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How a Tesla Buyout Can Happen

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PayPal mafia member Elon Musk revealed via Twitter that Tesla is considering going private. This sent shockwaves in the stock market. It was also discovered that Saudi Arabia’s Public Investment Fund (PIF) had a acquired a sizable stake in Tesla in a series of open market transactions through JPMorgan. Musk did not identify the buyout parties when he tweeted. The provocative tweet prompted a probe by the U.S. Securities and Exchange Commission (SEC). SEC enforcement attorneys in San Francisco have begun gathering information on Tesla; however, this could end up leading to nothing. For the record, Tesla has not been accused of any wrongdoing.

On August 8, 2018, Tesla’s board issued a statement (Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch), “Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Tesla’s board of directors is analyzing Musk’s offer to take Tesla private at US$ 420 per share. Musk could be asked to recuse himself from the diligence process. Musk had discussed about funding a buyout to the PIF. Elon Musk has a few things on his side such as excessive dry powder in private equity, a sizable personal stake in Tesla, and a relatively low interest rate environment. In addition, sovereign funds and pension funds like CPPIB are trying to find environmental investments with promise and commercially viability.

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Norway GPFG Would Prioritize Value in Tesla Stake

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Sovereign wealth fund giant Norway Government Pension Fund Global (GPFG) is an investor in Tesla, holding a 0.48% stake at the end of 2017. GPFG owns roughly 1.4% of all globally listed company shares, minus stocks from its exclusion pool. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Anbang Insurance Set to Sell its US Luxury Portfolio

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Distressed Beijing-based holding company Anbang Insurance Group is set to sell its U.S. luxury hotel properties, which were purchased for US$ 5.5 billion from the Blackstone Group in 2016. This is a move to raise quick cash, following the firm’s seizure at the hands of the Chinese government six months ago. Bids had already been ongoing for selected properties, including the famed Essex House Hotel, overlooking Manhattan’s Central Park. The portfolio of hotels is strategically placed in geographically diverse regions, including Miami and Chicago. Anbang is looking to cash in on the properties quickly, as its properties in China are already being liquidated. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norway GPFG Returns 1.8% for Second Quarter of 2018

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Norway’s Government Pension Fund Global (GPFG) returned 1.8% for the second quarter of 2018. Listed equity investments generated a 2.7% return for the period, while fixed income returned 0%. Unlisted real estate investments posted a 1.9% return for the second quarter. In addition, the Norwegian krone depreciated against the U.S. dollar during the quarter. Furthermore, 2 billion NOK was withdrawn from the fund.

“North American and European stocks had a positive development in the quarter despite the prospect of increased trade barriers. This made a positive contribution to the fund’s return,” says Trond Grande, Deputy CEO of Norges Bank Investment Management, according to the press release.

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