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Is Vietnam the Next Logistics Play for Large Asset Owners?

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Private equity firm Warburg Pincus LLC is investing once again in Vietnam’s burgeoning commercial property market, this time via a US$ 200 million partnership with state-owned infrastructure developer Becamex IDC Corporation. The new joint venture, dubbed the BW Industrial Development JSC, will leverage Becamex’s local expertise and sizable land bank to build institutional-grade logistics and industrial properties throughout the rapidly growing Southeast Asian country’s key economic zones.

Established in 1976, Becamex is owned by the local government of Vietnam’s Binh Duong province and manages one of the largest industrial land banks in the country. The company’s portfolio of 10 industrial parks spans nearly 20,000 hectares, and has attracted more than US$ 6.3 billion worth of investment projects from more than 24 countries, according to its website. Becamex has worked with a number of international partners over the years, most notably with Temasek-sponsored Sembcorp Industries on the creation of the Vietnam Singapore Industrial Park Joint Venture Co. (VSIP) platform, which has facilitated over US$ 10 billion worth of investments since its launch in 1996.

Becamex’s much-anticipated debut on the Ho Chi Minh Stock Exchange fell flat last December after selling only 6% of offered share volume to strategic investors. The poor showing was thought to be brought on by Becamex’s highly leveraged position, and a lackluster marketing campaign from the Binh Duong People’s Committee, which retained 51% in the company. State-owned enterprises in Vietnam – many of which operate under razor-thin profit margins – have struggled to attract private investors amid concerns about vested interests.

Good Morning, Vietnam

Home to one of the fastest growing economies in the world with reported gross domestic product (GDP) growth of 6.8% in 2017, Vietnam has become an increasingly popular destination for logistics and manufacturing facilities, and international investors have begun to notice. Foreign direct investment (FDI) in Vietnam reached a record high of US$ 36 billion in 2017, a 40% increase compared to the year previous; while, the country’s manufacturing and processing industry was the lead breadwinner among Vietnam’s major industries, accounting for 40% of total FDI in 2017.

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Japan’s GPIF Awards Nissay Asset Management with ESG Disclosure Mandate

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Increasingly asset owners across the Asia-Pacific region are studying the impacts of environmental, social, and governance factors on listed companies. As more Japanese pensions augment asset allocation to listed equities, the importance of corporate non-financial disclosures and practices becomes clear. These disclosures can have a material impression on company stock prices. In addition, Japanʼs Stewardship Code and Corporate Governance Code in 2014 and 2015 were launched, respectively. These codes helped the (environmental, social, and governance) ESG concept gain momentum in Japan.

Japan’s Government Pension Investment Fund (GPIF), the largest public pension fund in the world, awarded a research mandate to Nissay Asset Management Corporation. The mandate entails studying ESG disclosures. The study will conduct a comparable analysis on ESG standards and practices, while taking into account input from both investors and companies. With around US$ 110.5 billion in assets under management, Nissay Asset Management is owned by Japanese life insurance giant Nippon Life Insurance Company.

As GPIF boosted its allocation to domestic equities, the asset owner took a deeper look into the impact of ESG on equity investing. GPIF is keen on improving efficiencies in Japan’s capital markets. GPIF is a universal owner of stocks, similar in some aspects to what Norway’s Government Pension Fund Global (GPFG) does.

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Norges Bank Real Estate Management Buys Central Paris Property

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Norges Bank Real Estate Management, the real estate unit of Norges Bank Investment Management (oversees Norway Global Pension Fund Global), has signed an agreement to acquire a 100 percent interest in an office property located on 54-56 rue la Boétie in central Paris.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Schlumberger Gets Closer to Eurasia Drilling Company

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Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and American oilfield services giant Schlumberger (SLB) have planned a deal to invest in Russia’s Eurasia Drilling Company Limited. RDIF CEO Kirill Dmitriev made the announcement. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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