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NBIM Proposes Major Changes to SWF Bond Portfolio

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Yngve Slyngstad

Norges Bank penned a letter to Norway’s Ministry of Finance, “Letter to the Ministry of Finance, 1 September 2017”.

The letter essentially recommended four major changes to the Norway Government Pension Fund Global’s (GPFG) fixed income portfolio.

Four Recommendations.

1. The Bank recommends that a specific currency list is drawn up for the bond index. The currency list must ensure that the index is liquid and investable for the fund. The currency list should consist of US dollars, euros and British pounds.

2. The Bank’s recommendation is that the benchmark index for bonds should comprise nominal government bonds issued in currencies on a currency list.

3. The maturity of the bond index should be managed. We recommend setting an upper limit for maturity of around ten years for bonds included in the index. A shorter maturity will help reduce uncertainty about the fund’s volatility.

4. A portfolio equal to the current bond index is sufficiently liquid given the fund’s liquidity needs. The Bank’s recommendations in this letter may improve liquidity further, and so we believe that there is no need to amend the management guidelines in this area.

Source: Letter to Ministry of Finance, 1 September 2017.

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PSP Investments and Blue Sky Alternative Investments End Strategic Partnership Agreement

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Blue Sky Alternative Investments Limited informed Canada’s Public Sector Pension Investment Board (PSP Investments) that it agreed to terminate its strategic agreement effective March 31, 2019. In December 2017, Blue Sky Alternative Investments forged an agreement with PSP Investments to assist in committing capital in a number of agricultural investments.

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Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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