Sovereign Wealth Fund Institute

The press release states, “Aabar Investments PJS (“Aabar”) today confirmed an investment of $850 million in Glencore International plc (“Glencore”) as a cornerstone investor with an intention to invest an additional $150 million in the Global Offer. Glencore is one of the world’s leading integrated producers and marketers of commodities. This investment makes Aabar the largest cornerstone investor in the IPO.

His Excellency Khadem Al Qubaisi, Chairman of Aabar: “We are pleased to count ourselves as the largest new shareholder of Glencore post its IPO. Glencore is known for its achievements and value creation in the resources space and we are excited about the potential opportunities between Abu Dhabi and Glencore given Abu Dhabi’s leadership in petrochemicals and hydrocarbons domestically and around the world. The investment is consistent with our policy of investments and strategic partnerships with global market leading businesses and, we are looking forward to a successful partnership with the company”.

The $850 million investment represents the foundation of Aabar’s commitment as the largest cornerstone shareholder in Glencore and the sovereign wealth fund intends to acquire additional shares in the Global Offer to bring its initial investment up to $1 billion in the short term.

“Given Aabar’s focus on value enhancing investments and the great opportunity that global commodities offer we intend to explore in due course areas of co-operation between the two firms. This is an important milestone in Aabar’s development strategy and we are proud to lead this effort.” adds Mohamed AlHusseiny, CEO of Aabar.”

Read more: Aabar Investments Press Release

Mapletree Investments, a global real estate company owned by Singapore’s Temasek Holdings, was planning another IPO. This time for one of its commercial real estate portfolios. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

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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.]

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 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 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 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).

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According to Reuters, “The Government of Singapore Investment Corp (GIC) is exploring the possible listing of its logistics business in Singapore in an IPO valued at between $500 million to $1 billion, sources with knowledge of the deal told Reuters. The business is part of GIC Real Estate or GIC RE which is ranked amongst the world’s top 10 real estate investment firms. GIC, Singapore’s biggest sovereign wealth fund, declined comment.

“The proposal was to list their logistics business,” said a source who is aware of GIC’s plan. “They could do an industrial REIT (real estate investment trust).”

GIC RE manages a multi-billion U.S. dollar global portfolio of property assets, with over 200 investments in more than 30 countries.

JPMorgan and Citigroup are among the banks leading the talks for the mandate, one of the sources told Reuters.”

Source: Reuters