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Norway’s SWF Makes First Real Estate Investment in the USA

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According to the press release, “The Norwegian Government Pension Fund Global bought 49.9 percent of five office properties in the US, its first investment in the world’s largest real estate market, through a joint venture with TIAA-CREF.

The assets in New York City, Washington D.C. and Boston are valued at $1.2 billion, or about 6.6 billion kroner. TIAA-CREF, the seller, retained 50.1 percent of each property and will manage the buildings on behalf of the partnership. The transaction was completed on Feb. 8.

“This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio,” says Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management (NBIM), the fund’s manager. “We are very pleased to team up with a partner that has TIAA-CREF’s knowledge and capabilities, and look forward to jointly developing the venture.”

The properties consist of 1.9 million square feet (172,450 square meters) of rentable space. Two of the properties are located in New York City, two in Washington D.C. and one in Boston. The joint venture will seek to acquire additional office properties, primarily in these three cities.

“As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio,” Kallevig says. “We will initially seek to invest in key east-coast cities.”

The fund made its first real estate investments in 2011 in office and retail properties in London and Paris. It is mandated to hold 60 percent in equities, 35-40 percent in fixed income and as much as 5 percent in real estate.”

Source: Norges Bank Investment Management

Properties:
Washington D.C. (representing 37 percent of the five properties’ gross rentable space): Properties located at 1101 Pennsylvania Avenue and 1300 I Street.

Boston (33 percent of gross rentable space): Property located at 33 Arch Street

New York City: (30 percent of gross rentable space): Properties located at 470 Park Avenue South and 475 Fifth Avenue

Atlas Merchant Capital and GIC Scoop Up Stake in Ascensus

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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.

Advisors

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.

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The Value of Research: Skill, Capacity, and Opportunity

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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

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Khazanah to Scale Back International Investments, Preps 2019 Dividend

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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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