Sovereign Wealth Fund Institute

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According to the press release, “Laricina Energy Ltd. (Laricina or the Company) is pleased to announce that it has completed today a private placement to a wholly-owned subsidiary of Korea Investment Corporation (KIC) of 1,666,000 common shares at Cdn. $30.00 per common share for gross proceeds of approximately Cdn. $50 million.

On July 28, 2010, Laricina completed a private placement of 846,933 common shares and a non-brokered offering of 27,921 common shares, both at a price of Cdn. $30.00 per common share for gross proceeds of approximately Cdn. $26.2 million. The addition of the KIC private placement financing increases the total gross proceeds raised to Cdn. $76.2 million.

Both private placement offerings were completed on a brokered basis with a syndicate of agents co-led by Peters & Co. Limited and RBC Capital Markets.

Macquarie Capital Markets Canada Ltd. acted as financial advisor to KIC.”

Source: Laricina Press Release

The Sovereign Wealth Fund Institute, Inc. is launching a free news service that covers many aspects of finance, investments, and capital markets called GFinanceNews™.  GFinanceNews™ is a breathtaking source on investment, finance, and security news.  We cover investment banking, fund management, real estate, private equity, hedge funds, corporate, and pension news and events.

Visit Gfinancenews.com

According to Reuters, “Hassad Food, owned by Qatar’s sovereign wealth fund, plans to acquire a sugar project in Brazil with a capacity to produce 25 million tonnes per annum, state-run Qatar News agency said, citing the firm’s chairman.

Qatar, like other Gulf states, imports the majority of its food requirements, and securing future food supplies is seen as a priority by the government.

The acquisition in Brazil is expected to take place in two months time, Nasser al-Hajri told QNA, giving no further details of the project.

Around 70 percent of the sugar is planned to be shipped to Qatar for domestic use, while the remaining 30 percent will be used to produce bio-fuels, QNA said.”

Source: Reuters

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According to Reuters, “Korea Investment Corp (KIC), South Korea’s $35 billion sovereign wealth fund, plans in the next five years to double the proportion of its funds in private market investments such as distressed debt and real estate to 20 percent.

“Right now is the time to go into private markets,” Scott Kalb, KIC’s chief investment officer, said at a speech in Seoul Tuesday. “Risk premiums on illiquid investments are becoming attractive.”

KIC invests wholly outside the country. It has generated a return of 11.5 percent as of July 30 since it was established about five years ago from funds given to it by the government and central bank.  As of June the fund had 10 percent of its investments in private market investments, versus 49 percent in bonds and 41 percent in stocks. Kalb expects the fund’s assets under management to grow between $5 billion and $10 billion annually.  Kalb did not see the time as right to invest in leveraged buyout or venture capital funds and was sceptical of further rallies in bond markets with interest rates near record lows.

“If I were a bond manager I would retire today,” he said. “We expect lower returns for fixed income and equities over the next few years as the financial system undergoes repair.”

Kalb joined Korea Investment Corp. in April 2009 after working for Black Arrow Capital Management, Tudor Investment Corp. and Citigroup.”"

Source: Reuters

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According to the press release, “Temasek Holdings (Private) Limited (“Temasek”) is pleased to confirm the following changes in its leadership team.  Mr Hsieh Fu Hua has joined Temasek as Executive Director and President with effect from 1 August 2010, and Mr Dilhan Pillay Sandrasegara will join Temasek as Head, Portfolio Management with effect from 1 September 2010.  Currently Executive Director, Mr Simon Israel will assume the role of Executive Director and President, while Mr Gregory Curl will join Temasek as President. Both appointments will take effect from 1 September 2010. Hsieh Fu Hua, Simon Israel and Greg Curl will work in close partnership with Temasek CEO Ho Ching to support the Temasek senior leadership team to build a sustainable institution that creates and delivers long term shareholder value.

Hsieh Fu Hua, 60, oversees Temasek’s institutional and capacity building initiatives, including the company’s platform for leadership and talent development, as well as risk management.

Simon Israel, 57, provides leadership in building and enhancing value creation in Temasek’s Singapore investments, as well as oversees its engagement with Australia and New Zealand markets, in his concurrent role as Head Singapore and Head Australia/New Zealand.

Greg Curl, 62, will oversee Temasek’s interests in financial services, and support its strategic engagement in the Americas. Greg retired from Bank of America in March this year, where he was credited to be “a principal architect of one of the world’s premier financial services franchises”, and brings with him 34 years of banking and international M&A experience.

In addition to his role as Head of Portfolio Management, Dilhan Pillay, 47, will also take on the role of co-Head Singapore to support Simon Israel along with the senior leadership team.

Ms Ho Ching, Executive Director & CEO of Temasek Holdings said, “I have been very privileged to have the opportunity to work with a highly committed and driven team with diverse backgrounds, experience and capabilities. Along with Simon and other members of our senior team, Fu Hua, Greg and Dilhan will add tremendous depth to our bench strength, as we continue to forge a partnership culture with an ownership mindset, and further hone our capabilities as an investment house.””

Read more: Temasek Holdings

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According to Reuters, “The British government is selling “High Speed 1,” which has a 30-year concession to run a 110 kilometre (70 mile) railway linking London and the Channel Tunnel, to help cut its budget deficit. People familiar with the matter have previously told Reuters it could fetch 1.5 billion pounds.

The “GB Speedrail” group, already consisting of Eurotunnel, Goldman Sachs Infrastructure Partners and M&G’s Infracapital, has been joined by two financial backers, Britain’s Universities Superannuation Scheme, and France’s Caisse des Dépôts et Consignations, a spokesman for the group said.

“We will make an indicative bid today,” the spokesman said.

The five-strong group is vying with at least two rival teams.

One is made up of Morgan Stanley Infrastructure, 3i Infrastructure Plc and Abu Dhabi Investment Authority (ADIA). A second, Canadian partnership has allied Borealis, the infrastructure investment arm of Ontario Municipal Employees Retirement System (OMERS), with Ontario Teachers’ Pension Plan (OTPP).”

Read more: Reuters

General Motors needs to drive up excitement on its upcoming IPO. They are seeking cornerstone investors to shore up demand for the deal which is a common practice.  SWFs are financing sources for many corporations whether it’s a follow-on, PIPE or IPO.  The last IPO that a significant number of large SWFs participated in was Beijing based Agricultural Bank of China IPO.  The Agricultural Bank of China was the last of the big four Chinese state-owned banks to go public.  The total deal value was around US$ 22.1 billion, making it the biggest IPO ever, another milestone of the growth of the Chinese economy. The IPO of GM is expected to raise between US$15 – 20 billion in capital.

Why would a sovereign wealth fund want to participate in the GM IPO? [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

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According to a press release, “Temasek Life Science Ventures Pte Ltd (TLV) and Emergent BioSolutions Inc. today announced their agreement to form EPIC BIO Pte Ltd, a joint venture to develop, manufacture, and commercialize a multivalent, cross-protective human vaccine to protect against influenza caused by a broad range of circulating H5 influenza strains. The broad spectrum pandemic flu vaccine is expected to be based on multiple antigens held by TLV and to be delivered as a single vaccine using Emergent’s MVAtor^TM vaccine delivery platform. Completion of this joint venture is expected in the next few weeks.”

Read more: Emergent Biosolutions Press Press Release

Now that AIG failed to sell American International Assurance (AIA) to UK’s Prudential, it is now planning a possible IPO for the Asian insurance unit. Granted sovereign wealth funds have said they are cautious of investing in financial institutions, this seems like a plausible deal. Insurance is a different business, where premiums correlate to stable cash flow, especially in a growing region like Asia.[Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

According to the Wall Street Journal, “Central Huijin Investment Ltd., the domestic-investment arm of China’s sovereign-wealth fund, will sell its first batch of bonds as soon as this month and aims to issue up to 187.5 billion yuan ($27.7 billion) of bonds by 2011 to help maintain its stakes in large state-controlled banks, a person familiar with the situation said Tuesday. The debt issue comes as Central Huijin faces increasing financing pressure in its efforts to maintain its controlling stakes in major domestic banks, which have been gearing up for share offerings and convertible-bond sales in recent months to boost their capital after a sharp increase in lending last year—the key platform of China’s stimulus measures—eroded their capital.”

Read more: Wall Street Journal

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According to Bloomberg, “Chicago drivers will pay a Morgan Stanley-led partnership at least $11.6 billion to park at city meters over the next 75 years, 10 times what Mayor Richard Daley got when he leased the system to investors in 2008.

Morgan Stanley, Abu Dhabi Investment Authority and Allianz Capital Partners may earn a profit of $9.58 billion before interest, taxes and depreciation, according to documents for a $500 million private note sale by their Chicago Parking Meters LLC venture. That is equivalent to 80 cents per dollar of projected revenue. Standard Parking Corp., which runs 30,000 spaces at the city’s O’Hare and Midway airports, earned 4.84 cents on that basis last year, data compiled by Bloomberg show.”

Read more: Bloomberg

According to the Rio Tinto press release, “Rio Tinto has received a binding offer from funds affiliated with Apollo Global Management, L.P. (Apollo) and the Fonds Stratégique d’Investissement (FSI) to buy a 61 per cent stake in Alcan Engineered Products (AEP), excluding the Cable Division. The transaction follows the successful divestment last year of the Composites division of the Engineered Products business. The terms of the transaction are confidential.

Under the terms of the transaction, Apollo would become the majority and managing shareholder in AEP with a 51 per cent stake in a new holding company for AEP, with the FSI holding 10 per cent. Rio Tinto would hold a 39 per cent stake.  Rio Tinto will respond to this binding offer following consultation with the relevant employee representatives.

Guy Elliott, Chief Financial Officer, Rio Tinto, said: “This potential sale of a majority stake to Apollo and FSI is in line with our strategy of divesting non-core assets of Rio Tinto Alcan. When this transaction is completed, we will have exited all downstream businesses, except Alcan Cable. We look forward to participating in the upside potential of AEP, both as a minority shareholder and key supplier to the business.”"

Read more: Rio Tinto Press Release

It was a deal of the decade, when the CIC piled cash into the ailing investment bank Morgan Stanley. Now the CIC is slowly selling shares as its investment’s stock price rebounded from the trenches, especially after the failed Morgan Stanley deal with Mitsubishi UFJ. The China Investment Corporation is always looking for the next greatest long term deal; in fact they have a whole unit dedicated for special investments.

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According to Reuters, “Singapore’s biggest sovereign wealth fund GIC has chosen UBS, China International Capital Corp (CICC) and Singapore’s DBS as joint bookrunners for its upcoming logistics unit IPO, two sources familiar with the deal said.

The initial public offering is likely to raise $2-$3 billion, much higher than earlier estimated, said the sources who declined to be named because the deal has not been made public yet.

These banks will join JPMorgan and Citigroup, which were first chosen as joint global coordinators, they said.

UBS and DBS declined to comment and CICC was not immediately available for comment. GIC also declined to comment.”

Source: Reuters

According to the press release, “ArcelorMittal executive Jean-Yves Gilet has been chosen to head France’s state-backed FSI investment fund, the Economy Ministry and state bank Caisse des Depots said in a joint statement on Tuesday.

Gilet will take the reins in September and replace outgoing Chief Executive Gilles Michel, who announced in June he was leaving for minerals company Imerys, the statement said. The FSI, 49 percent owned by Caisse des Depots and 51 percent by the government, was created in 2008 to protect so-called “strategic” French companies from the economic crisis.

Since then, the fund has bought stakes in companies including video games maker Ubisoft, dairy group Danone, entertainment conglomerate Vivendi and catering company Sodexo”

Read more: Reuters

According to the press release, “Khazanah Nasional Berhad (“Khazanah”) is pleased to announce that it has today issued a 5-year and a 10-year sukuk (“Khazanah SGD Sukuk”) for SGD1.5 billion (RM3.6 billion).

The Khazanah SGD Sukuk recorded several milestones, being the largest and longest termed sukuk issuance in Singapore, the largest SGD issuance by a foreign issuer in Singapore and the first SGD sukuk issuance out of the Malaysia International Islamic Financial Centre (“MIFC”) initiative. The sukuk, at USD1.1 billion equivalent, is also Khazanah’s single largest sukuk issuance to-date.
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According to the CIC report, “From its inception in September, 2007 through the end of 2008, CIC deployed about USD 21 billion into the market. The gradual deployment of capital was appropriate for a new company particularly under the turbulent market conditions. However, as CIC built its capability and the global economic and investment environment started to show signs of recovery, it significantly stepped up its investment activities, making new investments of about USD 58 billion in 2009.

Investment Performance

1 Return on Capital is based on the accounting income of CIC’s global portfolio, and the cash income and cash dividend declared from its domestic portfolio companies. The return rate is calculated based on CIC’s registered capital of USD 200 billion. Under the equity accounting method, accounting income is generally larger than the cash dividend received from the domestic portfolio companies. Since CIC’s domestic investments are for long-term purposes and their disposals are under restriction, CIC believes cash returns to be more appropriate performance metrics for Central Huijin’s domestic financial institution investments.

2 Global Portfolio Return is based on the annual change in the fair market value of CIC’s global investments.”

Pre-Order Today and Save Money.
Release Date: Beginning of September 2010

Save 15% for non-SWFI Subscribers or Save 45% for SWFI Subscribers off the original price of US$ 850 when you Pre-Order before August 31, 2010.

Maintaining intelligence on sovereign wealth fund asset allocation is essential for all fund managers, firms seeking capital, investment advisors, institutional real estate professionals, institutional investors, placement agents, law firms, consultants and other investment professionals.

Our dedicated team of research analysts has contacted funds, governments, fund managers, and other industry professionals from around the world. We do this to ensure the information held in this year’s publication is comprehensive, relevant, and up to date.

Some topics covered include:

• 2010 & 2011 Asset Allocations of many SWFs
• Expert Commentaries
• Investment Trend Analysis
• Investment Holdings Analysis
• Future Asset Allocation Strategies
• Plus more…

According to the press release, “Cerenis Therapeutics SA (Cerenis), a biopharmaceutical company specializing in the research and development of novel therapies based on the metabolism of HDL (the “good” cholesterol) to treat cardiovascular and other metabolic diseases, announced today it has raised €40 million in the first close of its series C financing.

In this round €20 million came from the Fund for Strategic Investment (FSI) with an additional €20 million coming from the existing investors: Sofinnova Partners, HealthCap, Alta Partners and TVM Capital, EDF Ventures, OrbiMed and DAIWA Corporate Investment. This third round of financing for Cerenis (Series C) will fund Phase II development of the lead Cerenis program, CER-001, an HDL-mimetic for the treatment of cardiovascular disease and to support the development of other new HDL therapies.

This round of financing brings the total capital raised to date by the company to €107 million. Jean-Louis Dasseux, co-founder and CEO of Cerenis said: “We welcome the FSI as a new investor and are very pleased to have such strong support from our current investors. This support recognizes the progress made to date in the development of Cerenis in the field of HDL, the promise of the pipeline of products, and the quality of Cerenis’ team.”"

Read more: Press Release

Tony Tan

According to Bloomberg, “The global rebound is “fragile” and shocks could push the world toward another recession, according to Government of Singapore Investment Corp., manager of more than $100 billion of the nation’s foreign reserves.

Risks to the global recovery have increased due to Europe’s debt turmoil, continued deleveraging in the U.S. and protectionist pressures, Tony Tan, deputy chairman of GIC, said in a speech in Singapore today. The fund is ranked the world’s sixth-largest state investment company by Sovereign Wealth Fund Institute in California.

“The economic recovery, while real, is fragile and there is a risk that negative shocks could push the global economy towards a recession sooner than expected,” Tan said. “The strong rebound in global industrial production is peaking while monetary and fiscal policies, particularly in the larger emerging economies, are being normalized.””

Read more: Bloomberg

According to the Kuwait News Agency, “Kuwait and Brazil agreed on establishment of a joint investment company, said Board Member of Kuwait Chamber of Commerce and Industry (KCCI) Sayer Al-Sayer here.

Al-Sayer said late on Saturday, after a banquet held by Brazil’s President in the honor of His Highness the Prime Minister of Kuwait Sheikh Nasser Al-Mohammad Al-Sabah, that the two countries agreed on preparing “an initial study for the establishment of the company.” He said the aim of the company will be to boost economic relations between Kuwait and Brazil, adding that it would also have positive effect on trade exchange between Kuwait and Brazil. Brazil is rich in oil, agricultural resources and livestock, he pointed out, noting that the country is due to host several crucial international events, namely international Olympic games and the World Soccer Cup — events that will contribute to reviving the national economy and impact in particular on the private sector, he noted.

The two countries will form a joint committee to prepare studies on the issue, he said, alluding to the accord. As part of His Highness the Prime Minister’s tour in Latin America, th KCCI is seeking to stress economic ties with the regional counties. Al-Sayer is heading KCCI’s delegation accompanying His Highness the Prime Minister.”

Read more: KUNA Press Release

China’s sovereign wealth fund is set to post its best yearly gain in 2009 after stepping up investments in commodities to ride a rebound in global markets.

China Investment Corp. is likely to report a return on its global portfolio “well over 10 percent” in its upcoming annual statement, said Rachel Ziemba, London-based senior analyst at Roubini Global Economics. The $300 billion fund had a 2.1 percent loss on its global assets in 2008, after chalking up a 0.2 percent return in its starting year of 2007 when the value of a $3 billion investment in Blackstone Group LP plunged.

Chairman Lou Jiwei pumped nearly $10 billion into commodity-related companies such as Canada’s Teck Resources Ltd. in the second half to benefit from the global economic recovery. That compared with $4.8 billion in new investments across all industries for the entire 2008.

“2009 results should be good because commodities staged a strong rally,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “CIC was very timid, which actually helped it to avoid the financial tsunami” in 2008.

We have all witnessed the trend of some sovereign wealth funds raising private capital or creating sovereign wealth enterprises to act as an investment manager for private funds.  This article is to bring some clarity on why a number of funds are doing this.  With Mubadala raising $1.85 billion in medium term notes, Temasek Holdings multiple debt raises in denominated in multiple currencies, and Mumtalakat Holdings bond offering, it shows that SWFs are using their assets, not just their cash as an investment.

First off, most SWFs that are raising capital are the types of sovereign wealth funds that take large stakes in companies.  In addition, SWFs that hold large portions of their domestic industry would be the type of funds to engage in this behavior.  We most likely would not see the Abu Dhabi Investment Authority or the Norwegian GPFG raise capital or take on bank loans.  In some instances, SWFs experience shrinkage of money flows from their respective government; money in the private markets backed by SWF assets can increase their stability and investment performance.[Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

Tony Day

Tony Day, a leader helping shape the Australian Future Fund’s investment strategy is finishing up his time at the sovereign wealth fund.  He was initially hired to assist building the fund’s investment capability.  The Future Fund recently is involved in a myriad of different asset classes. 
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According to the press release, “Goodrich Corporation (NYSE: GR) and Mubadala Aerospace, a business unit of Mubadala Development Company, today signed a heads of agreement (HOA) to establish a joint venture company in the United Arab Emirates (UAE) to perform maintenance, repair and overhaul (MRO) work on landing gear. The joint venture company would be the Middle East’s first dedicated landing gear service provider once fully operational in 2012. The joint venture is subject to negotiation and execution of the definitive joint venture agreement.

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According to Reuters, “Singapore state investor Temasek Holdings is selling 700 million pounds ($1.1 billion) worth of bonds to diversify its funding sources as it makes its foray into the sterling-denominated debt market.

Temasek will issue 200 million pounds of 12-year debt at 97 to 100 basis points above gilts and 500 million pounds of 30 year at 92 to 95 basis points above gilts, according to a term sheet seen by Reuters.

“Neither size will change,” according to the term sheet that was distributed to potential investors.

The Temasek bonds, rated AAA by both Moody’s and Standard & Poor’s, will be priced before the end of London trading, said a source briefed on the issue.

Sources with knowledge of the deal said the Temasek fundraising was not linked to any investment in BP Plc or another British firm.”"

Read more: Reuters

Sovereign Wealth Quarterly Q2 Y 2010 will be shipped out to subscribers this Friday.

If you are not a subscriber, now is your chance to subscribe.

According to the press release, “Abu Dhabi Aircraft Technologies (ADAT) and Sikorsky Aerospace Services today announced the launch of a joint venture to provide world class military aviation Maintenance, Repair and Overhaul (MRO) services to the United Arab Emirates (UAE) Armed Forces and other military operators internationally, including in the wider Middle East and North Africa region.

ADAT is wholly owned by Mubadala Development Company, the strategic investment arm of the Abu Dhabi Government, in the United Arab Emirates. Sikorsky Aerospace Services is the aftermarket business of Sikorsky Aircraft Corp., a subsidiary of United Technologies Corp. (NYSE: UTX).

The joint venture, known as AMMROC (Advanced Military Maintenance, Repair and Overhaul Center), brings together ADAT’s military track record of high quality and reliable maintenance services, and Sikorsky Aerospace Services’ Original Equipment Manufacturer (OEM) expertise.

With the combined strength of the joint venture parties and an aggregate investment that exceeds US$800 million, AMMROC will draw on decades of experience and expertise in aerospace engineering, material support, logistics, maintenance, component repair, overhaul and training to deliver a fully integrated MRO support program by a single provider. This will enable AMMROC to provide innovative platform solutions for all fixed and rotary wing aircraft, to ensure guaranteed aircraft readiness, deployability, improved safety and self reliance.

Read more: Press Release

According to the CIC press release, “CIC recently appointed Mr. John Mack and Mr. Joseph Yam as members of its International Advisory Council (“the Council”), to serve a term of two years. Meanwhile Mr. Arminio Fraga and Mr. Lawrence Lau resigned from the Council due to personal reason or concern on potential conflict of interest in business.

Mr. John Mack is Chairman and former CEO of Morgan Stanley; Mr. Joseph Yam is Executive Vice President of the China Society for Finance and Banking, and former Chief Executive of the Hong Kong Monetary Authority.”

Source: China Investment Corporation Press Release

By Alexia Tye

Gilles Michel, the CEO of the FSI, will shortly step down to take up a new position in the private sector.   He looks back over what the FSI has accomplished in the short period since its creation in January 2009.

Defending what may seem to be a premature departure, he feels that since he set up the FSI under the orders of the President of the Republic – the fund was then literally himself and a mobile phone – the fund is solidly in place and has achieved much.  With a team of 30 (11 professionals plus mostly state-appointed senior management), 110 investments have been executed, and the FSI has found a firm footing in the French economic landscape.

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Alexia Tye is a Partner at AddVenture, a private equity advisory firm.

According to Emirates Business 24/7, “Mubadala Development Company and Pramerica Real Estate Investors, a unit of US-based Prudential Financial, have agreed to set up a company that will raise capital to fund and invest in real estate projects in Abu Dhabi and other international markets.

Mubadala Pramerica Real Estate Investors (Mubadala Pramerica REI), the joint venture, will be owned equally by the two companies and will be headquartered in Abu Dhabi.

“The joint venture will become operational soon, but we are not in a position to specify a date,” a Mubadala spokesperson told Emirates Business.

In a press statement, Waleed Al Muhairi, Chief Operating Officer for Mubadala, said: “By partnering with Pramerica, we’re bringing together one of the world’s leading real estate investment companies with our regional market expertise and knowledge. This is a compelling prospect for investors that want to participate in the current and future growth of the region.”

The joint venture, according to the spokesperson, will only raise capital to fund and invest in real estate projects and will not develop, or act as a developer of real estate projects.

“The JV will be contracting with real estate developers to build and develop the real estate projects it will invest into.”

Mubadala has already set up two other joint ventures for development purposes.”

Emirates Business 24/7

According to Reuters, “Nigeria plans to fast track the creation of a sovereign wealth fund after powerful state governors, who initially opposed the idea, softened their stance, Central Bank Governor Lamido Sanusi said on Tuesday.

A committee of three ministers and six governors had been set up to work out the legal framework for a “quick take-off” of the fund, Sanusi told reporters after a meeting of the National Economic Council in Abuja.

“We are now moving to the implementation stage,” Sanusi said, adding the committee would work out how much of the fund would be earmarked for savings, infrastructure finance and a stabilisation fund, as well as where the money would come from.

Finance Minister Olusegun Aganga, an ex-Goldman Sachs executive appointed in March, has said he wants the fund to replace the current system whereby Nigeria saves oil revenue above a benchmark price into an excess crude account (ECA).”

Read more: Reuters

Blackstone bought GSO Capital Partners LP in March 2008. One of the sovereign wealth funds participating is reported to be the Korea Investment Corporation.

According to the press release, “GSO Capital Partners LP, the credit business of The Blackstone Group, today announced the final closing of the Blackstone / GSO Capital Solutions Fund (“the Fund”) with total commitments of over $3.25 billion. The Fund’s strategy is focused on providing privately negotiated “capital solutions” to companies in need of liquidity or significant capital structure transformation due to pending covenant violations, debt maturities, cyclical downturns in their businesses or other funding requirements. The strategy leverages GSO Capital Partners’ distressed, credit and trading expertise, along with its unique deal origination capabilities. Thus far, the Fund has invested approximately $600 million in seven different companies. Bennett Goodman, Senior Managing Director of The Blackstone Group and Co-Founder of GSO Capital Partners said, “There are many great business franchises facing liquidity issues. We’re delighted to have raised a new fund of this magnitude to assist mid-market companies with their financing needs.”

Investors in the Fund include a diverse group of domestic and international pension funds, sovereign wealth funds, endowments, foundations and family offices.”

Source: The Blackstone Group Press Release

According to Businessweek, “Qatari Diar Real Estate Investment Co. plans to raise $3.5 billion in a bond sale, the Financial Times reported. Qatari Diar, the property arm of Qatar’s sovereign wealth fund, is expected to launch a roadshow for the sale in London as early as tomorrow, the FT said.

Qatar Diar Finance, the unit issuing the bond, was rated Aa2 by Moody’s Investors Service, which also gave a provisional rating of Aa2 to the proposed bonds, the newspaper said.”

Read more: Businessweek

According to the press release, “Temasek Holdings (Private) Limited (Temasek) today released its annual performance report and institutional review, Temasek Report 2010 – Making a Difference, for financial year ended 31 March 2010. Temasek Report 2010 sets out highlights of the firm’s portfolio returns and investments, its consolidated group financial summary and institutional framework as well as its engagement with stakeholders, including the wider community.

Delivering Long Term Returns

The market value of Temasek’s portfolio as at 31 March 2010 rebounded to a new financial year-end high of S$186 billion. This is an increase of S$56 billion from a year earlier, with a Total Shareholder Return of over 42% for the year.

The book value of the Temasek portfolio increased to S$150 billion, up from S$50 billion 10 years ago, underpinned by the secular growth of its portfolio companies and Temasek’s own investment activities.

Total Shareholder Return (TSR), measuring returns on an annually compounded basis since inception, was 17% by market value, and 16% by shareholder funds. Both 20-year and 30-year TSRs held steady at a creditable 16% by market value and 14% by shareholder funds.

Medium-term five-year TSR was relatively robust at 11% by market value and 14% by shareholder funds, while 10-year TSR compounded annually from the peak of the dotcom bubble, was 6% by market value and 12% by shareholder funds.

Also known as Wealth Added or Economic Profit, total portfolio returns to the shareholder, net of a risk-adjusted hurdle, was S$42 billion for the year, while group net profit was S$5 billion, with lower profit contributions from some of the portfolio companies which were impacted by the global financial crisis.

Temasek closed the financial year on 31 March 2010 with a comfortable net cash position.

Mr S Dhanabalan, Chairman of Temasek Holdings said, “Since inception, Temasek has been committed to create and deliver sustainable value as an active investor and shareholder of successful enterprises.”

“Our portfolio has delivered consistently through market cycles. Long-term TSR by market value held steady at 17% since inception, while both 20- and 30-year TSRs were 16%.””

Read more: Temasek Press Release

According to Gulf News, “Mubadala has retained its position among the world’s top eight most transparent sovereign wealth funds. Mubadala has retained its position among the world’s top eight most transparent sovereign wealth funds

Dubai: The UAE’s Mubadala Development Company has retained its position among the world’s top eight most transparent sovereign wealth funds according to the Linaburg-Maduell Index, the only one of its kind. Ranked from zero to 10, Mubadala has retained its score of 10 in the first quarter of this year on the index, which was developed at the US-based Sovereign Wealth Fund Institute by Carl Linaburg and Michael Maduell.

Mubadala, owned by the Government of Abu Dhabi, does not consider itself a sovereign wealth fund. It manages long-term capital-intensive investments. It has a multi-billion-dollar regional and international portfolio ranging from services to infrastructure to aerospace.

It helps to deliver some of Abu Dhabi’s most high profile and strategically important projects.

“Mubadala has adapted well to our expanding size and profile, introducing a range of policies to ensure our operations maintain their efficiency and transparency,” CEO and Managing Director Khaldoon Khalifa Al Mubarak said in a foreword to the annual report for 2009.”

Read more: Gulf News

As the story unfolds it was reported that BP Plc CEO Tony Hayward made a trip to Abu Dhabi.  BP declined to comment on any activity.  During an interview with Bloomberg, they reported, ” ‘I’m just visiting,’  Hayward said in an interview in Abu Dhabi today. ‘I’m here for a couple of days.’

BP is an international oil company plagued with the Gulf disaster, but many SWFs are looking at a possible investment.  The Kuwait Investment Office, GIC have stakes already in the company. 
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According to Reuters, “The Abu Dhabi Investment Authority (ADIA) is not planning to cut its exposure to debt-ridden Europe, saying a stable regulatory, legal and tax framework make it an attractive place to invest.

“No, (we) maintain a stable view,” Jean-Paul Villain, strategy unit head at ADIA, told Reuters when asked whether the fund was looking to reduce its exposure in the face of Europe’s debt crisis. “These markets are efficient,” he said.

Sovereign funds, which together manage around $3 trillion of assets, are turning aggressive after cutting back their holdings in 2008 at the height of the credit crisis when they lost billions on banks such as UBS and Citigroup.  Speaking to Reuters on the sidelines of the Europlace Financial Forum in Paris, Villain said developed markets still offered attractions.

“The legal framework and tax framework is very stable. If you buy an infrastructure asset in the UK (for example), you have a clear … structure of regulation,” the former BNP Paribas executive said.

ADIA has assets of between $500 billion and $700 billion with investments ranging from Citigroup bonds to a stake in Britain’s Gatwick Airport.  State-owned ADIA invests funds generated by the United Arab Emirates, the world’s third-largest oil exporter, into overseas stocks and bonds as a means of diversifying away from the hydrocarbons sector.”

Read more: Reuters

BP is not a new investment for SWFs, especially Middle Eastern sovereign wealth funds.  Already the Kuwait Investment Authority is a large holder of the security, including many others.  In the past, numerous SWFs have taken small equity positions in BP.  Now with the possibility of a takeover from oil rivals and the need to increase their capital base, SWFs may come to the rescue at the right price and structure.  BP also has the option of selling assets in its oil producing portfolio as well.

According to the AP, “BP may be looking to sovereign wealth funds in the oil-rich Middle East to fend off takeover bids amid mounting costs from the Gulf of Mexico oil leak disaster, according to reports published Sunday.

The National, an Emirati newspaper, cited unnamed “informed sources” in the region saying that Mideast financial institutions have submitted proposals to BP advisers and are waiting for a response. Among the options being considered are the acquisition of key assets or a direct cash injection to help strengthen the oil giant’s balance sheet, according to the English-language paper.

The paper quoted a person it called an informed source as saying that “BP knows there is potential support from the Middle East.”

The National is owned by the government of Abu Dhabi, one of seven emirates that make up the United Arab Emirates federation. The sheikdom hosts the country’s capital and controls nearly all the OPEC member state’s oil reserves.

BP spokeswoman Sheila Williams in London declined to say whether the company had been approached by investors from the region.

“We don’t comment on financial issues,” she said.”

Source: AP

According to the press release, “The AES Corporation (NYSE: AES) and China Investment Corporation (CIC) announced today that their non-binding Letter of Intent for a 35 percent investment in AES Wind Generation, which was signed on November 6, 2009, expired as of June 30, 2010. AES and CIC may resume discussions as additional clarity develops surrounding renewable energy legislation in the U.S.”

Read more: Press Release

According to the AFP, “Agricultural Bank of China on Tuesday confirmed plans to raise a world-record 23.2 billion dollars in a dual initial public offering in Hong Kong and Shanghai.  The last of China’s “big four” state banks to list said it would raise the money if the monster IPO is fully subscribed when it begins on Wednesday.

Major institutional investors including sovereign wealth funds have already expressed strong interest in the IPO, which is on course to surpass the previous record of 22 billion dollars set in 2006 by Industrial and Commercial Bank of China (ICBC).  AgBank said Tuesday that it planned to raise 13.1 billion US dollars from its Hong Kong IPO, with a price range of 2.88-3.48 Hong Kong dollars (37-44 US cents) a share. Xiang Junbo, chairman of AgBank, said government efforts to boost growth in China’s depressed central and western regions would help the rural lender.

“The county area business will be one of our key profit drivers,” he told a press conference in Hong Kong on Tuesday. “(AgBank) is well positioned to capitalise on China’s next wave of growth.”

The bank, which has been criticised for the amount of bad loans on its books, has worked in recent years to chop that figure, Xiang said.

Agbank’s prospectus said its bad debt ratio dropped from 4.32 percent in 2008 to 2.91 percent in 2009.

“The bank has made substantial improvement in the last few years,” Xiang said, referring to its credit review procedures.

The newly released prospectus said AgBank booked a profit of 65 billion yuan (9.56 billion US dollars) in 2009, up from 51.45 billion yuan in 2008. It is forecasting a 2010 profit of 82.9 billion yuan. Xiang also said a stronger yuan — demanded by the United States and other trading nations which claim they have been hurt by an unfairly cheap Chinese currency — could be “positive” for AgBank.”

Read more: AFP

According to the press release, “Norwegian finance minister Sigbjørn Johnsen and Norges Bank’s governor Svein Gjedrem were in attendance on Wednesday when Norges Bank Investment Management (NBIM), manager of the Government Pension Fund Global, opened a new office in Singapore. The office will help NBIM’s existing office in Shanghai to cover the increasingly important Asia region.

Various representatives of the Singapore authorities and local business community, including trade and industry minister Lim Hng Kiang, were also at the opening ceremony.

“An office in Singapore will strengthen our operations in Asia,” commented Gjedrem. “Having a presence in a region with strong economic growth is important for achieving good management results.”

As one of Asia’s foremost financial centres, Singapore offers good investment opportunities and has a well-developed financial infrastructure. Asset management is a major industry in the country, making it possible for NBIM to recruit and retain skilled workers.

“The new office will be a good supplement to the Shanghai office opened in 2007,” commented NBIM’s CEO Yngve Slyngstad.

Sigmund Kyrdalen has been appointed general manager in Singapore. He is a senior portfolio manager at NBIM and managed NBIM’s London office for two years.  The Government Pension Fund Global had a market value of almost 2 800 billion kroner at the end of June. Around 10 percent of the fund is invested in Asia, and around 15 percent of its equity investments are in Asian companies.

Besides Singapore, NBIM has offices in Oslo, London, New York and Shanghai.”

Press Release: NBIM

Direct SWF Investments by Calendar Quarter

Source: SWFTD v2.1 Data in Billions USD

The Sovereign Wealth Fund Transaction Database (SWFTD) is a dedicated database product that tracks sovereign wealth fund transactions from 1986 till present. With over 1,500 recorded transactions in real estate, listed equities (open market purchases or deals), unlisted equities, and other unique acquisitions, we aim to be the most comprehensive source of SWF transactions.

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read more: Sovereign Wealth Fund Transaction Database (SWFTD)

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Martin Skancke

According to the Guardian, “Investors face years of market volatility as governments consolidate their mountains of debt taken on both before and in response to the financial crisis, says the head of Norway’s sovereign wealth fund.

Martin Skancke, director general of the Norwegian Ministry of Finance Asset Management Department and responsible for the country’s sovereign wealth fund, said uncertainty may dominate but the fund’s long-term time horizon gives it the ability to ride out the gut-churning drops and equally fast rises.

“It will take a long time for governments in both Europe and the U.S. to consolidate their balance sheets. I think there will be probably uncertainty about that consolidation process which will give in to market volatility. That is something we are prepared for and can live with,” he said in a recent interview. “It could last a long time,” he added, referring to how governments will handle the aftershock effects of the financial crisis and how that has affected their accumulation of government debt.

On June 7, European Union finance ministers reached an agreement on the details for a 750 billion euro financial safety net for bloc members struggling to convince markets they can deal with high budget deficits and debt. Skancke said the three to five year time frame governments are giving themselves to cleaning up their balances sheets is a signal for continued uncertainty.”

Read more: Guardian

The Sovereign Wealth Fund Institute – Consensus Demand Meter is an innovative indicator to track what sovereign wealth funds are demanding in the next three quarters from that relative start date. For Q2 Y2010 (End of June 2010) going forward three months, this Demand Meter indicates how select asset allocations, sectors, and investment strategies rank.

A score of 10, indicates that this area is attractive for the majority or large portion of SWFs. A score of 1, means that SWFs will most likely try to lower exposure from that sector, allocation or strategy. There are many diverse types of sovereign wealth funds with differing objectives, priorities, and goals. This is purely a consensus indicator derived from our Institute’s research and analysis. Not all strategies, asset allocations, and sectors are included in this indicator.

Our data is gathered through various sources:
Internal sources
Public announcements
Executive investment professionals
Market & economic research

Scott Kalb

According to Reuters, ” Korea Investment Authority, South Korea’s $35-billion sovereign wealth fund, has reduced exposure to euro zone equity and fixed income investments and is now underweight on assets in the region, the fund’s top official said on Thursday.

“We are very worried about what’s going on in Europe. I don’t think the austerity measures (adopted by some of the euro zone countries) will be enough. I think they will have to do some debt rescheduling,” said Scott Kalb, chief investment officer at the sovereign wealth fund known as KIC.

Kalb spoke at a forum sponsored by The Korea Society. Kalb, however, said the fund is not shorting the euro but trimming its investments in the region from what he thought was a substantial exposure. The KIC official said Europe has “an artificial union” with Germany as the principal backer.

“We’re kind of shocked that Germany seems to have stepped away.” Germany came under fire at the height of the Greek debt crisis after it seemed the euro zone’s largest economy was reluctant to bail out Greece.

It did eventually vote to assist Greece and other indebted euro zone nations via a $1-trillion safety net, but not before widespread criticism from other euro zone countries and global investors. More recently, Germany got flak after it announced plans for 80 billion euros in budget cuts over the next four years.”

Read more: Reuters

According to the AFP, “Agricultural Bank of China’s initial public offering, set to be the world’s largest, has drawn 11 heavyweight investors who have stumped up 5.45 billion US dollars for the sale, a report said Thursday.

Shares in the company’s Hong Kong listing will be set between 2.88 and 3.48 Hong Kong dollars (37 and 44 US cents) ahead of their trading debut next month, Dow Jones Newswires said, citing a company prospectus.

A price range has not been revealed for the Shanghai portion of the listing.

The details came as AgBank — the last of China’s big four lenders to list its shares — kicked off an investor roadshow to drum up support for a sale that could draw almost 25 billion US dollars.

That would surpass the Industrial and Commercial Bank of China’s 22-billion-dollar IPO in 2006, which is currently the world’s biggest.

Gulf state investment funds Qatar Investment Authority and the Kuwait Investment Authority, US food giant Archer Daniels Midland, Australia’s media-to-heavy-equipment firm Seven Group Holdings, British Bank Standard Chartered and Dutch financial-services firm Rabobank are among the cornerstone investors, Dow Jones said.

The sale’s other major investors are: Singapore state investment company Temasek Holdings, United Overseas Bank, Hong Kong billionaire Li Ka-shing’s Cheung Kong (Holdings), tourism monopoly China Travel Services Group and state-run consumer group China Resources (Holdings).”

Source: AFP

According to the Wall Street Journal, “Offers for Bahrain Mumtalakat Holding Co.’s first-ever bond issue are in the range of $1 billion to $1.25 billion, according to a source familiar with the sale.

That means the sovereign wealth entity’s debut could be larger than the minimum $500 million benchmark size when it completes on Wednesday. Deutsche Bank, HSBC, JPMorgan and Standard Chartered are leading the sale.

The five-year senior unsecured bonds, rated A by Standard & Poor’s and A from Fitch Ratings, are expected to yield 300 basis points over mid-swaps. Proceeds will be used for general corporate purposes, including to refinance existing debt.

The Kingdom of Bahrain, which owns Mumtalakat outright, issued $1.25 billion in 5.5% bonds on March 24 via JPMorgan, Deutsche Bank and BNP Paribas, according to Dealogic.  In a note on June 21, Standard & Poor’s said there is an “almost certain likelihood that the government of Bahrain would provide timely and sufficient extraordinary support to Mumtalakat in the event of financial distress,” although it does not formally guarantee its liabilities.

Mumtalakat does not make material investment decisions without government consent, S&P added. Most of the company’s assets are in domestic real-estate, telecommunications, aviation, banking and manufacturing. Bahrain owns a separate holding company for oil and gas assets, the National Oil and Gas Authority.  The issuer’s decision to tap the capital markets for the first time was predicated on the Mumtalakat’s need to become more independent from Bahrain, said the source.

“In the wake of the Dubai World issues, Bahrain is trying to push these sovereign entities away from its balance sheet and would like them to fund themselves on their own,” the person said.”

Source: Wall Street Journal

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According to the Wall Street Journal, “The Brazilian sovereign wealth fund will buy 66.5 million shares to be offered by state-run Banco do Brasil SA, Latin America’s biggest bank by assets, through bank’s primary and secondary offering of shares on the Sao Paulo Stock Exchange, BMFBovespa.

Banco do Brasil said, in a statement late Wednesday, that Brazil’s sovereign wealth fund, Fundo Soberano do Brasil, will acquire its shares via a special fund known as FFIE.

Earlier this month, Banco do Brasil said it will offer a total of 356.85 million shares, with 286 million shares through a primary offering and 70.8 million shares via a secondary offer.  The operation could raise about 9.77 billion reais ($5.46 billion) based on Banco do Brasil’s closing price of BRL27.39 on Wednesday.

Investors can reserve shares from June 21 through June 29. Trading is expected to begin July 2.  With the acquisition of shares to be made by the sovereign wealth fund, the federal government will keep its control on Banco do Brasil.

Brazil created the sovereign wealth fund in late 2007 with the aim of reinforcing public sector savings and funding projects of strategic interest abroad.”

Read more: Wall Street Journal

According to Reuters, “The Qatar Investment Authority, the Gulf country’s sovereign wealth fund, agreed to invest $2.8 billion in Agricultural Bank of China Ltd.’s initial public offering to tap growth in the world’s third-biggest economy.

The $58 billion fund signed an agreement with Agricultural Bank on June 17, two people with knowledge of the matter said, declining to be identified because the deal is private. The bank has allocated more than $5 billion for corporate investors such as QIA in the Hong Kong part of its IPO, the people said.

Agricultural Bank, China’s largest lender by number of customers, is seeking to raise as much as $15 billion in the Hong Kong part of what may be the world’s largest IPO, according to an e-mail sent to investors last week. The Beijing-based lender may sell as much as $28 billion of stock in Hong Kong and Shanghai combined, exceeding the $22 billion sale by Industrial & Commercial Bank of China Ltd. in 2006.”

Read more: Reuters

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According to the NY Times, “A company here that is partly owned by the Chinese government has quietly purchased a 5.1 percent stake in the only American-owned provider of enriched uranium for use in civilian nuclear reactors. The company that bought the stake, the Noble Group, is the world’s second-largest commodities trading and logistics company after Cargill and is based here. One of its minority owners is the Chinese government’s sovereign wealth fund.

The American company is USEC, which is based in Bethesda, Md., and enriches uranium so that fission can occur in nuclear reactors. It currently supplies enriched uranium for use in the United States, Japan, South Korea and Taiwan. Noble said in a filing with the Securities and Exchange Commission that it had purchased the shares on the open market from May 25 to June 2.

Read more;: NY Times

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Sidenote: More Sovereign Entities are raising debt capital, leverage:  We have seen this also with Mubadala, Temasek, and many other Gulf Sovereign Vehicles.

Qatari Diar, a property arm of Qatar’s sovereign wealth fund, will issue a $3.5 billion bond denominated in dollars in the coming weeks with five and 10-year maturities, a source close to the matter said on Tuesday. The issue will come through a syndicate of local and international banks including HSBC, Barclays Capital, Standard Chartered and QNB Capital, the investment banking unit of Qatar National Bank, the source said.

Qatari Diar, which counts London’s Chelsea Barracks among its most high-profile overseas assets, holds a 45 percent stake in Qatar’s Barwa Real Estate company.

Qatar issued 10 billion riyals ($2.75 billion) worth of eight-year conventional and Islamic bonds with a coupon of 6.5 percent to local banks earlier in June.

Read more: Reuters

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According to Reuters, “Singapore’s state investment fund Temasek plans to invest up to $300 million in the Agricultural Bank of China, ahead of its roughly $20 billion IPO, a source with direct knowledge of the matter said on Saturday. Temasek’s commitment to China’s third largest bank is a positive step for the offering, though it is less than the $1 billion that AgBank’s underwriters are hoping to get from Middle East and Asian sovereign wealth fund cornerstone investors.

So-called cornerstone investors are a key layer of financial backing for an IPO. AgBank’s Shanghai-Hong Kong listing will be the world’s largest ever IPO if it exceeds $21.9 billion. Temasek declined to comment. AgBank could not immediately be reached. The source was not authorized to speak on the record about the deal.

Reuters earlier reported that Temasek, and sovereign funds from Kuwait and Qatar were expected to sign on to AgBank’s offering.

The Beijing-based bank, founded in 1951 by Mao Zedong as the rural unit of the central bank, is still known a customer base spread across China’s far-flung parts, though it does a have a major presence of most of the country’s major cities.”

Read more: Reuters

Central Huijin, part of the China Investment Corporation has a large stake in the Agricultural Bank of China.

Learn more about past direct SWF transactions: Sovereign Wealth Fund Transaction Database (SWFTD).

According to Businessweek, ” ‘I’ve been criticized as an optimist,”’said Echeverry, who headed the government’s National Planning Department, responsible for broad economic policy, from 2000 to 2002 under former President Andres Pastrana. “Six percent growth is ambitious but with the oil and coal bonanza, housing growth, agriculture and infrastructure, it’s possible.”

Echeverry said royalties from oil sales worth as much as 1 percent of GDP would be saved in the sovereign wealth fund by 2014 as part of Santos’s deficit reduction plan. Santos would favor a stabilization fund under which excess mining revenue would be used to offset lower revenue from slower economic growth.

Echeverry said Santos’s economic strategy would avoid the risk of “Dutch disease” as the economy would be balanced between mining, agriculture and service and manufacturing industries. Dutch disease is a sudden surge of wealth that ultimately hampers expansion. The term was first applied to a surge in income from new natural-gas fields in the Netherlands during the 1960s.”

Read more: Businessweek

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According to the press release, “HRH Prince Alwaleed bin Talal bin Abdulaziz Al Saud, Chairman of Kingdom Holding Company (KHC) received, and held a meeting with HE Khaldoon Al Mubarak, CEO of Mubadala Development Company (MDC) at HRH’s office in Riyadh. The meeting was attended by a delegation from KHC, Rotana and Mubadala Development Company.

On the agenda of discussions during the meeting between HRH and Mr. Al Mubarak, were His Highness’s solid regional presence in the various sectors, including real estate, hotels and media. Moreover, the meeting touched upon local, regional and international economic and investment issues, and future potential business collaboration. After the meeting the Prince hosted a dinner in honor of his guest and the accompanying delegation at Kingdom Resort.

Prince Alwaleed’s investments in the UAE through Kingdom Holding Company consist of Citigroup in the financial and in the hotel sector through the management of two Fairmont hotels, and four Movenpick hotels.”

Read more: Press Release

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According to Market Watch, “a senior official with China’s massive sovereign-wealth fund said Tuesday that while 2009 was good for the nation’s market investments, this year is proving to be tough, according to reports.

In rare public comments, China Investment Corp.’s Executive Vice President Jesse Wang said recent corrections in Western markets had peeled off one-tenth of the fund’s value.

“In May and June, because of the decline of the U.S. market and European market, we had about 10% mark-to-market losses,” Wang was quoted as saying at an event hosted by the Federal Reserve Bank of San Francisco.

The recent drop compared to gains for 2009, which Wang called “a good year for us,” as CIC managed a return of 11% overall and more than 17% if results from its domestic arm Central Huijin Investment Ltd. are excluded, according to Reuters.

Official 2009 results for CIC, which has approximately $300 billion under management, are slated for release sometime in the next two months.

Wang said that while CIC had hope bonds and other fixed-income holdings would shield it from volatility, this portfolio was hit by the euro’s fall against other major currencies, according to Dow Jones Newswires.

Read more: Marketwatch

According to the press release, “The Alaska Permanent Fund Board of Trustees approved new Board Charters and a Governance Policy, as well as an updated Investment Policy at its regular meeting on Wednesday and Thursday. The new documents incorporate a number of existing policies and charters into two streamlined documents that will hold all of the related information together.

“In the past we had a handful of resolutions that addressed the management of each of our asset classes and were separate from the manual on how we invested. We also had separate board charters, as well as governance procedures that were not codified in writing,” said Board Chair Steve Frank. “By pulling together these two documents, it will make our policies and procedures more transparent, and provide a great deal of benefit to incoming Trustees.”

For the most part, the new policies do not represent significant changes from past practices. However, the updated investment policy does delegate the Board’s authority to authorize the hiring and firing of managers to staff.

“This change makes sense and is in line with how similar funds operate,” said Frank. “The Board must first authorize a manager search, but then we leave the hiring of managers to the staff that have the time to conduct due diligence visits and comb through performance data.”

In addition to approving the new policy documents, the Board also took the following actions:

• Approved a $600 million commitment to private equity investments for Fiscal Year 2011 as well as authorizing use of the remaining $250 from the Fiscal Year 2010 commitment in the coming year.
• Approved the APFC’s Fiscal Year 2011 budget as authorized by the Legislature, and authorized changes within the Fiscal Year 2010 budget for the remainder of the current fiscal year.”

Read more: APFC Press Release

According to the press release, “Penn West Energy Trust (“Penn West”) is announcing the closing of the previously announced joint venture partnership (the “Partnership”) with an affiliate of China Investment Corporation (“CIC”). The Partnership has been formed to develop Penn West’s bitumen assets located in the Peace River area of northern Alberta (the “Assets”). Penn West contributed the Assets valued at approximately $1.8 billion to the Partnership and has retained a 55% interest in the Partnership. CIC has acquired a 45% interest in the Partnership by investing approximately $312 million in the Partnership (which has been paid to Penn West by the Partnership to satisfy outstanding indebtedness to Penn West) and committing to carry a portion of Penn West’s share of the Partnership’s future capital and operating expenses totaling approximately an additional $505 million. An affiliate of Penn West will serve as operator of the Assets.

Penn West also closed the previously announced private placement of 23,524,209 trust units of Penn West to an affiliate of CIC for proceeds of approximately $435 million.

Penn West will use the approximately $747 million of proceeds received for general corporate purposes.”

Source: Penn West Press Release

According to BusinessWeek, ” Norway’s sovereign wealth fund won’t exclude companies from Israel, which raided aid-laden ships bound for Gaza, from its portfolio because it doesn’t set ethical rules based on nationality, the Finance Ministry said.

‘It’s not in keeping with the ethical guidelines to exclude all companies located in a particular geographic area or country,’ the ministry said in a statement on its website today. ‘If we exclude companies due to their presence in a region, or because of a particular nationality, the fund would be perceived as a foreign policy instrument.’”

Read more: BusinessWeek

According to the AIG press release, “American International Group, Inc. (AIG) today announced that, after careful consideration, the company will adhere to the original terms of its previously announced agreement with Prudential plc for Prudential to acquire AIG’s wholly owned pan-Asian life insurance subsidiary AIA Group Limited. The company will not consider revisions to those terms.

AIG is a leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.

The AIA Group is a leading pan-Asian life insurance organization that traces its roots in the Asia Pacific region back more than 90 years. It provides consumers and businesses with products and services for life insurance, retirement planning, accident and health insurance as well as wealth management solutions. Through an extensive network of 320,000 agents and 23,500 employees across 15 geographical markets, AIA serves over 23 million customers in the region.”

Source: AIG Press Release

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According to NZ Interest, “The New Zealand Superannuation Fund could potentially partner in the buy up of clusters of farms as it moves to invest between NZ$300 million and NZ$500 million through its rural land strategy over the next three to five years.

In an interview with interest.co.nz Super Fund CEO Adrian Orr emphasized the rural push was a global, rather than merely New Zealand, one. However, he noted New Zealand was one of the best farms in the world so should “get a slice” of the investment.

Orr, former Reserve Bank deputy governor and head of financial stability, said the rural strategy was largely driven by riding the wave of global population growth, demand for protein and scarce resources. Created by the previous Labour-led government to help offset the burden of paying universal superannuation to a generation of retiring baby boomers, the Super Fund’s value stood at NZ$16.71 billion as of April 30.

Asked whether the 16 Crafar farms being sold by receivers KordaMentha or Dairy Holdings Ltd, the dairy farming business controlled by Allan Hubbard the owner of struggling South Canterbury Finance, might be of interest, Orr said it was too early to rule out anything.

“We don’t mind clusterings of farms because as part of a global portfolio it doesn’t have to be diversified just to New Zealand,” Orr said. “It (the Super Fund) is diversified globally.”

The Super Fund was currently working towards selecting managers who would have their own capital in the game and oversee the rural land investment.”

Read more NZ Interest