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Friday SWFI News Roundup, September 19, 2014

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Scotland Votes “No” for Independence

According to the BBC, results for Scottish independence from the United Kingdom show that 55.3% of the people voted “NO”. 44.7% of people voted “YES” for Scottish independence. The question remains if there will ever be a Scottish sovereign wealth fund.

Institutional Capital Moves into Mexico for Energy

Sierra Oil & Gas S. de R.L. de C.V. , Mexico’s first independent exploration and production, has raised equity commitments of US$ 525 million. The Mexico City based company raised money from EnCap Investments and firms Riverstone Holdings LLC, each committing US$ 225 million. Infraestructura Institucional (I2), Mexico’s largest infrastructure private equity firm has committed US$ 75 million. The company is headed by Ivan Sandrea and has assembled a team of executives from Statoil, BP, OPEC and Energy Intelligence.

Texas Teacher Retirement System Allocates US$ 765 Million to Real Asset Opportunities

Real Estate and Infrastructure Allocations

Fund/Vehicle Name Manager Allocation
Morgan Stanley (MS) Infrastructure II Morgan Stanley Infrastructure US$ 250 million
Morgan Stanley Infrastructure Sidecar II Morgan Stanley Infrastructure US$ 100 million
CBRE Strategic Partners U.S. Value 7 CBRE Global Investors US$ 200 million
Grosvenor 2014-2 RE Investment Series Grosvenor Capital Management US$ 100 million
U.K. Co-Invest Starwood Capital Group US$ 50 million
Meadow Real Estate Fund III Meadow Partners US$ 40 million
Savanna Real Estate Fund III   US$ 25 million

 

Texas Teacher Retirement System Allocates US$ 1.1 Billion to 9 PE Opportunities

The Texas Teacher Retirement System has allocated US$ 1.1 billion to 9 private equity opportunities.

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Should Pension Giants Still Back Low-Vol Strategies?

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As occidental central banks cautiously signal a retreat from loose monetary policy, will there be greater bouts of volatility in the near future? The low-volatility trade has worked like magic – post the global financial crisis.

The early February sell-off rankled the feathers of U.S. pension trustees, sending plausible-sounding studies in low-vol strategies to the toilet. CBOE’s Volatility Index, or VIX, closed high during the period of market mayhem. For CIOs, should the selling of volatility continue, or should the trade be nixed?

Selling risk or volatility has been profitable for a cadre of U.S. pensions as they sought yield in a low interest rate world of quantitative easing. The falling of interest rates to near zero, zero and even negative in some countries, forced asset owners to rethink yield strategies to help pay for liabilities such as pensions, insurance claims or college expenditures. Public pension funds in the United States and even in Europe have augmented investment proportions in real estate, credit and private equity at the expense of lower-yielding bond instruments over the past 20 years. Investment giants like CPPIB and the Abu Dhabi Investment Council have participated in selling off risk via investments in the reinsurance industry, while smaller pensions have utilized option strategies.

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Temasek Invests in Shaver Company Harry’s

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Harry’s, the subscription shaving company that is taking on companies such as Gillette, which is owned by the multi-national corporation Procter & Gamble, has raised US$ 112 million in a new round of financing.

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New CEO at Dubai Holding

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In early February, Dubai Holding LLC, an entity that once oversaw an aggressive Dubai International L.L.C. buyout player, hired a new chief executive officer. Dubai Holding hired Amit Kaushal as CEO, who replaces Edris Alrafi.

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