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Friday SWFI News Roundup, May 20, 2016



MOODY’S: U.S. Tech Giants Hold Massive Pools of Cash

Ratings agency Moody’s Investors Service put out a study showing that Apple, Microsoft, Alphabet (formerly called Google), Cisco Systems and Oracle are sitting on US$ 504 billion, or 30%, of the US$ 1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015. The cash concentration is higher in 2015 compared to 2014, in which the companies mentioned held 27% of cash and 25% of cash in 2013.

December 2015 – Financial Data – Cash in Billions

    Apple, AAPL, US$ 215.7
    Microsoft, MSFT, US$ 102.6
    Alphabet, GOOGL, US$ 73.1
    Cisco Systems, CSCO, US$ 60.4
    Oracle, ORCL, US$ 52.3

Source: Moody’s Investors Service

CPPIB Posts Lowest Return Since Great Recession

The Canada Pension Plan Investment Board (CPPIB) posted an annual return of 3.4%. This is its lowest rate of return since the Great Recession. CPPIB released its latest annual report.

Korean Investors Buy IZD Tower in Vienna

CBRE Global Investors acquired IZD Tower in Vienna, Austria for Korean separate account institutional clients. The office tower is located in the district of Donau City. The seller is a fund managed by Vienna-based Signa Real Estate Capital Partners.

QIA Interested in Asia Square Tower I

Another sovereign wealth fund is taking a crack at a large Singapore office property. The Qatar Investment Authority (QIA) has expressed interest in the Asia Square Tower 1 in Singapore. The seller is BlackRock.

Hermes Investment Management Buys Out Future Fund’s Stake in Southern Water

Hermes Investment Management, owned by the U.K.’s BT Pension Scheme, acquired a 17% stake in British utility Southern Water that was owned by Australia’s Future Fund. The Future Fund indicated it was looking to dispose of its position in Southern Water. Hermes Investment Management now owns 21% of Southern Water.

STT Buys Large Stake in Data Center from Tata

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How ESG Considerations Can Drive Voting at the Board Level



The Council of Institutional Investor’s spring conference for 2018 – held this week in Washington D.C. at the Omni Shoreham Hotel – was packed with member-hosted panels, where nearly 400 of the top investment professional, regulators, and corporate governance experts gathered together to share their insights and engage in forward-looking discussions on how to drive a multi-stakeholder approach to responsible investment over the long-term.

Sovereign Wealth Fund Institute (SWFI) had the opportunity to attend several breakout sessions, including one presented by Maryland-based Institutional Shareholder Services that sought to address one of the most pressing challenges facing institutional investors today: How can environmental, social, and governance (ESG) criteria help drive voting at the board level? Moderated by Georgina Marshall, Head of Global Research at ISS, panelists provided a diverse array of perspectives on how to harness ESG considerations as an effective decision-making tool.

Player-Coach Model

For Bonnie Saynay, Global Head of Responsible Investments at Invesco, fostering an environment conducive to communication with investment teams using a “player-coach” model is critical. Moreover, Saynay warned investors of thinking too broadly on ESG considerations, and to instead focus in on the criteria that is most important to them as an organization, and to then tailor their stewardship practices to match those priorities: “If everything is important, nothing is important,” she said.

Clare Payne, head of corporate governance for North America at Legal & General Investment Management, highlighted the importance of procuring the latest ranking data from a number of different providers, as well as how to develop one’s own internal system for scoring so as to cut through the clutter and provide a contextualized framework for making investment decisions on your own terms.

Remuneration is the name of the game for Robbie Miles, Vice President and ESG analyst at Allianz Global Investors. Amid the ever broadening scope of influence that responsible investment commands, Miles urged attendees to work with their managers on mandates that link compensation to the long-term performance of the fund, as well as long-term holding periods.

Wrapping up the panel was Stu Dalheim, Vice President of Shareholder Advocacy at Calvert Research Management, advocated for diversity at the board level across a number of different metrics – including ethnicity, gender, and professional backgrounds – in order to reflect the reality of their client base, as well as provide an apparatus for robust debate and adaptation in an ever-changing business environment.

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Macquarie to Buy ValueInvest Asset Management from Fynske Bank



On March 12, 2018, Macquarie Investment Management, the investment management unit of Macquarie Group, revealed a deal that they acquired Luxembourg-based ValueInvest Asset Management S.A. from Denmark-based Fynske Bank A/S. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Federal Reserve Orders ICBC to Tighten AML Policies



On March 12, 2018, the U.S. Federal Reserve issued an enforcement action that the Industrial and Commercial Bank of China Limited (ICBC) is not doing enough regarding anti-money laundering (AML) protections and ordered the Chinese bank to toughen its checks on illicit funds. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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