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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. ]

PSP Investments and Blue Sky Alternative Investments End Strategic Partnership Agreement

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Blue Sky Alternative Investments Limited informed Canada’s Public Sector Pension Investment Board (PSP Investments) that it agreed to terminate its strategic agreement effective March 31, 2019. In December 2017, Blue Sky Alternative Investments forged an agreement with PSP Investments to assist in committing capital in a number of agricultural investments.

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Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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