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Here’s Why Singapore’s GIC is Expanding Investments in Brazil

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brasilDespite headwinds of a presidential election, higher inflation, and the possibility of deep budget cuts and increased taxes, institutional investors like sovereign wealth funds and pensions are betting on Brazil’s long-term economic viability. For Latin America, sovereign funds are not terrified by short-term volatility. Pensions and sovereign wealth funds center on consumer-oriented companies, counting on middle class expansion. According to World Bank data, in 2005, the poverty headcount ratio in Brazil was 30.8%. In 2009, the ratio lowered to 21.4%. Attractive sectors for public pensions and sovereign funds in Brazil run from, infrastructure, real estate, telecommunications and consumer goods like food.

Lim emphasized opportunities in the larger emerging market countries, advocating the proliferation of supply-side trends.

Being Selective – National Champions

Public asset owners can be selective in their investments, picking national champions in emerging markets. For example, recently Singapore’s GIC Private Limited boosted its stake in BRF to 4.4% from 3.8%, a São Paulo-based food processor. BRF, also known as Brasil Foods, was created by the merger of Perdigão and Sadia and is the world’s 10th biggest food company. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

DENIED: Bank of England Refuses to Release Venezuelan Gold

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“Whoever has the gold makes the rules,” the King famously said in 1964’s comic strip, The Wizard of Id. England is proving the old truism to be accurate. Keynes’ “barbarous relic” is showing tremendous staying power in a world awash in cryptocurrencies and virtual wealth.

Austria, Germany, and the Netherlands have all repatriated gold reserves in recent years, and they can now count Venezuela among the countries attempting to do the same. Venezuela’s government made the decision to repatriate 14 tons of gold bars on the heels of U.S. sanctions. The custodian, the Bank of England, has refused to release the gold, worth a total sum of US$ 550 million, to Caracas. The British are citing anti-money laundering regulations. The specific concern is that Nicolas Maduro may personally seize the gold and use it for personal gain. Washington’s new rules for Venezuela target the country’s gold exports, based on reports of Maduro spending the country’s current precious metals illegally. Venezuela’s economy collapsed when oil revenue plunged. Supplies of food, medicine, and consumer staples were affected. Shortages and hyperinflation have resulted.

National Security Advisor to the United States, John Bolton, labeled Venezuela a member of a “troika of tyranny,” along with Cuba and Nicaragua. Bolton railed against the “triangle of terror stretching from Havana to Caracas to Managua.” He called it “the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere,” Cuba has been accused of assisting the Maduro government. “The Cuban military and intelligence agencies must not disproportionately profit from the United States, its people, its travelers, or its businesses,” Bolton declared. For its part, Nicaragua is in hot water due to a violent crisis that sprung up when President Daniel Ortega announced that there would be changes coming to Nicaragua’s social security system. The U.S. is pushing for free elections.

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RDIF and Makara Capital form Technology Company Investment Joint Venture

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The Russian Direct Investment Fund (RDIF) and Singapore-based Makara Capital, a specialist in transaction financing and asset management, signed a deal to form a US$ 200 million joint investment platform to finance breakthrough innovative projects in Russia and Asia. Ali Ijaz Ahmad, the CEO of Makara Capital, is a board director of the Intellectual Property Office of Singapore (IPOS). Ali Ijaz Ahmad served as an adviser to Morgan Stanley and The Carlyle Group. He also had stints at the World bank and Goldman Sachs. Makara Capital was founded in 2005 as a joint venture with Credit Suisse AG and made independent by its founding partners in 2008.

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SVB Financial Group to Acquire Leerink Holdings

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Linking Boston to the San Francisco Bay Area in the world of pharmaceuticals, SVB Financial Group (SVB) announced that it has entered into a merger agreement to acquire Leerink Holdings LLC, the Boston-based parent company of Leerink Partners LLC, an investment bank focused on the healthcare and life science industries. Jeffrey A. Leerink formed Leerink in 1995. Santa Clara, California-based SVB Financial Group is the parent company of Silicon Valley Bank. SVB is big into life sciences and provides services to many healthcare companies and startups.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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