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No Keystone: Institutional Investors Lose Big on Canadian Oil Sands

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Canadian oil sands companies have struggled financially, many are cash-strapped, holding off on pursuing projects. The long-term payoff for institutional investors seems distant as global oil prices have plummeted. OPEC plans to meet in June. Saudi Arabia’s Oil Minister Ali Al-Naimi stated that OPEC will not change course even if prices drop to US$ 20 a barrel. Oil sands companies are attempting to wait out low oil prices.

On February 24th, U.S. President Barack Obama vetoed a bill to allow the construction of the Keystone XL oil pipeline. The opposition party Republicans criticized the veto with U.S. House Speaker John Boehner calling the veto a “national embarrassment”. The proposed Keystone pipeline would have moved 800,000 barrels daily from the rugged oil sands of Alberta to refineries and ports on the Gulf coast. This was a significant blow to Canadian oil sands companies and their investors. In a White House press release, Obama states, “I am returning herewith without my approval S. 1, the ‘Keystone XL Pipeline Approval Act.’ Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.”

In total, the CPPIB invested over C$ 500 million in Laricina Energy.

Calgary-based Laricina Energy Ltd, an oil sands producer, which raised capital from institutional investors such as the Korea Investment Corporation (KIC) and Canada Pension Plan Investment Board (CPPIB), is closing its Germain commercial demonstration project. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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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BlackRock Contemplates Stake in Eurizon

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Asset management giant BlackRock is contemplating purchasing a 30% ownership stake in Intesa SanPaolo’s asset management unit called Eurizon Capital SGR S.p.A. BlackRock is keen on growing its technology business and increase market adoption of its Aladdin platform.

Intesa has been working with UBS to seek out strategic options for Eurizon. Intesa is keen on maintaining control over Eurizon.

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SWFI First Read, June 22, 2018

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JPMorgan Fund Buys 40% of Oxford Properties’ French Portfolio

A fund advised by JP Morgan Asset Management committed €400 million in Oxford Properties’ French portfolio. Essentially, Oxford Properties sold a 49.9% non-managing interest in 32 Rue Blanche, 92 Avenue de France and Paris Bastille. Oxford Properties made its maiden investment in Paris in 2014 when it acquired 32 Rue Blanche.

Oxford Properties is the real estate unit of OMERS.

Temasek Explores Further Cash Commitments to FirstCry

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