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Investors Recover $388 Million in JP Morgan MBS Class Action

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After six years of intense litigation, the lead plaintiffs and court-appointed class representatives of Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California recovered hundreds of millions of dollars regarding nine 2007 residential mortgage-backed securities (MBS) offerings issued by JPMorgan Chase & Co. This brings near closure to one of the last remaining MBS purchaser class actions arising out of the global financial crisis. The law firm Robbins Geller Rudman & Dowd LLP helped recover US$ 388 million in the case for investors. On a percentage basis, the settlement represents one of the largest recovered in any of the 16 comparable MBS purchaser class action settlements obtained to date.

On a percentage basis, the settlement represents one of the largest recovered in any of the 16 comparable MBS purchaser class action settlements obtained to date.

The suit was initially pushed by the US$ 2.1 billion Fort Worth Employees’ Retirement Fund. The investors claimed JP Morgan misled them about the risks (credit quality of home loans) of US$ 10 billion worth of residential MBS. After the demise of investment bank Lehman Brothers, the MBS certificates were worth 62 cents or less on the dollar.

JP Morgan denied wrongdoing as part of the accord. The bank argued the underperformance of the investments were due to the economic downturn rather than the specific assets in the portfolio.

The case is Fort Worth Employees’ Retirement Fund v. J.P. Morgan Chase & Co., 09-cv-3701, U.S. District Court, Southern District of New York.

SWFI First Read, May 24, 2018

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Temasek Preps for Astrea IV

A unit of Temasek Holdings is planning to launch Astrea IV, a private equity bond that will have three tranches. One of the tranches is targeted toward retail investors. In total, Astrea IV hopes to be US$ 500 million in size, with a retail tranche worth S$ 242 million.

CONSOLIDATION: FIS Group to Buy Piedmont Advisors

FIS Group agreed to buy Piedmont Investment Advisors. Post-deal, Piedmont will operate as a subsidiary of FIS Group. At the moment, FIS Group oversees roughly US$ 5.6 billion in assets, while Piedmont has approximately US$ 4.7 billion in assets under management.

REPORTS: Funds from Malaysian Central Bank Land Deal Used to Pay for 1MDB Debt Payment

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Norway SWF Votes Down Paris Climate Targets at Shell Shareholder Meeting

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Norges Bank Investment Management (NBIM), which oversees Norway Government Pension Fund Global, voted down a proposal put forward by some investors at Royal Dutch Shell’s annual general meeting calling on the company to set emissions targets in line with the Paris climate accords of 2015. The challenge was shot down by 94.5% of Shell shareholders at Tuesday’s proceedings. Its defeat was followed by a statement from the oil giant calling the resolution “unnecessary” in light of the firm’s plans revealed in November to halve its carbon footprint by 2050. Some investors believe Shell would be in a better position to set their own goals on addressing issues like climate change.

The US$ 1.1 trillion sovereign wealth fund – which is itself reliant on cash-streams from Norway’s hydrocarbon stores – announced last July it would be asking the banks in which it invests nearly a quarter of its equity assets to disclose how their lending contributes to greenhouse emissions, and is currently considering whether to drop its exposures in oil and gas companies constituting roughly 6% of its overall portfolio ahead of a parliamentary vote on the proposed policy change later this year.

The climate change motion was featured by 60 long-term institutional investors representing more than US$ 10 trillion in assets – including HSBC, BNP Paribas, Fidelity, Swedish buffer fund AP7, France’s ERAFP, and the United Kingdom’s National Employment Savings Trust (NEST) – in an open letter published during the week of May 16th by The Financial Times urging fossil fuel companies to “clarify how they see their future in a low-carbon world,” without going so far as to openly support its approval.

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PSP Investments Finished Deal on Equity Stakes in AEA and AELO in Portugal

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On May 11, 2018, ROADIS, which is owned by PSP Investments, finalized the purchase of equity interests in Portugal´s Auto Estradas do Atlantico (AEA) for 50% ownership and Auto Estradas do Litoral Oeste (AELO) for 60% ownership from MSF Group (Moniz da Maia, Serra & Fortunato, Empreiteiros) and Lena Group (known locally as Grupo Lena). This is ROADIS’ first investment into Portugal.

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