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Korea Investment Corporation says has gone underweight on euro assets

Scott Kalb

According to Reuters, ” Korea Investment Authority, South Korea’s $35-billion sovereign wealth fund, has reduced exposure to euro zone equity and fixed income investments and is now underweight on assets in the region, the fund’s top official said on Thursday.

“We are very worried about what’s going on in Europe. I don’t think the austerity measures (adopted by some of the euro zone countries) will be enough. I think they will have to do some debt rescheduling,” said Scott Kalb, chief investment officer at the sovereign wealth fund known as KIC.

Kalb spoke at a forum sponsored by The Korea Society. Kalb, however, said the fund is not shorting the euro but trimming its investments in the region from what he thought was a substantial exposure. The KIC official said Europe has “an artificial union” with Germany as the principal backer.

“We’re kind of shocked that Germany seems to have stepped away.” Germany came under fire at the height of the Greek debt crisis after it seemed the euro zone’s largest economy was reluctant to bail out Greece.

It did eventually vote to assist Greece and other indebted euro zone nations via a $1-trillion safety net, but not before widespread criticism from other euro zone countries and global investors. More recently, Germany got flak after it announced plans for 80 billion euros in budget cuts over the next four years.”

Read more: Reuters

Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

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bcIMC Buys into Bottling Business with PAI in €1.623 Billion Takeover of Refresco

Dutch soft-drink bottler Refresco Group N.V. has agreed to a buyout offer for all 81.2 million of its shares from French private equity firm PAI Partners SAS (PAI) and Canadian pension manager British Columbia Investment Management Corporation (bcIMC) in exchange for €20 in cash per ordinary share for a total consideration of €1.623 billion. Refresco’s major shareholders, which includes 3i Group, and shareholding members of its boards, who represent 26.5% of outstanding shares, have said they stand behind the deal.

Refresco’s board rejected an initial offer from PAI in April 2017 of €1.4 billion, which they felt did not adequately capture the value added by their plans to bolster its presence in North America through the acquisition of Canadian bottler Cott TB, a deal that went through in July for US$ 1.25 billion.

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Digital Insurance Distributor BGL Opts for CPPIB Money Over IPO

Canada Pension Plan Investment Board (CPPIB) is investing £675 million (US$ 895.715 million) for a 30% stake in Peterborough-based BGL Group, a digital distributor of insurance and household financial services to 8.5 million customers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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