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Abu Dhabi Investment Authority Appoints Ted Chu as Chief Economist

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According to the ADIA press release, “The Abu Dhabi Investment Authority said today it has appointed Ted Chu, as Chief Economist, effective immediately.

Mr. Chu, who will be based in Abu Dhabi, will be responsible for producing in-depth international and regional economic analyses and making recommendations based on this research.  As a member of ADIA’s Strategy Unit, he will also assist in developing, monitoring and assessing investment strategies across asset classes based on current and projected economic trends.

Mr. Chu joins ADIA from General Motors in Detroit, where he has served since 2006 as Chief Economist and Director of Global Economic & Industry Analysis, responsible for providing the Executive Committee with support on key investment decisions, business planning and strategic research.  He has also held other senior roles within GM since 1996, including senior economist Asia/Pacific, and manager for economic and industry analysis in the Americas, Asia Pacific, and Middle-East/Africa regions.

Before joining GM, Mr. Chu was a macroeconomist at the Central and Eastern European division of the World Bank in Washington.  He also served as an associate consultant specializing in energy and environmental economics at Decision Focus Inc, a Silicon Valley management science consulting firm.  Mr. Chu has an MA and Ph.D in economics from Georgetown University and a BA in economic management from the School of Management, Fudan University, Shanghai.

Commenting on the appointment, Jena-Paul, Head of ADIA’s Strategy Unit, said: “Ted brings with him an exceptional track record in macro strategy at the highest levels.  His knowledge and deep insights into global macro-economic trends will contribute significantly to ADIA’s long term asset-allocation strategy and ability to identify new asset class opportunities. We are very pleased to welcome Ted to the team.”

Mr. Chu said, “ADIA is one of the most prominent and respected organizations in global finance and I am delighted to be working alongside professionals with such deep experience across different asset classes and disciplines.”

Source: ADIA Press Release

China SWF Launches Fund with BNP Paribas and Eurazeo

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Eurazeo will manage a bilateral investment fund backed by the China Investment Corporation (CIC) and BNP Paribas to support French and European companies seeking to expand rapidly in China. The fund will be €1 billion to €1.5 billion in size. CIC, BNP Paribas, and Eurazeo, will invest significantly in the fund alongside additional investment limited partners. With a presence in China since 2013, Eurazeo will be responsible for managing the fund, as well as choosing and managing the investments.

The CIC has formed bilateral funds with private entities. CIC has a bilateral fund with Goldman Sachs Group.

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Petrobras to Spend $320 Million to Hedge Portion of Oil Production

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Revealed on March 22, 2019, Petroleo Brasileiro SA (Petrobras) spent US$ 320 million on put options as a hedge. Brazil’s state-owned oil company bought the options to hedge part of its crude production for 2019. This is at an equivalent of US$ 60 per Brent oil barrel. The options will expire by the end of 2019.

The put options enable Petrobras to deliver oil at US$ 60 per barrel, but not the obligation to do so.

In a securities filing, Petrobras said, “The strategy is to hedge the export operations expected for the year, that way partially protecting the company’s operational cash flow.”

To compare to 2018, Petrobras is spending less on options in 2019. Petrobras had put options at US$ 65 a barrel, covering 128 million barrels.

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Storebrand Generates Steady Returns for 2017 and 2018

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Norway’s largest private asset manager, Storebrand, had a 13.7% return on equity in 2018. Storebrand now has total assets under management of US$ 82.6 billion. The staggering results topped 2017’s returns of 11.3%. Odd Arild Grefstad, CEO, was keen to point out that “2018 was a good year,” in Storebrand’s annual report. Grefstad also reflected on the peculiarities that were overcome during the year: “Our financial solidity was strengthened and there was an increase in the dividends distributed to shareholders. At the same time, the financial markets experienced turbulence at the end of the year, in a somewhat uncertain macroeconomic situation.”

Last year, new initiatives were implemented to bolster sustainable investments. The fund is also pushing to improve water management. Another investment coming this year will address deforestation. That will include tackling soy and palm oil farming, and cattle ranching. Grefstad addressed Storebrand’s “green” priorities: “The financial industry is an important contributor in the efforts to limit global warming, and we have a clear strategy . . . we have strict environmental, climate, and sustainability criteria for all our investments.”

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