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Norway SWF Keeps Eye on Mexican Government Debt over NAFTA



The United States and Mexico have made progress on revising key parts of the North American Free Trade Agreement (NAFTA), a 24-year old trade agreement. U.S. President Trump called out NAFTA as one of the worst trade pacts in history. A preliminary agreement between the U.S. and Mexico could be coming soon that will be the United States-Mexico Trade Agreement.

On August 27, 2018, U.S. President Trump tweeted, “A big deal looking good with Mexico!”

Outgoing Mexican President Enrique Peña Nieto then tweeted, “He hablado con el Presidente @realDonaldTrump. México y Estados Unidos han alcanzado un entendimiento comercial. Deseamos la reincorporación de Canadá a las pláticas para lograr una exitosa negociación trilateral del TLCAN esta misma semana.”

During the 1992 U.S. presidential campaign, candidate Ross Perot made a popular statement on NAFTA if it were to pass, “We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,…have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south.”

Ross Perot and George Bush lost the 1992 election to former U.S. President Bill Clinton. Clinton supported NAFTA and the trade pact went into effect on January 1, 1994.

Norway’s sovereign wealth fund has gradually lowered its exposure to Mexican government debt, having kept an eye on NAFTA talks, the Mexican presidential election, and ongoing economic and political events within the country.

Period Mexican Government Debt in NOK
Jun 2018 40,223,000,000
Mar 2018 39,958,000,000
Dec 2017 46,036,000,000

On the other hand, Norway’s sovereign wealth fund has gradually increased its exposure to U.S. government debt.

Period U.S. Government Debt in NOK
Jun 2018 665,594,000,000
Mar 2018 608,725,000,000
Dec 2017 607,651,000,000

SWFI First Read, September 21, 2018



U.S. Public Becomes More Aware that Gmail Scans Emails

Alphabet is a major stock holding for sovereign wealth funds and large pensions. Search giant Google is under fire for allowing third-party partners and companies, like Return Path Inc and other advertisers, to share data from Gmail accounts. Many experts and tech observers already knew this, but more people in the public are becoming aware of Google’s practices when it comes to privacy. Google disclosed in a letter to U.S. lawmakers this finding. The Wall Street Journal reported that in some instances, app companies were able to read people’s emails in order to improve their algorithms. In 2017, Google said they would stop scanning all of one’s Gmail messages for the goal of personalized ads.

GPIF Infrastructure Exposure Almost Reached 200 Billion Yen in March 2018

Japan Government Pension Investment Fund’s (GPIF) exposure to infrastructure real estate was 196.8 billion JPY at the end of March 2018. At that period, 57% of the exposure was to the UK, 15% was to Australia, 15% to Sweden, 10% to Spain and 3% to Finland. 21% of GPIF’s infrastructure portfolio was linked to airports versus 27% to ports.

AIMCo-backed sPower Closes $498.7 Million Bond Deal

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Iceland Contemplates a Sovereign Wealth Fund



The Government of Iceland is looking to possibly form a sovereign wealth fund to stabilize the country from unforeseen shocks to the national economy. The Iceland government released a statement saying, “The state’s contributions to the Fund will be equivalent to new revenues from publicly owned power production companies which are expected to accrue in the coming years.”

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CBRE Global Wins First GPIF Global Real Estate Mandate



Japan Government Pension Investment Fund (GPIF) awarded its first global real estate mandate by hiring CBRE Global Investment Partners Limited. This is a global core real estate fund-of-funds separate account. Overseeing this mandate as a gatekeeper is Asset Management One Co., Ltd., which is a unit of Mizuho Financial Group. This RFP was launched in April 2017.

CBRE Global Investment Partners is the multi-manager arm of CBRE Global Investors.

In addition, on August 8, 2018, GPIF hired two custodians for short-term investments. These custodians are Trust & Custody Services Bank, Ltd and The Master Trust Bank of Japan, Ltd.

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