Connect with us

Effects of U.S. Currency Depreciation on Sovereign Wealth Funds

Published

on

As the U.S. dollar declines relative to other currencies, many sovereign wealth funds are finding U.S. companies rather inexpensive. Already many sovereign funds, such as the China Investment Corporation (CIC), have taken significant stakes in U.S. brand name financial institutions like Morgan Stanley, while other sovereign funds have invested in technology firms like Advanced Micro Devices Inc (Mubadala Development Company). These deals are average for the sovereign investor and many proclaim they are in these investments for the long-run.

Since many central banks with large current account surpluses are now beginning to emulate private portfolio managers; they are seeking to improve their asset allocation. Sovereign wealth funds are diversifying their portfolios into non-currencies to achieve higher returns rather than holding a depreciating U.S. currency. According to the People’s Bank of China, they had around US$1.7 trillion in foreign reserves in December 2007. This gives the CIC, a SWF to Foreign Exchange ratio of 0.12x (this leaves out SAFE and the Hong Kong Monetary Authority Investment Portfolio) which is low compared to the Abu Dhabi Investment Council’s ratio of 29.54. This ratio entails how large sovereign wealth funds are in size compared to foreign currency reserves.

Continue Reading

Japan’s GPIF Awards Nissay Asset Management with ESG Disclosure Mandate

Published

on

Increasingly asset owners across the Asia-Pacific region are studying the impacts of environmental, social, and governance factors on listed companies. As more Japanese pensions augment asset allocation to listed equities, the importance of corporate non-financial disclosures and practices becomes clear. These disclosures can have a material impression on company stock prices. In addition, Japanʼs Stewardship Code and Corporate Governance Code in 2014 and 2015 were launched, respectively. These codes helped the (environmental, social, and governance) ESG concept gain momentum in Japan.

Japan’s Government Pension Investment Fund (GPIF), the largest public pension fund in the world, awarded a research mandate to Nissay Asset Management Corporation. The mandate entails studying ESG disclosures. The study will conduct a comparable analysis on ESG standards and practices, while taking into account input from both investors and companies. With around US$ 110.5 billion in assets under management, Nissay Asset Management is owned by Japanese life insurance giant Nippon Life Insurance Company.

As GPIF boosted its allocation to domestic equities, the asset owner took a deeper look into the impact of ESG on equity investing. GPIF is keen on improving efficiencies in Japan’s capital markets. GPIF is a universal owner of stocks, similar in some aspects to what Norway’s Government Pension Fund Global (GPFG) does.

Continue Reading

Norges Bank Real Estate Management Buys Central Paris Property

Published

on

Norges Bank Real Estate Management, the real estate unit of Norges Bank Investment Management (oversees Norway Global Pension Fund Global), has signed an agreement to acquire a 100 percent interest in an office property located on 54-56 rue la Boétie in central Paris.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Schlumberger Gets Closer to Eurasia Drilling Company

Published

on

Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and American oilfield services giant Schlumberger (SLB) have planned a deal to invest in Russia’s Eurasia Drilling Company Limited. RDIF CEO Kirill Dmitriev made the announcement. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.