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Friday SWFI News Roundup, June 6, 2014

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Texas Municipal Retirement System Hires 3 Managers for US$ 750 Million for MBS Investing

Austin-based Texas Municipal Retirement System has hired three external managers to invest in residential mortgage-backed securities (MBS) and commercial MBS. Each manager will get to manage US$ 250 million for a total of US$ 750 million toward the mortgage investment strategy. The chosen managers are Ellington Management Group, Voya Investment Management and Marathon Asset Management.

Growth in South Korean Foreign Reserves

The foreign exchange reserves of South Korea elevated to a new high in May 2014, touching US$360.91 billion. According to the Bank of Korea, this was a US$ 5.07 billion increase from April.

Bahrain’s Mumtalakat Generates Profit in 2013

Bahrain’s Mumtalakat Holdings suffered five years of straight losses, mostly due to Gulf Air’s financial performance. In 2013, Mumtalakat generated a net profit of US$ 219 million versus a loss in 2012.

Mahmood al-Kooheji, chief executive of Mumtalakat told Reuters in a recent interview, “We’re out of the red and we’ll not be back there again, God willing.”

PineBridge Investments Raises US$ 140 Million for Sharia-Compliant Real Estate Fund

New York-based PineBridge Investments has raised US$ 140 million for a sharia-compliant real estate fund targeting income producing assets in the Gulf Cooperation Council (GCC) countries. These assets include retail, logistic properties and social infrastructure. Talal Al-Zain, the former CEO of Mumtalakat Holdings, is the current CEO of MENA for PineBridge Investments, running out of Manama. Al Zain expects a final fund closing of US$ 200 million.

GIC Buys Chinese Corporate Debt

Singapore’s GIC Private Limited has been investing in Chinese corporate debt. The sovereign fund purchased US$ 700 million worth of bonds from Lenovo, due 2019 at 4.5%. These bonds were unrated. The GIC also invested US$ 258 million in a note from Tencent Holdings, due 2020 at 3.2%. Typically, sovereign wealth funds rarely allocate such capital to unrated bonds.

New Mexico SIC Invests US$ 75 Million in Real Estate Debt Fund

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Why BlackRock Angled the EU Toward a Massive Supranational Pension Fund

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BlackRock is the world’s largest asset management firm and the company wields tremendous political power whether operating in the United States, Mexico, and parts of Europe. Before the populist wave that led to Brexit, BlackRock bet large in Europe by increasing headcount and lobbying efforts. By 2015, BlackRock CEO Larry Fink proposed the formation of a cross-border personal pension fund for Europe. Fink was keenly aware of the Capital Markets Union project that was revealed in July 2014 by European Union Commission President Jean-Claude Juncker. For BlackRock, why compete in each eurozone country when you can possibly win a mandate for the whole pie of Europe. The European pension fund market is hyper-competitive for asset management firms. Other asset managers like Vanguard have lobbied Brussels over issues like the cross-border distribution of funds, but data shows that BlackRock is far more active than its U.S. peers.

EU’s Definition of PEPP

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Malaysia’s Federal Land Development Authority Seeks to Restructure

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Malaysia’s Federal Land Development Authority (FELDA), a government agency, is looking to restructure its investment holdings in a bid to reduce debt. The restructuring on the real estate side started in the middle of 2017. The government agency wants to lower its debts of 8.03 billion MYR (US$ 1.94 billion) down to 6.5 billion MYR. The restructuring could take over two years.

FELDA is seeking to dispose of assets which includes real estate in London. FELDA is an investor in student housing in London through its main unit called Felda Investment Corporation (UK properties owned by FIC UK Properties Sdn Bhd). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Former Iran Central Bank Governor Banned from Leaving Country

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Iran remains in a very fragile financial state as more Iranian bank loans appear to delinquent, while the currency continues to lose value against the U.S. dollar. State-run Tasnim news agency reported that Valiollah Seif, the former Governor of the Central Bank of Iran, is banned from leaving Iran. Seif is under investigation by the Iranian government over possible corruption in the currency market. Some of the central bank’s deputies have been arrested. Abdolnaser Hemmati replaced Valiollah Seif as central bank governor in July 2018. Valiollah Seif was dismissed from his post as governor.

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