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Blurring Lines of Emerging Market Debt

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Global money flows are shifting faster. Institutional investors have been at fault at trying to divide the world into sections such as developed markets versus emerging markets. Before the crisis, developed markets were thought of to be risk-free. Looking through the eyes of a developed market investor in the past these emerging economies have had defaults or issues with inflation. Times have changed and these growth economies are increasing real GDP year over year and playing a bigger role in the world economy.

After the financial crisis of 2008, the lines between “risky” and supposedly “risk-free” are blurring. Investors still remember issues with Latin American defaults, etc., but now Western economies are faltering. Greece, Portugal are facing dire issues, even the United States lost its AAA rating. Bottom-line, the risk premia for emerging markets has dropped as their finances have improved and credit ratings increase. In fact, many emerging markets are net creditors, possess strong reserves and have created sovereign funds to invest abroad.

Emerging market debt can be a source of diversification and alpha for public investors. Investor appetite is growing as many risk-averse investors are pushing down yields in treasuries and other safe haven instruments. The biggest move for emerging market debt is if it can cross into being considered investment grade. This is the ultimate game changer for emerging market debt.

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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