The China-ASEAN Investment Cooperation Fund (CAF) – a dollar-denominated private equity fund formed under direction of China’s State Council in 2010 that targets investments in infrastructure, energy, and natural resources in Southeast Asia – has reportedly begun reaching out to prospective investors for phase two funding.
With the US$ 1 billion it received in starting capital during the first phase wrapped up in companies in Cambodia, Laos, Myanmar, the Philippines, and Thailand; the CAF now aims to raise up to US$ 3 billion in additional funds, and US$ 10 billion over the long haul.
Southeast Asia Investment Strategy
The fund will need every dollar it can get if it’s to support its mission of deepening China’s economic influence within the 10 member-states of the Association of Southeast Asian Nations (ASEAN), which lies at the center of Beijing’s ambitions for bringing the region under its continent-spanning One-Belt One-Road initiative. Introduced in 2013 by China President Xi Jinping, the project envisions a modern-day revival of the Silk Road trade routes that once ran unfettered over land and sea, allowing goods of all kinds to be traded across the regions of ancient world, and which derive their name from the highly lucrative Eurasian silk trade that propelled China into a golden age of economic and diplomatic prosperity.
CAF is one of a handful of quasi-state investment funds created by Beijing over the past decade for the purpose of realizing its vision of global commerce. The much larger, US$ 40 billion Silk Road Fund established in 2014, for instance, focuses on supporting businesses rather than the financing of individual projects. China’s commercial and policy bank – including the China Development Bank (CDB) and Asian Infrastructure Investment Bank (AIIB) – are also heavily involved, having received US$ 82 billion for such projects from the central government. Together, they pump capital into countries all along the Silk Road corridor, from Mongolia to Montenegro.
What the Capital is for?
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New York-based Infor is an enterprise cloud software company. Infor raised US$ 1.5 billion from existing shareholders, Golden Gate Capital and Koch Equity Development LLC. Koch Equity Development is the investment and acquisition subsidiary of Koch Industries, Inc. Infor has 17,300 employees. At fiscal year 2018, Infor claims it generated over US$ 3 billion in revenue. Infor states that over 72% of all hospitals in the United States run Infor applications. Infor could be heading toward an initial public offering (IPO) or possibly be acquired by a company like Oracle Corporation or Salesforce. Charles E. Phillips is the CEO of Infor and before heading it was Co-President of Oracle from 2003 to 2010.
On February 21, 2017, Koch Equity Development invested US$ 2 billion into Infor. Koch Industries was a customer of Infor before it became an investor in the company. Golden Gate Capital made its first investment in Infor in 2002.
Matt Flamini is the President of Koch Equity Development. Jim Hannan is Koch Executive Vice President and CEO of Enterprises for Koch Industries, Inc.
Australia’s Scott Morrison government may soon allow the country’s Future Fund to offer low-fee superannuation accounts. Aware of the proposal, Prime Minister Morrison stressed that offering Australia a low-fee, government-managed superannuation fund as a default option is not government policy.
However, many proponents of this model believe it would create competition in the country’s US$ 2.7 trillion dollar retirement system. The Future Fund Chairman, Peter Costello, and economist Nicholas Gruen, CEO of Lateral Economics, put forth the idea, and it is quickly gaining support. This comes in the wake of Australians learning that they were losing US$ 3.8 billion annually in high-fee, underperforming accounts, and many were mistakenly being charged fees with no accompanying service provided. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
In a boost for Gulf-based debt, JPMorgan is adding their debt compositions to two influential emerging market bond indexes. These emerging market indexes are the most widely tracked among asset managers in the industry. Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Qatar are being added to the J.P. Morgan EMBI Global Diversified Index and the EMBI Global, starting January 31, 2019. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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