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Hands Off Brazil’s Sovereign Fund for 2013 Possible Shortfall

Contending with a probable ratings downgrade derived from a narrowing 12-month primary budget surplus, Brazilian public officials are seeking new options. Brazil may not be able to reach the year-end budget savings target of 2.3% of gross domestic product – a lowered target from last year. Last week, the Banco Central do Brasil stated the 12-month public sector primary surplus slimmed to R$ 67.89 billion (US$ 29.14 billion) from R$ 74.1 billion.

This is important for Brazilian government bondholders because the primary surplus is used to pay down Brazil’s net public sector debt. Last year, the Fundo Soberano do Brasil (FSB), the sovereign wealth fund of Brazil, was used to cover the budget shortfall. R$ 12.5 billion was moved from the FSB to the National Treasury – some economists perceived it as a masking technique. On December 4, 2013, Brazilian Treasury Secretary Arno Augustin made it clear that the FSB will not be tapped to fund any possible shortfall in the meeting of the budget surplus target for 2013. Brazil’s sovereign wealth fund was intended for being a stabilization reserve for the budget and foreign exchange rates. In addition, the sovereign fund had the option to take strategic investments in Brazilian companies.

Ardian Auctions Off €1 Billion in Infrastructure Assets to APG

French private equity giant Ardian has auctioned off an undisclosed stake in a portfolio of European infrastructure assets valued at €1 billion to Dutch asset owner manager APG Investments. APG, which first invested in the portfolio in 2006, plans on buying out partnership interests in the portfolio held by other investors. French multinational insurance firm AXA SA will retain its stake as a co-owner of the portfolio alongside APG, with Ardian staying on as asset manager and advisor. The transaction remains subject to regulatory approval.

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Tribal Council Approves Cherokee Nation Sovereign Wealth Fund Act

Tahlequah, Oklahoma-based Cherokee Nation Tribal Council approved the creation of the Cherokee Nation Sovereign Wealth Fund Act to establish a fund to ensure the continuation of tribal operations and the general welfare of tribal citizens.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Temasek Participates in Series D Round in Chinese Mafengwo Travel Platform

Image Source: Screenshot from Website – December 12, 2017

Chinese social travel platform Mafengwo has raised US$ 133 million in a Series D funding round with aid from new investors, including private equity investor General Atlantic, tourism-centric Ocean Link, the Yuantai Changqing venture capital fund, Hopu Investment Management, and Singapore’s Temasek Holdings. Existing investors Capital Today, Qiming Venture Partners, and Hillhouse Capital also participated in the latest funding round.

Founded in 2010 by chief executive Gang Chen and chief operations officer Gang Lv in 2010, Mafengwo is popular among the Chinese millennial demographic, who use the app to look up travel information and booking services for nearly 60,000 destinations around the world. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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