Sovereign wealth funds are significant actors when it comes to the world of direct investing. Since the 2000s, the number of wealth funds has blossomed. However, over the past year, there has been a recognizable slowdown in the dollar amount of cross-border SWF investment as deal making activity considerably subsided. For the first half of 2016, wealth funds and other public pension investors invested US$ 73.2 billion directly, according to data from the Sovereign Wealth Fund Transaction Database. This is a sharp decline from the US$ 126.7 directly invested in the first half of 2015.
A number of observations are that more wealth funds have been allocating toward alternative investment vehicles such as real estate funds, credit funds and infrastructure funds. Second, there has been some pull back in direct listed equity investing. Third, there were gaps between buyer and seller valuations in industries such as financials. For example, TPG’s bid to acquire ICICI Home Finance was delayed because ICICI Bank demanded a higher valuation. TPG ended up agreeing to a price, then reached out to some wealth funds to help back the deal. Lastly, wealth funds alone in the first half of 2016 invested US$ 37.1 billion directly versus US$ 67 billion from the first half of 2015.
For the first semester of 2016, the top financial advisor was Goldman Sachs. Goldman Sachs rose from fifth, in the second half of 2015, to first in the current half-year period. Goldman Sachs was ranked #1 for the first half of 2015. Vacating their former top spot which they occupied in the second half of 2015, is Eastdil Secured.
For the first half of 2016, the top legal advisor for public fund transactions was Linklaters tied with Herbert Smith Freehills.
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Source: SWFI – Sovereign Wealth Fund Transaction Database – www.swftransaction.com, July 6, 2016
Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.
Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.
Aflac Inc. is an American insurance company founded in 1955. The company is the biggest provider of supplemental insurance in the United States. Aflac also has major operations in Japan.
In December 2018, Japan Post Holdings (JPHLF) signaled it was spending US$ 2.64 billion for a 7-8 % stake in Aflac. The goal is that, in four years time, Aflac will become an affiliate of Japan Post. Japan Post hopes to accomplish this by becoming the largest voting shareholder of the company. The world’s 13th largest company, with 400,000 employees, Japan Post needs to expand to chase further growth, mainly because Japan Post expects the postal business to decline. Diversification is seen as the optimal route to long term stability for the holding company. Japan’s economy is worrying. Japan’s aging population means that many insurance companies are facing a shrinking customer base, Japan Post settled on a plan to expand overseas.
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The Russian Direct Investment Fund (RDIF) and the Development Agency of Serbia, also known as Razvojna agencija Srbije, reached an agreement to work together to identify attractive investment projects to strengthen bilateral economic ties and increase investment flows between Russia and Serbia. Russian capital and businesses are keen on investing in Serbia.
In addition, the two countries signed an agreement to cooperate on civil nuclear energy, according to state-owned Russian reactor builder Rosatom (Rosatom State Nuclear Energy Corporation). Rosatom continues to expand it business of nuclear cooperation deals in a wide number of countries.
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