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CIC’s Zhou Says U.S. Should Spend Much More on Infrastructure

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Bloomberg reports, “U.S. infrastructure-spending plans are “too little, too late” and should be increased in preference to quantitative easing, said Zhou Yuan, head of asset allocation at China’s $300 billion sovereign wealth fund. Proposed spending of about $500 billion over six years on infrastructure should be doubled, Zhou said in an interview on Oct. 30.

China Investment Corp. may invest, and wouldn’t expect to own completed projects, he said. “Infrastructure of this kind will serve to provide more jobs” than further quantitative easing, Zhou said in New York, while attending a conference hosted by the Chinese Finance Association. Low interest rates in the U.S. are his “top concern,” he said.

Congress has yet to approve the proposed $500 billion of spending on highways and transit. Transportation Secretary Ray LaHood said Oct. 12 he hoped Congress would make the plan a priority next year. Beijing-based CIC was created in September 2007, funded by a $200 billion allocation backed by China’s foreign reserves. Zhou said the fund has depleted its cash to the point where it’s seeking more government money. About 8.6 percent of the portfolio was in cash as of June 9, according to Executive Vice President Jesse Wang. Cash and equivalents were 32 percent of holdings at the end of 2009, according to its annual report.

“We are expecting continued injections,” Zhou said. “The form, quantity and structure remain to be determined.””

Source: Bloomberg

SWFI First Read, September 21, 2018

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U.S. Public Becomes More Aware that Gmail Scans Emails

Alphabet is a major stock holding for sovereign wealth funds and large pensions. Search giant Google is under fire for allowing third-party partners and companies, like Return Path Inc and other advertisers, to share data from Gmail accounts. Many experts and tech observers already knew this, but more people in the public are becoming aware of Google’s practices when it comes to privacy. Google disclosed in a letter to U.S. lawmakers this finding. The Wall Street Journal reported that in some instances, app companies were able to read people’s emails in order to improve their algorithms. In 2017, Google said they would stop scanning all of one’s Gmail messages for the goal of personalized ads.

GPIF Infrastructure Exposure Almost Reached 200 Billion Yen in March 2018

Japan Government Pension Investment Fund’s (GPIF) exposure to infrastructure real estate was 196.8 billion JPY at the end of March 2018. At that period, 57% of the exposure was to the UK, 15% was to Australia, 15% to Sweden, 10% to Spain and 3% to Finland. 21% of GPIF’s infrastructure portfolio was linked to airports versus 27% to ports.

AIMCo-backed sPower Closes $498.7 Million Bond Deal

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Iceland Contemplates a Sovereign Wealth Fund

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The Government of Iceland is looking to possibly form a sovereign wealth fund to stabilize the country from unforeseen shocks to the national economy. The Iceland government released a statement saying, “The state’s contributions to the Fund will be equivalent to new revenues from publicly owned power production companies which are expected to accrue in the coming years.”

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CBRE Global Wins First GPIF Global Real Estate Mandate

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Japan Government Pension Investment Fund (GPIF) awarded its first global real estate mandate by hiring CBRE Global Investment Partners Limited. This is a global core real estate fund-of-funds separate account. Overseeing this mandate as a gatekeeper is Asset Management One Co., Ltd., which is a unit of Mizuho Financial Group. This RFP was launched in April 2017.

CBRE Global Investment Partners is the multi-manager arm of CBRE Global Investors.

In addition, on August 8, 2018, GPIF hired two custodians for short-term investments. These custodians are Trust & Custody Services Bank, Ltd and The Master Trust Bank of Japan, Ltd.

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