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Could SoftBank Challenge the Dominance of Blackstone?

Japan’s SoftBank Group Corporation has agreed to buy New York-based Fortress Investment Group LLC for approximately US$ 3.3 billion in cash in a bid to further cement the firm’s ascension into the lucrative world of money management. Fees are the revenue drivers for investment managers. The deal worked out that SoftBank would pay US$ 8.08 per share of Fortress Investment Group, a 38.6% market premium to the firm’s February 13, 2017 closing stock price. The money is not coming out of the SoftBank Vision Fund to fund the deal. Getting into the world of alternative investments, SoftBank can challenge the dominance of firms such as The Blackstone Group and Carlyle Group, as the conglomerate is now in control of hedge fund, credit, private capital and fixed income businesses. Fortress Investment Group had US$ 70.1 billion in assets under management as of September 30, 2016. SoftBank will also get control of Logan Circle Partners, a fixed income shop within Fortress Investment Group, which accounts for US$ 33.4 billion in assets under management.

Deal Flow

The Founder, Chairman and CEO of SoftBank is Masayoshi Son and he is known for being a direct investor, putting capital to work in e-commerce ventures, internet startups, designers and telecommunication businesses. Recent examples include investments in U.K. chip designer ARM Holdings Plc and satellite company OneWeb Ltd. Son, one of Japan’s richest men, has also realized that asset management and building up sources of committed capital can enhance opportunities. Son sees more wealth funds, pensions and endowments moving money into private equity and other illiquid asset classes, while many private equity firms struggle with deal flow. For example, Boston-based Massachusetts Pension Reserves Investment Management Board (MassPRIM), in a recent board meeting approved to increase its allocation to private equity from 10% to 11%, citing top performance in this asset class.

Almost always, private equity firms without sufficient access are challenged when trying to deploy limited partner capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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