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3 Considerations in Liquidity Management for Sovereign Funds

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Sovereign investors and central bank reserve managers continually monitor price trends in exports, commodities and other macro-level inputs, as these factors can have a material impact on liquidity management strategies.

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On the sovereign wealth front, some of these institutional investors have a wide range of liabilities depending on government policy, applicable withdrawal legislation, funding sources and other factors. For example, Norway’s Government Pension Fund Global (GPFG) has a rule that 4% of the fund’s assets can be used for the country’s national budget per annum. In 2015, 179.6 billion NOK was transferred from the GPFG to the national budget. These scheduled cash calls and flows between official institutions, as well as anticipating unexpected events, supporting monetary policy, emerging funding, or urgent cash calls, are vital considerations when constructing an optimal liquidity profile. Another example is China’s central bank and the application of currency stability goals.

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Sovereign funds are engaging in greater scrutiny when selecting external managers for cash strategies and/or deposits. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

ADIA Seeks to Sell KIC Headquarters

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The Abu Dhabi Investment Authority (ADIA) is seeking to sell the building that houses the headquarters of the Korea Investment Corporation (KIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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BMO and OTPP Test Blockchain Canadian Dollar Debt Deal

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The Bank of Montreal (BMO) and the Ontario Teachers’ Pension Plan (OTPP) participated in a landmark blockchain Canadian-dollar debt transaction. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Just Group Acquires Corinthian Pension Consulting

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Just Group plc acquired a 75% ownership stake in the holding company of Corinthian Pension Consulting Limited (Corinthian Pension Consulting). Operating in the institutional world for over 12 years, Corinthian Pension Consulting provides advisory services to defined-benefit pension scheme trustees and scheme sponsors undertaking bulk scheme exercises. The remaining 25% will be retained by current shareholders of Corinthian Pension Consulting. Robert MacGregor will continue to lead Corinthian Pension Consulting, as its Chief Executive Officer. Furthermore, Corinthian Benefits Consulting Limited and Corinthian Affinity Solutions Limited will continue to operate as before, becoming part of a newly formed holding company, Corinthian Group Holdings Limited.

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