Legal Games End up Forcing BNY Mellon to Partially Freeze Kazakh SWF Assets
A series of complicated legal battles in multiple jurisdictions has led to partial assets of a sovereign wealth fund being frozen by a custodial bank. Bank of New York Mellon (BNY Mellon) has frozen US$ 22.6 billion in assets that are held by Kazakhstan’s National Oil Fund. The Justice Ministry of Kazakhstan acknowledged that BNY Mellon had initially decline to freeze assets of the National Fund in response to rulings via the courts in Belgium and the Netherlands. However, on October 30, 2017, BNY Mellon had changed its position and moved to freeze the assets, according to the Justice Ministry of Kazakhstan.
Moldovan businessman Anatolie Stati and his son Gabriel Stati, and two of their companies – Ascom Group, S.A. and Terra Raf Trans Traiding Ltd., are in a multi-year legal war against the Kazakhstan government. The Moldovan businessmen claim they were harassed by the Kazakhstan government to forcibly sell their investments in the country’s oil and gas industry at a below market price. The Kazakhstan government denied the allegations against the Stati parties. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
The United States Treasury is analyzing options on further restricting investments into “sensitive” sectors, such as technology and defense, in the United States from Chinese state-owned capital. The U.S. Commerce Department, under the export control regime, banned U.S. companies from selling parts to ZTE Corporation, a Chinese telecommunications manufacturer, for seven years. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
The Alberta Investment Management Corporation (AIMCo) posted its performance for the 12-month period trailing December 31, 2017, which saw its overall assets grow by 8.4% – or C$ 8.0 billion (US$ 6.1 billion) – to C$ 103.7 billion (US$ 82.3 billion). This represents returns net-of-fees on its C$ 88.2 billion (US$ 70.3 billion) worth of balanced fund investments in 2017 of 10.4%, against a 9.1% custom benchmark. Established in 2008, AIMCo represents the financial well-being of 32 pension, endowment, government, and specialty funds in the Canadian province of Alberta. This includes the Albert Heritage Fund.
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Mubadala Investment Company’s property arm is preparing to launch a local real estate investment trust (REIT) by 2020, and is currently in talks with several developers for international joint ventures on a plot-by-plot basis that are expected to be finalized in 2018, according to Ali Eid Al Mheiri, executive director of Mubadala Real Estate and Infrastructure. Ali Eid Al Mheiri is also Vice Chairman of ALDAR Properties PJSC and Chairman of Abu Dhabi Finance Company PJSC. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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