Sovereign Wealth Fund Institute

First Quarter 2013 – Resilient Start for Direct SWF Transactions

Web Director — Mon, 20 May 2013 03:36:32 +0000

First quarter data of 2013 from the Sovereign Wealth Fund Transaction Database (SWFTD) has been tabulated. During the first quarter of 2013, direct sovereign fund transactions totaled US$ 14.8 billion. This is an incremental increase of 2.06% compared to the first quarter of 2012. As 2013 progresses, the first quarter number should experience a positive revision. Sovereign wealth funds entered a high number of direct market transactions stemming from the fourth quarter of 2012 till the end of the first quarter of 2013.

This illustrates sovereign funds played a role in the increased price growth in global public equity markets.

Total Direct Sovereign Wealth Fund Investment Activity Per Quarter Click on image to enlarge

Source: Sovereign Wealth Fund Transaction Database – Latest database statistics of 5/19/2013

Direct investments in U.K. public equities increased from the fourth quarter of 2012. There continues to be stable investment in U.S. equities, directly from sovereign funds over the past six quarters.

Core real estate is a popular direct investment choice for sovereign funds. Some notable first quarter 2013 deals include Norway’s Government Pension Fund Global (GPFG) buying a 49.9% stake in five office properties in the United States through a joint venture with TIAA-CREFF. The real assets were valued at US$ 1.2 billion. The Abu Dhabi Investment Authority purchased an office at 90 boulevard Pasteur owned by Credit Agricole for € 250 million.

Direct Investments by Notable Sectors – Billions USD

Period	Financials	Real Estate and Infrastructure	Information Technology
Q3 Y2012	1.09	5.16	1.68
Q4 Y2012	4.68	8.92	0.77
Q1 Y2013	1.63	4.50	0.72

Source: Sovereign Wealth Fund Transaction Database – Latest database statistics of 5/19/2013

Data for the second quarter of 2013 presents an increase in sovereign fund participation in private equity buyouts and initial public offerings.

The Sovereign Wealth Fund Transaction Database is available online for database subscribers. Transaction data can now be accessed on a more frequent basis. The SWFTD now contains over 5,000 recorded transactions.

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Nostalgia – Old Sovereign Wealth Fund Logos

Web Director — Sat, 18 May 2013 21:43:04 +0000

Many of the massive sovereign funds today were started before the 2000s. Below are some old sovereign wealth fund logos. Click to enlarge logos.

Kuwait Investment Authority

GIC – 1998

Temasek Holdings 2002

Temasek Holdings 2004

Khazanah Nasional

Abu Dhabi Investment Authority

China Investment Corporation – Debut

Qatar Holding Invests in Milan’s Porta Nuova Project

Web Director — Fri, 17 May 2013 05:43:18 +0000

In the midst of troubling economic times, the skyline of Milan is rising. As Italy’s financial hub, Milan is home to the Italian Stock Exchange. The government of Qatar is keen on Italian real estate developments, especially mixed-used projects in highly-trafficked zones. Qatar Holding LLC, the sovereign wealth enterprise of the Qatar Investment Authority (QIA), is purchasing a 40% stake in Milan’s minted Porta Nuova business district through a subscription of newly issued shares. The Porto Nuova district is undergoing a massive economic renewal that will connect to Milan’s oldest business district, bordering Centro Direzionale di Milano. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

CPP Fund Exceeds $183 Billion at 2013 Fiscal Year-End

Web Director — Fri, 17 May 2013 03:47:37 +0000

According to the press release, “The CPP Fund ended its fiscal year on March 31, 2013 with net assets of $183.3 billion, compared to $161.6 billion at the end of fiscal 2012. The $21.7 billion increase in assets for the year consisted of $16.2 billion in net investment income after operating costs and $5.5 billion in net CPP contributions. The portfolio delivered a gross investment return of 10.1% for fiscal 2013.

“All of CPPIB’s diverse investment programs played a part in delivering the Fund’s substantial increase in assets in fiscal 2013,” said Mark Wiseman, President & Chief Executive Officer, CPP Investment Board (CPPIB). “We are leveraging this growth to build the foundation for a leading global investment organization, positioning CPPIB to create enduring value for all contributors and beneficiaries in the decades ahead.”

In the ten-year period up to and including fiscal 2013, CPPIB contributed $75.1 billion in cumulative net investment income to the Fund after operating costs.

“While the strength of public equity markets was the leading factor in the solid annual return this year, CPPIB’s active investment programs also contributed to the portfolio’s performance,” said Mr. Wiseman.

“Indeed, we took full advantage of our deep internal capabilities, exceptionally long investment horizon, and global scale and scope to complete a number of sizeable and complex transactions that will continue to generate value in the years to come.”

During fiscal 2013, CPPIB completed 36 transactions of over $200 million each in 11 countries around the world.”

Investment Corporation of Dubai Seeks to Assist Dubai Real Estate

Web Director — Thu, 16 May 2013 14:27:18 +0000

Construction projects in Dubai were deeply affected by the real estate slump. The Investment Corporation of Dubai continues its efforts to support the local Dubai real estate industry. The Investment Corporation of Dubai and Brookfield Asset Management are hoping to lockdown $500 million in financing to launch a real estate fund dubbed the ICD-Brookfield Dubai Real Estate Fund. The original target amount was $1 billion. The fund would be used to recapitalize frozen real estate projects in Dubai. The announcement of the fund’s creation was in October 2011.

Mubadala and Dubai Aluminium Acquire Remaining Guinea Alumina Corporation Limited

Web Director — Wed, 15 May 2013 05:54:55 +0000

According to the press release, “Global Alumina Corporation announced today that it has signed a share purchase agreement with DM GAV Limited, a company established and owned equally by Mubadala Development Company PJSC and Dubai Aluminium, to sell all of Global Alumina’s interests in Guinea Alumina Corporation Limited to DM GAV. Pursuant to the SPA, DM GAV will make a US$2 million advance payment to Global Alumina on signing of the SPA and will pay an additional US$36 million upon completion of the transactions contemplated by the SPA, which is scheduled to occur on or before August 31, 2013. A copy of the SPA will be available on the Company’s SEDAR reference page at www.sedar.com.

Coincident with this transaction, Global Alumina International Limited and The Broken Hill Proprietary Company Pty Limited “BHP Billiton” have agreed to terminate their share purchase agreement which was announced on November 1, 2012. Concurrent with this termination and execution of the SPA, DM GAV signed a share purchase agreement directly with BHP Billiton to buy all of BHP Billiton’s interests in Guinea Alumina.

Conditions to Completion include no objection having been received from the Government of Guinea, completion of DM GAV’s acquisition of BHP Billiton’s interests in Guinea Alumina and Global Alumina’s regulatory and shareholder approvals. These conditions must be satisfied by August 31, 2013 or the SPA may be terminated.

Global Alumina intends to use the US$2 million advance payment to fund accrued liabilities and ongoing corporate costs until Completion. Under the SPA, the Company has given limited representations and warranties some of which will survive for up to two years following Completion.”

Consortium including Temasek Holdings to Buy Asiainfo-Linkage

Web Director — Tue, 14 May 2013 01:27:25 +0000

An investment consortium led by CITIC Capital Partners is going to buy Asiainfo-Linkage Inc. for about US$ 890 million. U.S.-listed Asiainfo-Linkage Inc provides software to telecommunication companies with big clients such as China Unicom, China Telecom and China Mobile. Using Ellington Investments Pte. Ltd., Singapore’s Temasek Holdings is part of the consortium of investors. Other consortium members include China Broadband Capital Partners II, L.P. and Edward Tian, co-founder and a significant stockholder of the Asiainfo-Linkage Inc.

The consortium has agreed to pay US$ 12 per share for the company.

Morgan Stanley was the lead financial advisor for CITIC Capital. Other advisors for buyers include Nomura International, ICBC International Capital Ltd and China Renaissance Holdings Ltd.

Bank of Taiwan, Cathay United Bank, Co., LTD., ICBC International Capital Limited, Maybank Investment Bank Berhad and Nomura International (Hong Kong) Limited have agreed as mandated lead arrangers to arrange a debt facility in the aggregate amount of US$330 million to provide debt financing for the acquisition.

Park Alpha – Outsourced Chief Investment Officer Model May 2013

Web Director — Tue, 14 May 2013 00:20:43 +0000

Park Alpha, the consulting division of the Sovereign Wealth Fund Institute, has released a briefing on the Outsourced Chief Investment Officer (OCIO) model. Essentially, the outsourced chief investment officer (OCIO) model permits the advisory firm to manage the client portfolio on a discretionary basis – allowing the firm to make changes (with prescribed limits) in investments. The OCIO model behaves in a similar capacity as professional investment staff.

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We are the consulting division of the Sovereign Wealth Fund Institute. We are not a brokerage or 3rd party marketer. parkalpha website

NBIM and Prologis JV Look to LondonMetric’s Distribution Network

Web Director — Mon, 13 May 2013 23:01:40 +0000

LondonMetric Property Plc is a real estate investment trust (REIT) that was created from a merger between Metric Property Investments Plc and London & Stamford Property Plc. The UK-based REIT is in discussions to sell £275 million in distribution warehouses across England to the €2.4 billion joint venture managed by Prologis and backed by Norges Bank Investment Management (NBIM).

The warehouses are occupied by third-party logistic operators. The assets are held in a joint venture between LondonMetric Property and Green Park Investments, a Middle-Eastern group.

London & Stamford sold its jointly owned Meadowhall shopping centre to Norges Bank Investment Management in the Fall of 2012.

Doha Global Investment’s IPO Postponed Until Authority Approvals

Web Director — Mon, 13 May 2013 07:52:56 +0000

Doha Global Investment Co., the investment company partially-backed by Qatar Holding LLC, has postponed their initial public offering on the Qatar Exchange to a new date. The investment company plans to manage $12 billion in assets, in which $3 billion of assets will be transferred from Qatar Holding into the new entity. The new vehicle will invest in assets such as equities, real estate and direct investment in companies. The government of Qatar is attempting to use Qatar Holding’s investment platform and create a similar entity, so the Qatari citizens can partake in international investments under the government umbrella.

Hussein Ali al-Abdullah, acting chairman of both Qatar Holding and the bourse, said in a statement that the IPO has been postponed “until all requirements and approvals from the concerned authorities are obtained.”

Only citizens, companies and institutions in Qatar can invest in the IPO. Credit Suisse is the advisor on the IPO for Doha Global Investment.