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Norway’s SWF Strategy Council Suggest Streamlining ESG Process

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The Strategy Council 2013, a group of 5 independent reviewers tasked with evaluating Norway’s Government Pension Fund Global (GPFG), released their list of recommendations yesterday. Among the most notable were suggestions to streamline the evaluation and decision making process of the GPFG’s Environment, Social and Governance (ESG) mandates and finding the sweet spot between transparency and discrete operational management. The idea behind the latter being that too little transparency makes it difficult for companies to operate within the responsible investing framework established by the GPFG, and too much transparency, specifically with regards to mega funds like the GPFG, can cause unintended market movements.

On the evaluation front, the Council believes that there is currently too much overlap between the Council of Ethics and Norges Bank.

Indeed, considering a sovereign wealth fund that has in its equity portfolio over 7,000 companies and of those, 34 are more than 5 percent owned, significant market swings are a concern with arbitrarily defined investment criteria. To that end, the Strategy Council suggests that Norges Bank, the wealth fund’s manager, seek – through independent analysis – to fill in the “knowledge gap” it perceives concerning the effects of responsible investing on portfolio value.

This independent analysis would also lend a sense of legitimacy to the process of their SRI aims. The Council believes that this would strengthen the view of the GPFG’s governance in the eyes of the Norwegian people, an aim they view as “crucial” to the fund’s success.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Altitude Infrastructure Gets Financing on Haute-Garonne Network Project

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Altitude Infrastructure SAS inked a 25-year concession agreement and closed a debt financing package for the deployment and maintenance of an ultra-high-speed broadband network in Haute-Garonne. Haute-Garonne is a department in the south of France.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Guggenheim Partners Agrees to Acquire Millstein & Co.

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On July 11, 2018, Guggenheim Partners inked a deal to acquire New York-based Millstein & Co., L.P., an advisory firm formed by Jim Millstein. Millstein will become co-Chairman of Guggenheim’s securities business. Millstein & Co. will become part of Guggenheim Securities, the investment banking division of the company. Ronen Bojmel will lead the combined Guggenheim restructuring team.

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GIC Holds Steady, Maintains Cautious Investment Stance

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Singapore’s GIC Private Limited returned a 5-year return of 6.6% ended March 31, 2018. At March 2018, GIC had increased cash and nominal bonds up 2% to 37% of the total portfolio, while lowering exposure to developed market equities from 27% to 23%.

GIC CEO Lim Chow Kiat commented in his annual letter in the FY 2017-2018 report that, “In view of the high asset valuations, the increased risk of monetary policy tightening across different jurisdictions and the elevated uncertainty, we maintain a cautious investment stance. Nevertheless, we remain ready to take advantage of potential dislocations. The jump in market volatility experienced in early 2018 offered an indication of potentially bigger market turbulence and opportunities in the future.”

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