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Friday SWFI News Roundup, May 22, 2015

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Wealth Fund Commits to Mezzanine Fund

The Alaska Permanent Corporation (APFC) allocated US$ 50 million to Audax Mezzanine Fund IV, an alternative credit fund. The sovereign fund has a 2.5% allocation to private credit.

AIIB to Allow Non-Asian Countries to Bank’s Board

The Asian Infrastructure Investment Bank (AIIB) will have a director from Germany on the bank’s board of directors. This is according Michael Clauss, Germany’s Ambassador to China. The United States has tried to rally Western allies away from joining the AIIB. Besides the U.S., Western allies Japan and Canada have not joined the AIIB.

CPPIB Post 18.3% Return for FY 2014-2015

CPPIB earns C$ 40.6 billion in net investment income for Fiscal Year 2014-2015. Returns generated for the period are 18.3%, leaving the fund with C$ 264.6 billion in assets on March 31, 2015.

Harvard Invests in Sandalwood Plantation

Harvard Management Company, the manager of Harvard University’s endowment, has invested approximately US$ 40 million for an interest in a sandalwood plantation in Northern Territory, Australia. This was reported May 14, 2015. The 399 hectare plantation grows Indian sandalwood (Santalum album). Sandalwood has many uses such as combating the skin condition acne and for fragrances. The plantation is 150 kilometers south of the city of Darwin and is operated by Tropical Forestry Services (TFS). Tropical Forestry Services sells sandalwood oil to Nestle-owned Galderma, as the commodity price leaped to US$ 4,500 per kilogram in 2014.

Stephen Sexauer to Lead Investments at San Diego County Employees’ Retirement Association

The US$ 10.6 billion San Diego County Employees’ Retirement Association (SDCERA) has hired Stephen Sexauer as the pension’s new chief investment officer. Previously, Sexauer was Chief Investment Officer of the U.S. multi-asset team at Allianz Global Investors. Sexauer will start his new job on May 29. Before Allianz Global Investors, he was a portfolio manager at Morgan Stanley.

Khazanah Nasional Leads Round in General Fusion

On May 19, B.C.-based General Fusion raised another round, this time at US$ 27 million. Founded in 2002, General Fusion will use the capital for research purposes. The company is attempting to harness fusion power. General Fusion expects to have a large-scale prototype, needing two more years. Since 2002, General Fusion has raised over US$ 100 million. Leading the latest round is Malaysia’s Khazanah Nasional. Other investors are Chrysalix Energy Venture Capital, Bezos Expenditions, Cenovus Energy, Growthworks, and Braemar Energy Ventures.

Linzor Capital Raises US$ 621 Million for Third Fund

Linzor Capital Partners closed, Linzor Capital Partners III, for US$ 621 million. The pan-Latin American fund will target middle market companies mostly in Mexico, Chile, Colombia, Peru and Argentina. The Monument Group served as the placement agent.

CPPIB and BC Partners Agrees to Sell Major Stake in Suddenlink to Altice

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JPMorgan Sells Stake in Saudi Investment Bank

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JPMorgan Chase & Co. is one of the largest foreign banks in Saudi Arabia. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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What Will BlackRock Look Like in 2030?

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Will BlackRock, currently the world’s biggest asset manager, be around in 10 years, or be overtaken in the exchange-traded fund market by tech companies like Amazon or Alibaba? Amazon is already in the online lending game. Amazon CEO Jeff Bezos once said, “Your margin is my opportunity.” Will Laurence “Larry” Fink still be CEO or at least Chairman of BlackRock? A lot can happen. BlackRock’s Aladdin is rubbing the lamp, calling on a genie to make its third final wish.

Over the past decade, BlackRock and the élite asset management community benefitted handsomely from central bank measures such as quantitative easing, with the rapid creation of money flowing into listed equity markets. At the end of 2017, BlackRock topped US$ 6.29 trillion in assets under management, rivaling nearly the size of the whole sovereign wealth fund market. Can BlackRock get any bigger or at least reach US$ 10 trillion in assets by 2030? This open-ended question can be answered in many ways, but factors such as market access to China, India and Southeast Asia will be crucial for BlackRock. In fact, SWFI research sees the Asia-Pacific region growing faster than the global AUM rates. BlackRock could be missing out on China, as players like Ant Financial offers products such as Yu’e Bao (Chinese for leftover treasure), a money market fund that was pushed out in June 2013 permitting Alibaba customers to use money leftover in their Alipay accounts.

By 2030, the United Nations predicts planet Earth will have 8.5 billion residents (more potential investors) and by then many of these grandeur Middle Eastern vision plans will be complete. Sovereign funds could be commanding nearly US$ 20 trillion in assets. Next, corporate boards across the United States, Europe and Asia might have all-but-embraced some form of globally-recognized ESG standards by nudging from CalPERS, BlackRock and the Swedish buffer funds.

BlackRock Will be Bloomberg

As incumbent financial industry consultants analyze products, regulatory changes and asset flow patterns, many are missing out on BlackRock’s not-so-secret weapon. As certain financial products and services become cheaper, a key differentiating factor for these firms is technology which can reduce labor costs, improve services and reduce execution risks. In an uncompromising fashion, BlackRock continues to push its Aladding solution on new and current clients in a bid to make quitting harder, while deriving more data insights from its octopus-like client reach. Armed with eleven data centers and more than 30,000 Aladdin users, BlackRock desires to ingrain itself into the workflow of every asset owners – small or big – knowing full well that ETFs and fund mandates can be lost in a whim. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ascendas-Singbridge Acquires Three Hotels in Osaka

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Singapore’s Ascendas-Singbridge has acquired three hotels in Osaka for 10.29 billion JPY to tap tourism growth in Japan’s third-largest city.

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