By creating this sovereign wealth enterprise, it will give Temasek additional organizational flexibility to access direct company stakes the region.

According to a statement sent out by Temasek Holdings regarding Pavilion, is that it will “complement and expand our coverage and capacity for North Asia, including China.”

The press release further states, “Avolon announces a US$300 million equity capital commitment from GIC, a leading sovereign wealth fund, subject to customary regulatory approval. Avolon has now secured a total of US$1.4 billion in equity capital from GIC and leading private equity firms, Cinven, CVC Capital Partners and Oak Hill Capital Partners. The equity commitment from GIC adds geographic diversity to Avolon’s capital base and enhances its ownership structure. GIC joins leading private equity firms Cinven, CVC Capital Partners and Oak Hill Capital Partners as equity investors in Avolon with each bringing significant experience and complementary strengths to the Avolon business.”

Read more: Press Release

Read more: GIC Press Release

M+S develops two key sites in Singapore

M+S Pte Ltd will develop four land parcels in Marina South and two land parcels in Ophir Rochor, each as an integrated development.  An indirect wholly-owned subsidiary of UEM Land Holdings Berhad (“UEM Land”), a real estate company within Khazanah’s portfolio, and an indirect wholly-owned subsidiary of Mapletree Investments Pte Ltd (“Mapletree”), a Temasek portfolio company, have been appointed to oversee the marketing and development of the project at Marina South.  For the Ophir-Rochor site, UEM Land and an indirect wholly-owned subsidiary of CapitaLand Limited (“CapitaLand”), another Temasek portfolio company, have been appointed to oversee the marketing and development.

Khazanah and Temasek are both committed to the successful commercialisation of these land parcels, which will include office, residential, hotel and retail components.

The gross development value of the project with a permitted gross floor area (“Permitted GFA”) of up to 501,020 sqm is estimated at approximately SGD11 billion (RM27 billion), subject to design and development plans.

Pulau Indah develops two new sites in Iskandar Malaysia

Khazanah and Temasek have worked together since last May to identify suitable sites in Iskandar Malaysia for joint commercial development. Two sites, one in Medini North and the other at the Heritage Cluster in Medini Central, have been confirmed.

Pulau Indah intends to develop serviced apartments, a corporate training centre, and commercial, retail, residential and wellness-related offerings on these sites. Khazanah and Temasek are currently in discussions and negotiations with potential partners and operators for the various components to maximize the commercial potential of the location.

The gross development value of the Iskandar project with a Permitted GFA of up to 1,365,675 sqm is estimated at approximately RM3 billion, subject to design and development plans.

Planning and design works for the projects had commenced in 1Q/2011.  With the signing of these agreements today, the projects will move towards design and further implementation and delivery of the initial phases over the next five years.

Khazanah’s Managing Director, Tan Sri Dato’ Azman Hj Mokhtar, said: “We are honoured to be undertaking these exciting developments at these key sites in Singapore and Iskandar Malaysia with our counterparts from Singapore, Temasek Holdings.  The development in Iskandar with Temasek will be highly complementary and builds on the momentum of existing and planned projects in Iskandar Malaysia, in which Khazanah has been involved since 2006.  Both these projects mark our first joint development investment with Temasek, and we look forward to a strong and fruitful partnership in both Singapore and Iskandar Malaysia.”

Ms Ho Ching, Executive Director & CEO of Temasek, added: ‘Both the Khazanah and Temasek teams put in tremendous effort, working very closely together to develop the best ideas possible for our joint projects. We were also very fortunate to have the expert and highly professional support of leading real estate companies like UEM Land from Malaysia as well as Mapletree and CapitaLand from Singapore. I am also especially grateful for the guidance, advice and support of very experienced industry leaders who will guide the Singapore developments as key Board members of M+S.  I look forward to the successful development of the projects both in Johor as well as Singapore.’”

Source: Khazanah Nasional Press Release

Tan Jee Say

Many sovereign wealth funds have the visible stress of managing overseas investments while properly communicating to the local citizenry on relevant updates. Most of the time, local citizens want to ensure the money is spent on reliable investments. This is why a number of sovereign funds become hesitant or have name-brand-selection bias when choosing investments. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

A few current sovereign-entity FIIs registered include:

• Abu Dhabi Investment Authority
• Abu Dhabi Investment Council
• Australian Future Fund
• Provincial Government of Alberta (AIMCo)
• China’s National Social Security Fund
• Fullerton Fund Management Company LTD (SWE of Temasek Holdings)
• Kuwait Investment Authority
• New Zealand Superannuation Fund
• Norges Bank
• Queensland Investment Corporation
• Singapore’s GIC

Sovereign entities can also invest as a Foreign Venture Capital Investor. FII’s are under strict regulation and cannot hold large positions in listed Indian companies. Times have changed, India wants to increase foreign investment in companies and attract foreign capital. There is a heavily-debated plan underway to create a new defined class of investor for sovereign funds which will be fundamentally different from the FII classification. This new proposal for sovereign funds would allow them to hold a much larger stake at 20% compared with 10% for a publicly traded Indian firm. The plan must be approved by SEBI and receive permission from the Reserve Bank of India. India’s fear was that foreign governments could create numerous sovereign entities to bypass the 10% rule and thus effectively control the company for geopolitical reasons.

Recently, the Government of Singapore Investment Corporation opened up an investment office in Mumbai. This was after India and Singapore signed a Comprehensive Economic Co-operation Agreement (CECA). The Indian Government would also treat Temasek Holdings and GIC as separate investors, not acting in concert in potential large stake undertakings. Sovereign wealth funds are warming to investing in the Indian equity markets as the Government of India begins to warm up to foreign investments.