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NEXT PHASE: QIA and CITIC Form $10 Billion JV Fund

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Ahmad Al-Sayed

Ahmad Al-Sayed, Chief Executive Officer,
Qatar Investment Authority

For years, Qatar has demonstrated significant interest investing in China whether applying for a quota under China’s QFII scheme, being a cornerstone investor in the Agricultural Bank of China’s IPO or opening an office in Beijing. The Qatar Investment Authority (QIA) penned an agreement with state-owned CITIC Group Corporation to form a US$ 10 billion fund for Asia. The 50:50 joint venture investment fund will help the QIA diversify from excess exposure to European portfolio holdings. This deal follows the central banks of China and Qatar signing a major currency swap deal. In addition, according to the People’s Bank of China, one of China’s 4 major banks, Industrial and Commercial Bank of China has been chosen to clear all yuan trades in Qatar.

View the Institutional Investor Profile of the Qatar Investment Authority

CEO Ahmed Al-Sayed of the QAIA told reporters at an investment conference in Beijing, ” We’ve just done a deal in Europe, and we’ll continue doing deals in Europe.”

He then added, ” But as a global fund, also we need to diversify asset allocations and geographical location but we will continue in Europe, of course.”

The QIA is seeking to invest between US$ 15 billion to US$ 20 billion in Asia over the next 5 years. The QIA is growing its Beijing office, and is looking at investments in real estate, infrastructure and healthcare in China. By partnering with state-backed Chinese investment companies, the QIA will be exposed to greater deal flow.

In August 2012, Qatar Holding, a sovereign wealth enterprise of the QIA, acquired a 22% stake in CITIC Capital Holdings. Qatar is looking for greater exposure in the Chinese alternative space.

BMO and OTPP Test Blockchain Canadian Dollar Debt Deal

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The Bank of Montreal (BMO) and the Ontario Teachers’ Pension Plan (OTPP) participated in a landmark blockchain Canadian-dollar debt transaction. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Just Group Acquires Corinthian Pension Consulting

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Just Group plc acquired a 75% ownership stake in the holding company of Corinthian Pension Consulting Limited (Corinthian Pension Consulting). Operating in the institutional world for over 12 years, Corinthian Pension Consulting provides advisory services to defined-benefit pension scheme trustees and scheme sponsors undertaking bulk scheme exercises. The remaining 25% will be retained by current shareholders of Corinthian Pension Consulting. Robert MacGregor will continue to lead Corinthian Pension Consulting, as its Chief Executive Officer. Furthermore, Corinthian Benefits Consulting Limited and Corinthian Affinity Solutions Limited will continue to operate as before, becoming part of a newly formed holding company, Corinthian Group Holdings Limited.

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President Trump Asks SEC to Review Semi-Annual Corporate Reporting

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U.S. President Donald Trump is giving a possible gift to long-term institutional pension funds and sovereign funds that clamor for “long-termism” when it comes to publicly-traded companies. Many large Canadian pension funds, like CPPIB, have decried that listed companies operate in short-termism earnings philosophy, trying to focus on a quarter by quarter basis. BlackRock’s CEO Larry Fink has publicly heavily opined on short-term corporate think on quarterly earnings. Listed company CEOs are heavily incentivized to produce strong quarterly earnings, which is often linked to corporate compensation.

President Trump requested the U.S. Securities and Exchange Commission (SEC) to study the impact of allowing companies to file reports in a six month time framer versus the traditional quarterly time frame.

On Twitter, President Trump tweeted, “In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!”

Listed companies in the U.S. are required to file earnings reports every quarter. This move could reduce filings to two times per year. The investor community is divided as long-term institutional investors typically want companies to report less, while other investors favor more disclosure – keeping corporate executives accountable to generating returns for shareholders.

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