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How Timor-Leste May Prove Naysayers Wrong

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timor1Emerging from past conflict, the post-colonial nation of Timor-Leste is ushering in a new era to nurture economic vitality. During the nation’s infancy, the country had very little infrastructure and money. On May 20, 2002, independence was restored, as the administration of the United Nations handed over the keys. Nearly a decade later, on December 31, 2012, the United Nations peacekeeping mission in Timor-Leste concluded operations. With a population above one million, the country has been able to grow fast by exporting oil, gas and coffee. Timor-Leste coffee growers can thank Starbucks for being a big buyer of their coffee beans. Excluding petroleum and gas exports, coffee accounts for 90% of the nation’s merchandise exports.

Since 2007, Timor-Leste had an average growth rate of 11.9%. Coupled with low tax rates and abundant natural resources, the young country is on an ambitious path to transform their home from an agriculture-centric to an industrial one by 2030.

The Timor-Leste Petroleum Fund, their oil-based sovereign fund, had a slow start and by 2007 accumulated US$ 1.8 billion. Managed by the Banco Central de Timor-Leste, the fund’s investments are conservative compared to other sovereign funds like the Abu Dhabi Investment Authority or the Kuwait Investment Authority. The 2011 amended Petroleum Fund Law states that the objective of the investment policy is to maximize the risk-adjusted return.

A maximum of 50% of the sovereign fund can be invested in equities.

Fast forward in time with the advances in storage technology and massive investments in energy transportation, the sovereign fund has mushroomed to US$ 13.6 billion – surpassing Botswana’s Pula Fund and Chile’s Pension Reserve Fund. According to the Timor-Leste government, since January 2013, the sovereign fund has increased on average US$ 324 million each month. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

ADIA Seeks to Sell KIC Headquarters

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The Abu Dhabi Investment Authority (ADIA) is seeking to sell the building that houses the headquarters of the Korea Investment Corporation (KIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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BMO and OTPP Test Blockchain Canadian Dollar Debt Deal

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The Bank of Montreal (BMO) and the Ontario Teachers’ Pension Plan (OTPP) participated in a landmark blockchain Canadian-dollar debt transaction. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Just Group Acquires Corinthian Pension Consulting

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Just Group plc acquired a 75% ownership stake in the holding company of Corinthian Pension Consulting Limited (Corinthian Pension Consulting). Operating in the institutional world for over 12 years, Corinthian Pension Consulting provides advisory services to defined-benefit pension scheme trustees and scheme sponsors undertaking bulk scheme exercises. The remaining 25% will be retained by current shareholders of Corinthian Pension Consulting. Robert MacGregor will continue to lead Corinthian Pension Consulting, as its Chief Executive Officer. Furthermore, Corinthian Benefits Consulting Limited and Corinthian Affinity Solutions Limited will continue to operate as before, becoming part of a newly formed holding company, Corinthian Group Holdings Limited.

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