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Dubai World Welcomes MGM’s $200M CityCenter Project Payment

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Dubai World Sunday welcomed a last-minute $200 million payment by MGM Mirage (MGM) for the CityCenter project in Las Vegas as a “sign of good faith”, but warned it was a temporary solution to the liquidity problems the casino operator is facing. MGM Mirage made a $200 million payment due Friday to its City Center project, including the $100 million owed by Dubai World, to keep the massive resort and casino project from halting construction and potentially falling into bankruptcy.

“Dubai World appreciates the support of MGM Mirage’s bank group and the CityCenter joint venture’s bank group in providing a waiver to its client that allows this payment,” the investment company, which is owned by the emirate’s government, said in an emailed statement. “It is as an acceptable, albeit temporary, solution to the liquidity issues that MGM Mirage is facing, which are at the heart of the lawsuit filed in Delaware earlier this week,” it said.

Last week, Infinity World – a subsidiary of Dubai World – sued MGM, alleging that the troubled casino operator breached the terms of their venture. MGM has said the suit is “completely without merit.” Dubai World has blamed MGM for massive cost overruns on City Center. Earlier this month, MGM reported it swung to a fourth-quarter net loss on a $1.2 billion write-down, and the company said it saw weakness in gaming and the economy in general in the first quarter.

read more: WSJ

SWFI First Read, June 22, 2018

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JPMorgan Fund Buys 40% of Oxford Properties’ French Portfolio

A fund advised by JP Morgan Asset Management committed €400 million in Oxford Properties’ French portfolio. Essentially, Oxford Properties sold a 49.9% non-managing interest in 32 Rue Blanche, 92 Avenue de France and Paris Bastille. Oxford Properties made its maiden investment in Paris in 2014 when it acquired 32 Rue Blanche.

Oxford Properties is the real estate unit of OMERS.

Temasek Explores Further Cash Commitments to FirstCry

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DOL Fiduciary Role is Struck Down by Fifth Circuit Court of Appeals

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The U.S. Court of Appeal, Fifth Circuit, confirmed a March 15th decision to strike down the U.S. Department of Labor’s (DOL) fiduciary rule. The fiduciary rule is a series of seven different rules that broadly interpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974 (ERISA). The 5th U.S. Circuit Court of Appeals overturned a decision by a Dallas federal court that had upheld the DOL fiduciary rule.

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Supreme Court Ruling on Online Shoppers Sales Tax Could Impact SWF Investing

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In a 5-4 ruling, the U.S. Supreme Court ruled that U.S. states could mandate online shoppers to pay sales tax when they make online purchases. This new ruling overturns a ruling from 1992.

Sovereign wealth funds directly invested at least US$ 9 billion in internet-related retail businesses from January 1, 2015 to March 31, 2018, according to SWFI transaction data. This is not counting fund commitments or funds invested. Sovereign funds have been plowing capital into online mega giants such as Amazon and Expedia, while spending big on e-commerce startups in the United States.

“Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause,” Justice Anthony Kennedy penned in an opinion joined by Justices Clarence Thomas, Samuel Alito, Ruth Bader Ginsburg, and Neil Gorsuch.

“Retailers have been waiting for this day for more than two decades,” the National Retail Federation said in a statement.

Already a number of U.S. states enacted laws mandating online marketplaces to collect sales taxes on behalf of third-party sellers.

The case is South Dakota v. Wayfair, 17-494.

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