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Illinois Gov. Faces Legal Pushback on Pension Reform

On December 27, a group of eight members of the Illinois Retired Teachers’ Association filed a class action lawsuit in Cook County Circuit Court seeking to void an amendment limiting pension benefits set to go into effect on June 1, 2014.

The eight, through law firm Tabet DiVito & Rothstein LLC, argue that Public Act 98-0599, which was approved by the state legislature and signed into law by Illinois Governor Pat Quinn, would violate what is known as the Pension Protection Clause of the Illinois Constitution. The clause, which was ratified in the 1970s, states that the benefits of pension or retirement system membership “shall not be diminished or impaired.”

Furthermore, the lawsuit states that the courts have “consistently invalidated amendments to the Pension Code where the result is to diminish benefits,” the lawsuit stated citing the court’s decision of a 1996 case.

The lawsuit states that the new law would impair or diminish pension benefits in three ways: it would lower the rate at which pensions would be calculated, it would raise the retirement age for certain members, and it would impose a new cap on pensionable salaries.

But given the pension’s US$ 100 billion in unfunded liabilities, Governor Quinn is not about to back off a deal that proponents say could save about US$ 160 billion over the next 30 years.

“We believe the new law is as constitutionally sound as it is urgently needed to resolve the state’s pension crisis,” Quinn spokeswoman Brooke Anderson said in a statement.

Ardian Auctions Off €1 Billion in Infrastructure Assets to APG

French private equity giant Ardian has auctioned off an undisclosed stake in a portfolio of European infrastructure assets valued at €1 billion to Dutch asset owner manager APG Investments. APG, which first invested in the portfolio in 2006, plans on buying out partnership interests in the portfolio held by other investors. French multinational insurance firm AXA SA will retain its stake as a co-owner of the portfolio alongside APG, with Ardian staying on as asset manager and advisor. The transaction remains subject to regulatory approval.

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Tribal Council Approves Cherokee Nation Sovereign Wealth Fund Act

Tahlequah, Oklahoma-based Cherokee Nation Tribal Council approved the creation of the Cherokee Nation Sovereign Wealth Fund Act to establish a fund to ensure the continuation of tribal operations and the general welfare of tribal citizens.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Temasek Participates in Series D Round in Chinese Mafengwo Travel Platform

Image Source: Screenshot from Website – December 12, 2017

Chinese social travel platform Mafengwo has raised US$ 133 million in a Series D funding round with aid from new investors, including private equity investor General Atlantic, tourism-centric Ocean Link, the Yuantai Changqing venture capital fund, Hopu Investment Management, and Singapore’s Temasek Holdings. Existing investors Capital Today, Qiming Venture Partners, and Hillhouse Capital also participated in the latest funding round.

Founded in 2010 by chief executive Gang Chen and chief operations officer Gang Lv in 2010, Mafengwo is popular among the Chinese millennial demographic, who use the app to look up travel information and booking services for nearly 60,000 destinations around the world. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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