In a June 29, 2017 letter, Norway’s Finance Ministry asked the central bank to consider whether Norway’s Government Pension Fund Global (GPFG) should be permitted to invest in private equity or unlisted equity. On January 8, 2018, Norges Bank penned an official letter back and gave its recommendations.
Norges Bank had recently advised on private equity in two letters, one dated back on July 6, 2010. The concern then was that private equity required increased head count and operational management. Norges Bank did recommend permitting such investment at the time. Fast forward, Norway’s sovereign fund launched its large real estate program, trailing its expertise in private markets.
“Norway’s sovereign fund is in the trillion dollar investor class. The wealth fund has intimate knowledge with the largest listed companies, as the fund votes on important corporate issues. In addition, the wealth fund has a long-time horizon,” said Michael Maduell, President of the Sovereign Wealth Fund Institute (SWFI).
Clarification: Norway’s SWF does not take board seats. SWFI clarified Michael Maduell’s comments as they could have been construed that Norway’s SWF takes board seats.
Here is the letter (Norges Bank Investment Management website).
After prosecuting its case, Norges Bank believes that if the sovereign fund did invest in private equity, they would most likely want to invest in private equity fund and alongside private equity funds as co-investors.
The letter concludes that, “The Bank’s recommendation is that the Ministry permits investments in unlisted equity in its definition of the investment universe.”
Atlas Merchant Capital LLC and Singapore’s GIC Private Limited acquired just under a 25% equity stake in Dresher, Pennsylvania-based Ascensus, the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. San Francisco Genstar Capital LLC and New York-based Aquiline Capital Partners LLC were the sellers of the shares in Ascensus and will maintain control over the company.
Atlas Merchant Capital LLC was founded by Bob Diamond and David Schamis. Diamond is the former group chief executive of Barclays plc.
GIC is an investor in Alight Solutions, a provider of human capital solutions.
Barclays acted as the lead financial advisor and J.P. Morgan acted as financial advisor to Ascensus in connection with this transaction. Willkie Farr & Gallagher LLP acted as legal counsel to Ascensus.
Debevoise & Plimpton LLP acted as legal counsel to Atlas Merchant Capital and Sidley Austin LLP acted as legal counsel to GIC.
In 2015, JC Flowers sold Ascensus to Genstar Capital and Aquiline Capital Partners.
The Value of Research: Skill, Capacity, and Opportunity
This article is sponsored by S&P Dow Jones Indices.
How much should a portfolio manager be willing to pay for research? The question is of importance to any manager, but has become particularly pertinent since newly imposed European rules require that the costs of investment research—previously offered by many investment banks as an in-kind consideration in return for brokerage business—be unbundled from trading.
Unfortunately, attempts to determine a fair value for research in the most general circumstances are doomed to fail. Even if we only consider direct recommendations to buy or sell certain securities, the value of such recommendations to a portfolio manager will vary according to the absolute size of positions taken in response. Instead, we provide a framework for estimating relative research values across markets and constituents, under certain stylized (but reasonable) assumptions.
REPORT: The Value of Research: Skill, Capacity, and Opportunity
Malaysia’s Khazanah Nasional Berhad is prepping to declare more than 1 billion MYR in a dividend payout to the Malaysian government for 2019. Khazanah Nasional is undergoing a significant strategy shift to focus more on domestic assets, while selling off venture tech investments, overseas real estate, fund investments, and other non-strategic assets. The wealth fund also plans to scale back its overseas presence in markets such as San Francisco and London.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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