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A Gander into the KIC’s Recent Equity Plays

13fApparently the Korea Investment Corporation (KIC) thinks Elon Musk might be onto something with his high-end electric cars. According to a 13f filing for the quarter ending September 30, 2013, the sovereign wealth fund picked up 5,200 shares of Tesla Motors Inc., the electric car manufacturer headquartered in Palo Alto, CA.

During the quarter represented by the report, Tesla stock shot up to nearly US$ 200 a share, but sales numbers that came in less than economists’ estimates took some wind out of the stock in after-hours trading on that Tuesday.

The KIC also made a significant reduction in its holdings (a nearly 60% reduction) in Potash Corporation of Saskatchewan.

Another notable market transaction was a small position in Cheniere Energy Inc. of 19,300 shares. Readers may recall that earlier this year Temasek Holdings sold off 9 million shares and reaped a giant return. In addition, Cheniere Energy fits into the American natural gas theme story.

Looking at the financial sector, the KIC offloaded roughly 2 million shares of a few of its holdings including a million shares in Bank of America Corp, just under 500,000 shares in Citigroup Inc. and nearly 500,000 shares in JP Morgan & Chase & Company. It completely sold off all of its shares in Royal Bank of Canada and Brookfield Asset Management.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Asian Sovereign Funds Not Slowing Down on Tech Investing

According to data from SWFI’s Sovereign Wealth Fund Transaction Database, Asian sovereign funds invested US$ 6.05 billion directly into companies and assets in the information technology sector from Jan 2017 to November 22, 2017. In a comparable time frame from Jan 2016 to November 22, 2016, this same group of Asian sovereign funds directly invested US$ 5.02 billion in the sector. These are direct investments, not fund commitments or manager allocations.

Asian sovereign funds such as GIC Private Limited, Temasek Holdings and the Korea Investment Corporation (KIC) have demonstrated bullish signals to the technology community over other sectors. GIC and Temasek have also been major investors in the private side of deals, funding a wide range of tech startups, while providing financial firepower in buyout transactions.

Some notable direct tech investments in 2017 by sovereign funds include Meituan-Dianping, SoundCloud, Nets A/S, Visma AS, Turn, Inc. and Vantiv.

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Future Fund Makes a Guardian Out of Former J.P. Morgan ANZ Chair

The Australian government has appointed Robert Priestley – current non-executive chair of J.P Morgan for Australia and New Zealand (ANZ) and a non-executive director of ASX – to serve on the Future Fund Board of Guardians for a five-year term from November 7, 2017. Priestley replaces former Morgan Stanley Australia chief executive Steven J. Harker.

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Associated British Ports Reboots Property Development Arm to Capitalize on Land Bank

Associated British Ports (ABP) – operator of 21 major ports throughout the United Kingdom – has announced a reboot of its ABP Property division, complete with a new team of specialists in commercial development and logistics led by Huw Turner, in order to identify and develop strategically significant locations in its 2,372 acre land bank.

ABP is owned in large part by a consortium of pensions and sovereign funds, including the Canada Pension Plan Investment Board (CPPIB) at 33.88% ownership, OMERS at 30%, Singapore’s GIC Ventures Pte Ltd at 20.00% ownership, and the Kuwait Investment Authority at 10.00% ownership. Large institutional investors such as sovereign funds, pensions, and endowments have slowly increased allocation towards infrastructure over the past six years as an alternative to equities and bonds, according to asset allocation data from SWFI.

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