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Despising and Embracing Sovereign Wealth

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cityThe sheer size and reach of sovereign wealth funds steered government policymakers’ attention. In 2007, politicians asserted, “how can these governments buy up our prized national assets?”

In 2012, the message was “will they buy our bonds now?”

The protectionist attitude towards sovereign wealth funds has changed dramatically and it wasn’t because of the Santiago Principles or a change of heart. It was a necessity created by the financial crisis for Western nations to maintain their welfare state and standards of living. Spanish and Italian government officials have courted Asian sovereign wealth funds and central banks. British government officials have courted their Gulf partners. Sovereign wealth funds have been courted to purchase European sovereign debt, but they prefer companies, properties, and real assets.

The rapid growth of state-owned accumulated assets versus pension asset growth has spurred interest among fund managers and financial institutions. The finance media followed the bandwagon of the sovereign wealth moniker just as when private equity and hedge fund were trending.

April 2012, sovereign wealth funds are basically at US$ 5 trillion, Occidental governments have taken notice of this. In 2007, sovereign asset growth was projected by some investment banks to double or at least triple, but this did not come true because of the devastating effects of the financial crisis of 2008.

SWFI First Read, June 21, 2018

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PSP Investments Nears Deal on Azelis

PSP Investments and EQT Partners (through fund EQT VIII) are in exclusive talks to acquire Belgium-based Azelis S.A. from funds managed by Apax Partners. Formed in 2001, Azelis is a specialty chemicals and food ingredients distributor. The transaction is subject to regulatory approvals.

Oxford Properties Wins Rights on Barangaroo Office Development

Melbourne-based Grocon Pty Ltd selected Oxford Properties, the real estate unit of OMERS, as a preferred partner for it’s a A$ 2 billion, 5.2-hectare Barangaroo Central project development. This is an office tower development. Oxford Properties essentially won the rights toward the project (rumored at a price of A$ 100 million), freeing the developer from a high-cost finance deal with Maxcap, a lender.

Investment Management Corporation of Ontario Selects Jean Michel as CIO

The Investment Management Corporation of Ontario named Jean Michel as chief investment officer. This role is effective July 3, 2018. Michel was executive vice president, advisory services to depositors and strategic analysis, at Caisse de Depot et Placement du Quebec (CDPQ).

Wil Warren Named President of Lexington Partners

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Large Public Asset Owners Commit to Goodman Brazil Logistics Partnership

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Canada Pension Plan Investment Board (CPPIB) unveiled plans to commit 500 million BRL (C$ 175 million) in equity for a 20% interest in the newly established Goodman Brazil Logistics Partnership to invest in prime logistics and industrial assets in the key gateway cities of São Paulo and Rio de Janeiro. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mubadala Supports Two European Aquaculture Transactions

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Mubadala Investment Company is keen on growing exposure to agribusinesses whether in farming or aquaculture. With money from Mubadala and AMERRA Capital Management LLC, Andromeda Group acquired Nireus SA (at 74.34% stake) and Selonda SA at (79.62% stake), two European aquaculture companies that focus on sea bream and sea bass. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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