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Institutional Investors Await Comcast-Time Warner Cable DOJ Outcome

Institutional investors are carefully watching for a signal from regulators and antitrust officials regarding the possible merger block of cable giant Comcast Corporation and Timer Warner Cable Inc. The US$ 45 billion merger was announced in February 2014. In February 2014, Comcast Chief Financial Officer Michael Angelaki said “we are optimistic and feel comfortable” that the merger will close in early 2015. Bloomberg reported that U.S. Department of Justice (DOJ) staff attorneys in the department’s antitrust division were planning on recommending a block to the merger between Comcast and Time Warner Cable. Bloomberg’s sources are anonymous. Reportedly, DOJ attorneys working on the investigation are concerned the merger would create a “nationwide cable giant” that would hurt U.S. consumers. If the DOJ wants to block the merger, they will most likely file a federal lawsuit.

Streaming entertainment services like Netflix and Hulu have put enormous pressure on cable companies like Comcast.

Institutional Investors and Sovereign Wealth

Large institutional investors like Dodge & Cox, Wellington Management and Fidelity Investments are top ten holders of Comcast according to December 2014 filings. As of December 31, 2014, Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, possessed 36,280,000 shares of Comcast – 1.7% of shares outstanding. On April 17th, Comcast opened at US$ 59.10 per share. Assuming NBIM’s shares remained constant since December 31, 2014, the wealth fund has a US$ 2.14 billion exposure to Comcast.

Asian Sovereign Funds Not Slowing Down on Tech Investing

According to data from SWFI’s Sovereign Wealth Fund Transaction Database, Asian sovereign funds invested US$ 6.05 billion directly into companies and assets in the information technology sector from Jan 2017 to November 22, 2017. In a comparable time frame from Jan 2016 to November 22, 2016, this same group of Asian sovereign funds directly invested US$ 5.02 billion in the sector. These are direct investments, not fund commitments or manager allocations.

Asian sovereign funds such as GIC Private Limited, Temasek Holdings and the Korea Investment Corporation (KIC) have demonstrated bullish signals to the technology community over other sectors. GIC and Temasek have also been major investors in the private side of deals, funding a wide range of tech startups, while providing financial firepower in buyout transactions.

Some notable direct tech investments in 2017 by sovereign funds include Meituan-Dianping, SoundCloud, Nets A/S, Visma AS, Turn, Inc. and Vantiv.

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Future Fund Makes a Guardian Out of Former J.P. Morgan ANZ Chair

The Australian government has appointed Robert Priestley – current non-executive chair of J.P Morgan for Australia and New Zealand (ANZ) and a non-executive director of ASX – to serve on the Future Fund Board of Guardians for a five-year term from November 7, 2017. Priestley replaces former Morgan Stanley Australia chief executive Steven J. Harker.

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Associated British Ports Reboots Property Development Arm to Capitalize on Land Bank

Associated British Ports (ABP) – operator of 21 major ports throughout the United Kingdom – has announced a reboot of its ABP Property division, complete with a new team of specialists in commercial development and logistics led by Huw Turner, in order to identify and develop strategically significant locations in its 2,372 acre land bank.

ABP is owned in large part by a consortium of pensions and sovereign funds, including the Canada Pension Plan Investment Board (CPPIB) at 33.88% ownership, OMERS at 30%, Singapore’s GIC Ventures Pte Ltd at 20.00% ownership, and the Kuwait Investment Authority at 10.00% ownership. Large institutional investors such as sovereign funds, pensions, and endowments have slowly increased allocation towards infrastructure over the past six years as an alternative to equities and bonds, according to asset allocation data from SWFI.

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