranteed by the central government, the People's Bank of China, and three mainland policy banks.

Source: The Standard

INTERNATIONAL

The Israeli Citizens' Fund will begin operations on June 1 after a years-long delay, according to an Israeli Finance Ministry statement.

The sovereign wealth fund was set up in 2014 after Israel began major production of natural gas it had found in the east Mediterranean. The taxes on profits from the natural gas and other resources has surpassed the 1 billion shekel ($301 million) minimum to greenlight operations, the finance ministry said.

A portion (3.5%) of the 1.14 billion shekel total will be allocated for social, economic and educational purposes.

Source: Reuters

KOREA

Korea Teachers’ Credit Union (KTCU) made a solid profit from the sale of South Korea’s landmark office Alpharium Tower for 1.02 trillion won ($827.3 million), marking a record-high price per unit area for office deals in Pangyo, so-called Korea's Silicon Valley

KTCU, which invested 110 billion won to become the largest shareholder with a 39.6% stake in the property in 2017, gained 285.3 billion won in cumulative returns including the principal, real estate industry sources said on May 29.

Singapore-based ARA Asset Management’s Korea unit acquired the property from real estate project financing vehicle (PFV) Alphadom City for 527.9 billion won in 2017. KTCU, which invested 110 billion won in ARA Asset’s 277.8 billion won REIT for the deal at the time, has earned 285.3 billion won in aggregate. The earnings comprise the principal, 142.7 billion won in gains on the sale and 32.6 billion won in dividends. The net internal rate of return (IRR) reached 21.9%.

Source: The Korea Economic Daily

MALAYSIA

A bill to create a sovereign wealth fund in Sarawak will be tabled in the State Legislative Assembly this November, said Sarawak premier Abang Johari Tun Openg.

He said the fund, modelled after the Government Pension Fund Global of Norway, would begin its operation in 2024. In a message on May 31 in conjunction with the Gawai Dayak 2022 celebration, he said Sarawak now had the largest financial reserves compared to other states and that it should be reinvested to provide long-term benefits for the people.

Source: The Edge

SINGAPORE

Singapore sovereign wealth fund GIC and Greystar Real Estate Partners have formed a joint venture to acquire Student Roost, the UK’s third-largest purpose-built student accommodation (PBSA) provider from one of Brookfield’s real estate private funds, according to a joint press statement on May 30.

No financial details were mentioned in the statement. The transaction is expected to close in the third quarter of 2022 and is subject to customary closing conditions. Student Roost’s portfolio comprises over 23,000 beds with a secured development pipeline of approximately 3,000 further beds covering key UK university cities.

Source: GIC