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BRIEFING: Sovereign Funds Hold Steady on Private Equity Allocation

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swfi_PE_coveraug2016_1Sovereign wealth funds are major allocators to private equity in all forms, whether in private equity funds, co-investing or direct investing. As of June 2016, total sovereign wealth fund assets amounted to US$ 7.37 trillion.

Sovereign Wealth Fund Private Equity Allocators – 2016

Sovereign Wealth Fund Private Equity Allocators – 2015

Traditionally, public pensions have been a reliant source of capital for private equity deals. However, sovereign wealth funds continue to gain ground in the private equity investor base, as assets steadily grow for the institutional investor class. The total sovereign fund allocation to private equity tepidly increased for the year ended June 30, 2016, for a number of reasons. First, several wealth funds have been realigning their private equity fund interests, selling some off to secondary buyers (sometimes even other asset owner peers), while continuing to recommit to strategic/geopolitical private equity funds, push capital into separate accounts, augment co-investment activity or allocate to top-quartile funds. Second, a clear majority commodity-based wealth funds, along with a number of Asian wealth funds, needed to increase portfolio liquidity in 2015 and early 2016. This also led to wealth funds selling off direct investments in private equity and real estate. By doing this, wealth funds are building cash reserves in case of liability needs, while “storing energy” for distressed companies and assets down the road.

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Source: SWFI – August 17, 2016

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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