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Korea’s SWF Posts 11.83% Return for 2012

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The Korea Investment Corporation (KIC) posted an 11.83% return on investment for 2012. The KIC topped the benchmark yield of 11.17%. The KIC posted a net asset value of $56.6 billion for 2012.

The negative effects of deleveraging in developed economies have lowered return expectations for sovereign funds and some public investors.

Sovereign funds have generally low expectations for fixed income and some equity markets for the next couple of years, which show the move towards alternative asset classes like real estate and private equity.

Exposure in private markets for the KIC is targeted toward 20 to 25%. In July 2009, the KIC launched their indirect private market program, which allowed investments in private equity, real estate, infrastructure, and hedge funds. Almost a year later in June 2010, the direct investment program was pushed forward, allowing the KIC to pursue direct energy and natural resource cross border deals. Some overseas deals in 2012 include purchasing landmark real estate in Europe.

In 2005, the Korea Investment Corporation was established to manage a portion of Korea’s foreign reserves and to contribute to the development of Korea’s domestic finance industry. The KIC is prohibited by law from investing in Korean assets.

SWFI First Read, September 21, 2018

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U.S. Public Becomes More Aware that Gmail Scans Emails

Alphabet is a major stock holding for sovereign wealth funds and large pensions. Search giant Google is under fire for allowing third-party partners and companies, like Return Path Inc and other advertisers, to share data from Gmail accounts. Many experts and tech observers already knew this, but more people in the public are becoming aware of Google’s practices when it comes to privacy. Google disclosed in a letter to U.S. lawmakers this finding. The Wall Street Journal reported that in some instances, app companies were able to read people’s emails in order to improve their algorithms. In 2017, Google said they would stop scanning all of one’s Gmail messages for the goal of personalized ads.

GPIF Infrastructure Exposure Almost Reached 200 Billion Yen in March 2018

Japan Government Pension Investment Fund’s (GPIF) exposure to infrastructure real estate was 196.8 billion JPY at the end of March 2018. At that period, 57% of the exposure was to the UK, 15% was to Australia, 15% to Sweden, 10% to Spain and 3% to Finland. 21% of GPIF’s infrastructure portfolio was linked to airports versus 27% to ports.

AIMCo-backed sPower Closes $498.7 Million Bond Deal

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Iceland Contemplates a Sovereign Wealth Fund

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The Government of Iceland is looking to possibly form a sovereign wealth fund to stabilize the country from unforeseen shocks to the national economy. The Iceland government released a statement saying, “The state’s contributions to the Fund will be equivalent to new revenues from publicly owned power production companies which are expected to accrue in the coming years.”

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CBRE Global Wins First GPIF Global Real Estate Mandate

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Japan Government Pension Investment Fund (GPIF) awarded its first global real estate mandate by hiring CBRE Global Investment Partners Limited. This is a global core real estate fund-of-funds separate account. Overseeing this mandate as a gatekeeper is Asset Management One Co., Ltd., which is a unit of Mizuho Financial Group. This RFP was launched in April 2017.

CBRE Global Investment Partners is the multi-manager arm of CBRE Global Investors.

In addition, on August 8, 2018, GPIF hired two custodians for short-term investments. These custodians are Trust & Custody Services Bank, Ltd and The Master Trust Bank of Japan, Ltd.

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