Sovereign Wealth Fund Institute

According to the press release, “Saudi Aramco and China Petrochemical Corporation (Sinopec) have agreed to formation of a joint venture related to the ongoing development of Yanbu Aramco Sinopec Refining Company (YASREF) Limited, formerly the Red Sea Refining Company. Presided over by His Excellency, Ali Ibrahim Al-Naimi, Minister of Petroleum and Mineral Resources and chairman [...]

In December 2011, the Abu Dhabi Investment Authority purchased 9.9% of Kemble Water Limited, the holding company of Thames Water. The private regulated utility company is responsible for the public water supply and waste water treatment in parts of Greater London, Thames Valley, Surrey, and other areas. The utility is regulated by the Office of [...]

Asian sovereign wealth funds are keen on China’s growing retail consumer sector. Both of the Singapore SWFs have a deep history investing in China.  On January 20, 2012, an affiliate of the Government of Singapore Investment Corporation Pte Ltd and TPG Capital will invest in convertible bonds in Hong Kong-listed China sportswear brand Li Ning [...]

Canadian public investors have been active in Latin America whether in direct company stakes, infrastructure, or core real estate. The Canada Pension Plan Investment Board (CPPIB) and Caisse de depot et placement du Quebec each invested $40 million to have full ownership in a beachfront shopping centre in Brazil’s Rio de Janeiro. The 138-store shopping [...]

The Korea Investment Corporation (KIC) views some European assets as attractive even during the current European sovereign debt crises. Middle East sovereign funds have shown lukewarm interest in direct European bank investment. Depending on individual liquidity needs, certain European governments and businesses are selling assets to raise cash, and sovereign wealth funds want to be [...]

Continental European financial institutions are in dire need of capital due to regulations, a frigid regional credit market environment, and the conditions of their balance sheets. Institutional money managers are watching who will step in first to invest in these upcoming rights issues. In 2007 and 2008 sovereign wealth funds mostly from Asia and the [...]

Ireland’s National Pensions Reserve Fund (NPRF) is allocating more money to domestic investments rather than overseas. This change in investment policy to invest more capital domestically stems from political and economic policy shifts. France and Italy have taken similar measures by creating strategic domestic investment funds. These strategic direct investment funds invest in companies that [...]

Venture capital is a risky asset class and has left a sour taste in the mouths of many public pension funds after the 2000 bust. With that being said, several large Canadian public investors in the East are allocating small portions of assets to venture capital, even creating dedicated venture capital teams. The California Public [...]

The long-term trend for direct sovereign wealth fund investment by sector is in. Starting in 2005 until the end of 2011, the financial sector is the most targeted for direct sovereign wealth fund investment. We calculate this from our most recent database statistic of US$134.72 billion. The financial sector is followed by the energy sector’s [...]

Several sovereign wealth funds invest a portion of their assets to capture and harvest the illiquid premium. Hence the improved aggregate demand for private equity, real estate, and infrastructure investments. Given their long-term nature, more and more SWFs are searching for means to capture this premium and capitalize on it. Take for instance Europe’s largest [...]

The commodity-based sovereign wealth fund, the Libyan Investment Authority (LIA) during the overthrow of Gaddafi was under United Nations Security Council sanctions. The interim government (cabinet) in Libya has approved the appointment of a board of trustees. The board of trustees will most likely include the minister of economy, minister of finance, and the governor [...]

Asset allocation to private equity and other alternatives has increased tremendously in the past decade. Investors struggle to deal with legacy private equity partnerships. Many public investors have private equity funds in their portfolio that perform in the bottom quartile. These funds have a very slim chance of generating a profit, but still feed on [...]

The Korea Investment Corporation (KIC) opened up their overseas European investment office in London on 1 Bartholomew Lane in December 2011 on the tenth floor. They now purchased an 80,000 square feet block at 1 Bartholomew Lane for around 75 million pounds. The property is opposite of the Bank of England. Hines, a U.S. real [...]

The fourth largest pension fund in the world, Korea’s National Pension Service (NPS) can now trade renminbi-denominated stocks and bonds in mainland China as a qualified foreign institutional investor (QFII). Korea’s NPS was founded in 1988 and established under the National Pension Act. In early 2006 the NPS launched an overseas investment team.[Content protected for [...]

Starting in 2005 until the end of 2011, the United States is the top targeted nation for direct sovereign wealth fund investment. We calculate this from our most recent database statistic of US$75.68 billion. The United States is followed by the United Kingdom’s US$ 67.68 billion. China is a major recipient of direct sovereign money [...]

Chile is a major copper producer; number three in the world. Chile designed its two sovereign wealth funds to draw from copper price windfalls. The Government of Chile plans to transfer $1.7 billion towards the country’s sovereign wealth funds. The two funds are called the Pension Reserve Fund (PRF), created in late 2006 and the [...]

According to the Syrian Arab News Agency, “President Bashar al-Assad on Wednesday issued the law No. 2 for 2012 stipulating for establishing the National Investment Fund with the aim of contributing to supporting the stability and enhancing the confidence in the market through adopting a long-term investment policy . The Fund also aims to achieve [...]

Singapore’s Temasek Holdings is stepping up investment activity in the North Asia region. It created Pavilion Capital Pte, a wholly owned company to invest in closely held companies and will focus on small and medium enterprises in China. The new entity will be run by Tow Heng Tan, its former chief investment officer and senior [...]

In general, 2011 was a tough year for sovereign investors. A major lack of public investor confidence combined with structural economic issues coming to roost depressed valuations in capital markets. Our staff has compiled a list of the top ten game-changers that will set the tone for sovereign wealth funds in 2012. 10.) Continual Low-Yield [...]

Abu Dhabi-based Mubadala Development recently sold a commercial property joint venture called John Buck International (JBI) for an undisclosed price. JBI was mainly tasked for the development of Sowwah Square in Abu Dhabi.  The commercial development project is located in Abu Dhabi’s latest business district on Sowwah Island.  In addition, JBI specializes in integrated facilities management. [...]

According to the U.S. Census Bureau, total assets of the largest 100 public defined benefit retirement systems declined 8.54% in the third quarter. It was the first overall quarterly loss for the U.S. public investor group in more than 1 year. The top 100 assets are ranked at US$ 2.534 trillion, a little more than [...]

In 1976, the State of Alaska amended its constitution by voter approval to create the APFC. In 1981, the actual administrative expenses were totaled at US$ 165,000. The market value at the time of June 30, 1981 was US$ 1,794,439,000. Asset Class Allocation from June 30, 1981 U.S. Treasury Notes and Bonds 35.3% Banker Acceptances [...]

It is a nebulous swamp for private equity firms to navigate nowadays. Fee compression, competition from other public investors, regulatory changes, quality deal flow, and the challenge of raising non-redeemable capital commitments to new and successor private funds are just a few of the tough challenges private equity firms are dealing with. Tighter financing is [...]

Saudi Arabia is an oil-based economy with strong state controls. The Kingdom of Saudi Arabia is the biggest exporter of petroleum in the world. When planning for their budget, they traditionally use a conservative price for oil of around $60 per barrel. If oil prices surge higher, then revenue and surplus levels next year will [...]

South Africa has been a key investment destination for China due to its natural resources, lower political risk profile compared to other African nations, and growing demographics. In fact, the China-Africa Development Fund has been an active investor in the country. The China Investment Corporation (CIC) will purchase a 25% stake in the Shanduka Group [...]

Over the past few years, solar energy has been in demand driven by government subsidies, rising cost of fossil fuels, shifting regulatory environments, and organizations wanting to go greener. Aggressive public policy from various states and nations have further increased stimulus and awarded tax credits in the renewable sector to foster industry growth. Then in [...]

The press release states, “GENIVAR Inc.(“GENIVAR” or the “Company”) announced today that it has completed an equity private placement (the “Private Placement”) of 6,500,000 common shares from treasury at a price of $24.57 per share for aggregate gross proceeds of $159,705,000. Participants in the Private Placement are Canada’s top two institutional investors, the Canada Pension [...]

According to the press release, “Dexia, Precision Capital and the State of the Grand Duchy of Luxembourg announce that they have entered into a binding memorandum of understanding on the acquisition by Precision Capital and the Grand Duchy of Luxembourg of the 99.906% stake in Dexia Banque Internationale à Luxembourg S.A. owned by the Dexia [...]

Domestic strategic development is a major goal for countries. Qatar and other oil-based economies are trying to diversify from their lucrative natural resource sector. In fact, sometimes countries can utilize a sovereign wealth fund to stimulate demand in specified sectors within a country. We have witnessed the creation of science parks and educational cities spread [...]

The Libyan Investment Authority (LIA) is aggressively trying to get back into the swing of things. Recently, Indonesia-based PT Medco Energi International Tbk through a wholly owned subsidiary Medco International Ventures Limited signed a commercial agreement with the Libyan Investment Authority (LIA) for its Area 47 field. MedcoEnergi is an integrated energy company.[Content protected for [...]

The press release states, “Global Logistic Properties Limited , the market leader in modern logistics facilities in China and Japan, today announced that GLP and China Investment Corporation, through their respective wholly-owned subsidiaries, have entered into a 50:50 joint venture to acquire 15 modern logistics facilities in Japan from LaSalle Investment Management  for JPY122.6 billion [...]

According to the press release, “The California Public Employees’ Retirement System (CalPERS) announced today that it has agreed to acquire a stake in a 65-mile submarine electric power transmission line that runs from Sayreville, New Jersey, to Hicksville, Long Island, New York. The agreement to purchase an interest in the Neptune Regional Transmission System from [...]

On December 19th, 2011, HRH Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud and Kingdom Holding Company (KHC) invested a combined US$ 300 million in Twitter. This represents a strategic stake in Twitter. There are more than 100 million active users on Twitter. Kingdom Holding Company is a public holding company from Saudi Arabia. Headquartered [...]

The Sovereign Wealth Fund Institute is a global organization designed to study sovereign wealth funds and other long-term governmental investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade, and other relevant issues. We provide specialized services such as research and consulting to various corporations, funds, and governments. The Sovereign Wealth Fund [...]

UK utility infrastructure remains in high demand. The Abu Dhabi Investment Authority (ADIA) plans to purchase a 9.9% stake in Kemble Water Limited, the holding company of Thames Water. ADIA is purchasing the stake from a consortium of investors led by Macquarie called Kemble Water Holdings Limited. The private regulated utility company is responsible for [...]

The Qatar Investment Authority (QIA) is a major player in European real estate, whether it is a finished asset or development.  Qatar Holdings LLC has made its first investment in a class-A office project in Poland. The sovereign wealth enterprise has signed a contract to purchase the development in Miasteczko Orange office complex in Warsaw [...]

The New Jersey Division of Investment manages the public pension fund which has around US$66 billion in assets. They have committed up to $1.8 billion in funds to be managed by the Blackstone Group. Up to US$ 1.5 billion will be placed in accounts managed exclusively for New Jersey by the Blackstone Group. Over the [...]

On December 8, Singapore’s Temasek Holdings raised 500 million in SGD from the sale of 2-Year zero coupon bonds. These bonds are exchangeable into shares of Hong Kong-listed supply chain manager Li and Fung. Temasek has issued exchangeable bonds through its holdings in Standard Chartered Bank shares.

The investor class of sovereign wealth funds has decreased by -1.16% to give the current total figure of US$4.755 trillion down from September 2011 of US$ 4.811 trillion. Most of the decrease can be attributed to negative public equity returns. See Fund Rankings Date 12/10/2011

The press release states, “the Ontario Teachers’ Pension Plan (Teachers’) today announced it has reached an agreement to sell its 79.53% ownership share in Maple Leaf Sports and Entertainment (MLSE) to Bell and Rogers Communications Inc. The purchase price for Teachers’ interest is $1.32 billion, based on an enterprise value of just over $2 billion. [...]

China has $3.2 trillion in foreign exchange reserves. Over the past decade, China has been a key investor in U.S. government debt; however, combined with factors such as low yields and quantitative easing, China is hedging itself up the asset class ladder further into equities. In 2007, China established the China Investment Corp (CIC). It [...]

A Sovereign Wealth Fund (SWF) is a state-owned investment fund or entity that is commonly established from balance of payments surpluses, official foreign currency operations, the proceeds of privatizations, governmental transfer payments, fiscal surpluses, and/or receipts resulting from resource exports. The definition of sovereign wealth fund exclude, among other things, foreign currency reserve assets held [...]

Globally, Qatar Holding LLC has been investing in natural resource and commodity companies for quite some time. They recently picked up a significant stake in European Goldfields Limited which included funding support for the company to develop gold deposits in Greece. Qatar Holding LLC is setting up a subsidiary called QH Indonesia to deploy $1 [...]

Some countries have multiple sovereign wealth funds. Some states have multiple public pension funds. Does it make sense to consolidate these governmental investment authorities to achieve greater economies of scale and be more cost effective? Due to its vast size in terms of geography and population, California is a state that has many different public [...]

A small minority of U.S. based public investors are taking a closer look at the external CIO approach. The Alaska Permanent Fund has adopted the external CIO approach for its real return mandate. Another similar type of investment program is called absolute return management strategies. CalPERS still has an absolute return management unit, but has [...]

The nations of Southeast Asia and the Gulf continue to build economic, social, and investment ties, especially due to the presence of Muslim culture embedded in both regions. Over the past few years trade between Malaysia and Qatar has increased. Malaysia and Qatar have announced a $2 billion joint investment fund that will target opportunities [...]

As of November 30, 2011, Japan’s reserve assets total US$ 1.305 trillion. This is a US$ 94.88 billion increase since the end of October. In November, Japanese authorities intervened in currency markets to prevent the yen from growing too strong. A strong yen negatively affects Japanese exporters by making their products more expensive overseas. Japan [...]

Abu Dhabi’s IPIC is now included in the LMTI ratings. SAMA Foreign Holdings, Saudi Arabian PIF, and the Abu Dhabi Investment Authority (ADIA) all moved up to a 4 rating. Malaysia’s Khazanah Nasional has moved up to a 5 rating. Read more Linaburg-Maduell Transparency Index

According to the press release, “Norges Bank Investment Management (NBIM), manager of the $550 billion Norwegian Government Pension Fund Global, has filed shareholder proposals for proxy access at six US companies as part of its efforts to strengthen shareholder rights. NBIM filed proposals on Nov. 22 at Wells Fargo, Charles Schwab, Western Union, Staples, Pioneer [...]

According to the press release, “His Excellency Dr. Mohammed bin Saleh Al-Sada, Minister of Energy and Industry of the State of Qatar, and Peter Voser, Chief Executive Officer of Shell, signed today a Heads of Agreement that sets the scope and commercial principles for the development of a world-scale petrochemicals complex in Ras Laffan Industrial [...]

Japan’s Government Pension Investment Fund (GPIF) had a rate of return of -3.32% from July to September, posting a 3.7326 trillion yen investment loss.  The worst performing asset class was international stocks which carried a -21.36% rate of return; follow by domestic stocks at -9.75%. The huge loss stems from mostly a major decline in [...]

The Kuwait Investment Authority (KIA) has long been an institutional investor in the United Kingdom. In fact, the KIA has an office in London and a subsidiary called the Kuwait Investment Office which was established in 1953. Recently, the KIA reaffirmed its commitment to investing in the United Kingdom and plays a significant role in [...]

The press release states, “Samsung C&T and the Korea National Oil Corporation (“KNOC”) will jointly acquire US oil and gas company Parallel Petroleum LLC (“Parallel”). Samsung C&T Oil & Gas Parallel Corp., Samsung C&T’s local subsidiary in the US, and KNOC signed a Purchase and Sale Agreement with PLLL Holdings, LLC, which owns Parallel, in [...]

According to the press release, “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease [...]

Globally, sovereign wealth funds have been holding steady on direct investing. The upper quartiles of deal transaction sizes are smaller compared to 2008 and 2009. Note that the last four quarters are not complete since data is still being accumulated for the fourth quarter of 2011. According to the sovereign wealth fund direct transaction database, [...]

The China Development Bank (CDB) is a government lender owned by the Government of China. They have been a chief source of capital for international project finance deals. The CDB has already expanded into various continents such as Africa (China-Africa Development Fund), South America, and Asia. Originally founded as a policy bank to pursue the [...]

Lou Jiwei, an executive at the China Investment Corporation (CIC) wrote in an op ed piece in the Financial Times. He stated the United States and Europe needs more investment in infrastructure, especially the United Kingdom. Many popular politicians on both sides of the pond agree that the West can spur some demand by repairing [...]

It seems that Middle Eastern based sovereign funds are more keen on investing in hospitality and resort developments compared to their Asian and European peers. This is good news for the Kingdom of Morocco.  Tourism is a key source of diversifiable revenue for the North African Kingdom of Morocco. The tourism industry in Morocco employs [...]

By Alexia Wai-Chun Tye Guest Contributor On 17 November 2011, representatives of the French financial, industrial and private equity community were invited to a celebration to mark the 3rd anniversary of the creation of France’s Fonds Stratégique d’Investissement (FSI) at the Elysées presidential palace. President Nicolas Sarkozy congratulated the sovereign wealth fund on its achievements [...]

Singapore’s Temasek Holdings along with other investors invested a round of US$ 89 million in Portola Pharmaceuticals via preferred equity. Portola Pharmaceuticals is a San Francisco biotech company that is working on an anti-clotting drug called betrixaban. This financing is for pushing the development through its Phase III betrixaban trial. Eight months ago Merck dropped [...]