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GIC Private Limited Embarks on a New Framework for Investing

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Lim Siong Guan, Group President of GIC Private Limited

Lim Siong Guan, Group President of GIC Private Limited

In 2012, Singapore’s GIC traversed on a path to analyze their investment framework. The underlying mission was how the Singapore sovereign fund could maintain to reap long-term real returns in a complex investment world. Certainly, the global financial crisis weighed in on their decision to change their beliefs and philosophy on investing. Taking a step back, during the first two decades of the GIC’s existence, the sovereign wealth fund focused on liquidity. With the Cold War still intact, the fund was relatively conservative compared to many public pensions. In the 2000s, the GIC had amassed enough sovereign wealth to increase their risk tolerance. Looking abroad, they chose to embrace the endowment model of investing. Even though they never achieved a total allocation copy like David Swensen from Yale’s endowment, they made major inroads in private equity and illiquid holdings.

Today, the GIC is involved in mega buyout deals.

In any case, on April 1, 2013, a new framework was agreed upon and implemented – creating a reference portfolio. The reference portfolio is 65% global stocks and 35% global bonds. In the same hemisphere, the New Zealand Superannuation Fund (NZSF) is another sovereign wealth fund that has adopted the reference portfolio under Adrian Orr. For the NZSF, currently the breakout is 70% global stocks, 5% local stocks, 5% listed real estate and 20% fixed interest.

GIC Policy Asset Mix 2013[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

CDPQ Boosts Stake in Azure Power

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Disclosed on October 17, 2018, Caisse de dépôt et placement du Québec (CDPQ), through CDPQ Infrastructures Asia Pte Ltd., increased its stake in Azure Power Global Limited, a listed Indian solar power producer. CDPQ increased its ownership in Azure Power to 40.3% ownership by a US$ 100 million commitment in a recent capital raise. Post-deal, CDPQ has invested US$ 240 million in Azure Power.

Transaction

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Invesco Lost a Big SWF Equity Mandate

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Invesco celebrated its landmark acquisition to acquire OppenheimerFunds from MassMutual. Invesco faced some outflows on its active management side of the business. In the third quarter of 2018, Invesco had outflows from two sovereign wealth funds, which totaled approximately US$ 2.5 billion. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Sky News Reveals CPPIB Eyeing Gatwick Airport

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Mark Kleinman of Sky News revealed that the Canada Pension Plan Investment Board (CPPIB) is seeking to purchase a stake in Gatwick airport. The transaction could be more than £3 billion GBP, as CPPIB seeks to acquire a 42% in the airport from Global Infrastructure Partners. Furthermore, CPPIB would invest more capital into the airport if the deal goes through.

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