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How Hurricane Harvey Will Impact Sovereign Funds?

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As of August 30, 2017, more than 30,000 Americans remain homeless from the disastrous effects of Hurricane Harvey. An estimated 100,000 homes are thought to have been destroyed or severely damaged by the hurricane and floods. The City of Houston and outlying towns remain impacted, while Texas Governor Greg Abbott commented that the disaster was “far larger” than Hurricane Katrina and Hurricane Sandy. One Moody’s analyst projected the total economic cost to be up to US$ 75 billion – a preliminary figure.

Sovereign wealth funds with exposures to the insurance sector and insurance-related assets are likely to be affected. Sovereign funds have public equity exposure to reinsurance companies. For example, Norway’s Government Pension Fund Global (GPFG) has owns 0.85% of Swiss Re at the end of December 2016. The Norwegian wealth fund also has exposure to logistics properties in Houston with its partnership with Prologis. These properties are: 14931 North Freeway, Houston, TX 77090, 9020 Jackrabbit Rd, Houston, TX 77095, and 9010 W Little York Rd, Houston, TX 77040.

Other investors in Houston real estate include Canada Pension Plan Investment Board (CPPIB). In late June, CPPIB closed a major deal to acquire 100% of Parkway, Inc., a Houston-based real estate investment trust, for US$ 1.2 billion.

Oil Prices

A significant portion of sovereign wealth capital is derived from fossil fuels, thus the price of oil has a direct impact on the growth of sovereign wealth assets. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

CPPIB Tries Out CLO Equity Tranche Investing with Sound Point Capital

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Canada Pension Plan Investment Board (CPPIB) through its wholly-owned subsidiary, CPPIB Credit Investments Inc. (CPPIB Credit), is broadening its portfolio through new investments in equity tranches of collateralized loan obligations (CLOs) alongside experienced CLO asset managers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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CalPERS Names Yu Ben Meng as Chief Investment Officer

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The California Public Employees’ Retirement System (CalPERS) announced that Yu Ben Meng has been selected as the pension fund’s new chief investment officer (CIO). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ontario Nonprofit Network Awards Mandate to OPTrust

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The Ontario Nonprofit Network (ONN), a nonprofit network for the 58,000 nonprofits in Ontario, selected OPTrust to manage defined benefit assets. ONN selected OPTrust Select, the new defined benefit solution from OPTrust. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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