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A Superyacht, Movie Stars, Compliance Issues in the 1MDB Goldman Sachs Saga

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Goldman Sachs fared well against the mortgage-backed security blowup of 2007 compared to its Wall Street peers at the time. Lehman Brothers and Bear Stearns didn’t fare so well. The investment banking giant is mired in this huge Malaysian 1MDB scandal, which puts the financial institution in a tough spot with investors who are concerned about Goldman’s compliance practices. Goldman Sachs was part of three bond deals in 2012 and 2013 that raised US$ 6.5 billion. The Malaysian government now is asking Goldman Sachs for US$ 7.5 billion in reparations.

According to the U.S. Department of Justice (DOJ), high-level 1MDB officials and their associates misappropriated an estimated US$ 4.5 billion from 1MDB between 2009 and 2014. Two Goldman Sachs directors were implicated by the DOJ in the scandal – Tim Leissner and Ng Chong Hwa (also known as Roger Ng).

Superyacht

Malaysian authorities are set to begin the new year with an auction of the 91-meter superyacht, Equanimity. It is expected to fetch a 9 figure sum. It has the distinction of having one of the largest spas on board a ship, and is the 65th largest yacht in the world. Malaysia’s sovereign wealth fund, 1MDB, invested in real estate and energy before branching out in several unusual and illegal ways. 1MDB funds paid for the yacht, a private jet, a Picasso which was gifted to Leonardo DiCaprio, and a birthday party for 1MDB consultant, Jho Low. A number of celebrities were brought in to perform at Low’s party, including Jamie Foxx, Chris Brown, Ludacris, and Pharrell Williams. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Biogen and Eisai Battered by Markets Over Alzheimer’s Trial Fail

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Cambridge, Massachusetts-based Biogen Inc. (BIIB) took a tumble of 28% in the morning of March 21st after it announced that it would cease its Phase 3 trials of Aducanumab. The therapy was intended to slow cognitive decline in patients with early onset Alzheimer’s. Biogen continued falling on March 22, 2019. Biogen and its Japanese development partner Eisai Co., Ltd. (ESALY) shared that the decision was based on results from an analysis conducted by an independent committee. The analysis determined that the trials were not going to demonstrate that Aducanumab could slow cognitive impairment. Eisai also fell 28% on the day, though it staged a relatively modest recovery on March 22nd. Some large institutional holders of Biogen include APG Asset Management (manager of Stichting Pensioenfonds ABP), Norges Bank Investment Management (manager of Norway Government Pension Fund Global), and Swiss National Bank.

The last time a treatment for Alzheimer’s made it to market was in 2003. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Italy’s CDP Inks Deals with Silk Road Fund and Bank of China

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China is building out its Belt Road Initiative (BRI) to continental Europe. On March 23, 2019, in Rome, Cassa depositi e prestiti Spa (CDP), Snam Spa (Snam) and Silk Road Fund Co., Ltd signed a Memorandum of Understanding (MoU) aiming at exploring and evaluating common business opportunities. Under the MoU, CDP and the Silk Road Fund will facilitate cooperation by focusing on the potential investment opportunities in the following sectors: financial services, agriculture, food, technology, manufacturing, infrastructure and transportation, energy and white economy (healthcare and personal care assistance).

Originally part of ENI, Snam S.p.A. is an Italian natural gas infrastructure company. The Silk Road Fund and Snam will analyze possible collaboration initiatives in the area of natural gas infrastructure (pipelines, storage facilities, LNG infrastructure and biomethane plants) in support of the growth of the natural gas and biomethane sectors in China from a decarbonisation perspective. In its capacity of a national promotion institutions, CDP will look at co-financing initiatives that are consistent with its mission also in the fields of energy and sustainability.

Bank of China

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Angolan Government Recovers Assets from Quantum Global Investment Management

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The State Prosecutor’s Office of Angola said that the country has control of all financial and non-financial assets. The Angolan government claims it recovered US$ 3.35 billion of assets that were under the management of Swiss-based Quantum Global Investment Management AG. Quantum Global Investment Management was essentially the sole manager of assets for the Fundo Soberano de Angola (FSDEA).[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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