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Do Sovereign Wealth Funds Need Bankers for Deal Flow?

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Sovereign funds are earning their keep as buyers of assets, competing against private equity funds for lucrative stakes in companies like New China Life and a U.K. mobile company. The competition for attractive, long-term, sustainable companies is fierce. In 2007, sovereign wealth funds owned about US$ 3.5 trillion in assets, and there were far fewer in number. Pre-2004, these public institutional investors were known by dealmakers on Wall Street but significantly unknown by the financial media and general public. In the past, wealth funds frequently procured the use of investment bankers for idea generation and deal flow (and still do today), but the relationship between banker and asset owner has evolved favoring the latter. The push and pull relationship continues to propagate; the needs of investment banking and deals remain, but the level of trust vacillates. In this story, we have selected Goldman Sachs to analyze for multiple reasons. First, Goldman typifies the ideal investment bank to many in the industry. The bank has a reputation for getting deals and getting paid massive amounts of money. Analyzing multiple sources of data, including our own, the investment bank year-to-date is the top fee generator in the area of mergers & acquisitions. Trailing behind is JP Morgan, Bank of America Merrill Lynch, Morgan Stanley, Deutsche Bank and Citi when it comes to fees and M&A.

Has Goldman Sachs investment banking lost out to competitors when it comes to dealing with sovereign funds?

Inside Goldman Sachs

Former Goldman Sachs co-Chair John Whitehead (passed away in 2015) wrote his 10 commandments. One of this commandments was “Important people like to deal with other important people. Are you one?”

This highlights the culture of Goldman Sachs. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Progetto Iride Issues Inaugural Tender for Joint PE Investment

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Progetto Iride, translated in English to Project Iris, is an investor group of five Italian pension funds. Progetto Iride issued an RFP for a private equity manager for a joint portfolio worth around €216 million.

The funds under Progetto Iride have €6,122,872,593 in assets as of December 31, 2018.

The five constituents of Progetto Iride are Foncer (€28 million allocation), Fondenergia (€72 million allocation), Fondo Gomma Plastica (€46 million allocation), Pegaso (€30 million allocation), and Previmoda (€39 million allocation).

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Flexstone, Hostplus Initiate U.S. Private Equity Program

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Australia-based superannuation fund Hostplus appointed Flexstone Partners to run a U.S. private equity emerging managers program. Flexstone Partners is owned by Natixis Investment Managers. The emerging managers program will see Flexstone Partners invest over the next three years in the first, second or third funds of U.S. middle-market private equity managers on behalf of the industry superannuation fund.

Hostplus is the industry superannuation fund for those who live and love Australian hospitality, tourism, recreation, and sport.

Flexstone Partners was formed in 2005 and is the combined entity of Caspian Private Equity, Euro-Private Equity France, Euro-Private Equity Swiss, and Eagle Asia Partners.

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Trump to Nominate Stephen Moore to Federal Reserve Board

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U.S. President Trump plans to nominate Stephen Moore to the Federal Reserve board. Moore is currently a visiting fellow at the Heritage Foundation. He served as a Senior Economic Advisor to Trump’s 2016 presidential campaign. In 1987, Moore was Research Director of U.S. President Ronald Reagan’s Privatization Commission. Moore also served as a Fellow at the Cato Institute and was a Senior Economist under the U.S. Congress Joint Economic Committee under Chairman Dick Armey of Texas

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