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Most Popular Overseas Office for Sovereign Funds

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Despite the current gloom of equity markets and a “never-ending” low-yield environment, sovereign investors are continually seeking new markets to tap into. As sovereign wealth funds and large pensions grow in assets under management and expand geographic portfolio diversification, the need to open up an overseas office to source investments becomes real. Sovereign funds have been the most aggressive institutional investor class of opening up offices overseas compared to public pensions. This is to also say that Canadian public pension investors clearly buck the trend of pensions and have opened up offices in places like Singapore, London and Hong Kong. Which cities have the most outposts for sovereign funds and pensions? Which cities tend to be the first overseas office for wealth funds? These questions are not only important for the host countries but for asset managers and investment banks for planning purposes.

See the Full Ranking – Sovereign Wealth Funds and Pensions – Overseas Offices

The Winners

SWFI conducted a research study on which cities attract the most large public investors to open an overseas office, splitting groups into wealth funds and all funds (sovereign funds, pensions, etc.) The results were fascinating and quite telling. For sovereign wealth funds, the most popular city was London, followed by New York and then Beijing at number three. Keep in mind, in the study, SWFI did not count the headquarters of the wealth fund or companies that it controlled that were not strongly tied to the parent entity. Hong Kong, Singapore and Mumbai quickly take the next spot for both all funds and wealth funds. San Francisco is also thrown into that cohort. The fascinating part to take from this is that public institutional owners have clearly favored London, but have also chosen Asia as a prime destination for future investments. Furthermore, the reason of wealth funds and pensions barely selecting Beijing over Shanghai and Hong Kong could illustrate the Chinese government’s influence in major industry decisions.

Overseas Office Ranking

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JPMorgan Sells Stake in Saudi Investment Bank

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JPMorgan Chase & Co. is one of the largest foreign banks in Saudi Arabia. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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What Will BlackRock Look Like in 2030?

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Will BlackRock, currently the world’s biggest asset manager, be around in 10 years, or be overtaken in the exchange-traded fund market by tech companies like Amazon or Alibaba? Amazon is already in the online lending game. Amazon CEO Jeff Bezos once said, “Your margin is my opportunity.” Will Laurence “Larry” Fink still be CEO or at least Chairman of BlackRock? A lot can happen. BlackRock’s Aladdin is rubbing the lamp, calling on a genie to make its third final wish.

Over the past decade, BlackRock and the élite asset management community benefitted handsomely from central bank measures such as quantitative easing, with the rapid creation of money flowing into listed equity markets. At the end of 2017, BlackRock topped US$ 6.29 trillion in assets under management, rivaling nearly the size of the whole sovereign wealth fund market. Can BlackRock get any bigger or at least reach US$ 10 trillion in assets by 2030? This open-ended question can be answered in many ways, but factors such as market access to China, India and Southeast Asia will be crucial for BlackRock. In fact, SWFI research sees the Asia-Pacific region growing faster than the global AUM rates. BlackRock could be missing out on China, as players like Ant Financial offers products such as Yu’e Bao (Chinese for leftover treasure), a money market fund that was pushed out in June 2013 permitting Alibaba customers to use money leftover in their Alipay accounts.

By 2030, the United Nations predicts planet Earth will have 8.5 billion residents (more potential investors) and by then many of these grandeur Middle Eastern vision plans will be complete. Sovereign funds could be commanding nearly US$ 20 trillion in assets. Next, corporate boards across the United States, Europe and Asia might have all-but-embraced some form of globally-recognized ESG standards by nudging from CalPERS, BlackRock and the Swedish buffer funds.

BlackRock Will be Bloomberg

As incumbent financial industry consultants analyze products, regulatory changes and asset flow patterns, many are missing out on BlackRock’s not-so-secret weapon. As certain financial products and services become cheaper, a key differentiating factor for these firms is technology which can reduce labor costs, improve services and reduce execution risks. In an uncompromising fashion, BlackRock continues to push its Aladding solution on new and current clients in a bid to make quitting harder, while deriving more data insights from its octopus-like client reach. Armed with eleven data centers and more than 30,000 Aladdin users, BlackRock desires to ingrain itself into the workflow of every asset owners – small or big – knowing full well that ETFs and fund mandates can be lost in a whim. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ascendas-Singbridge Acquires Three Hotels in Osaka

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Singapore’s Ascendas-Singbridge has acquired three hotels in Osaka for 10.29 billion JPY to tap tourism growth in Japan’s third-largest city.

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