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NZ Super’s Expansion Capital Strategy Revealed

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In the latest “How We Invest” white paper from the New Zealand Superannuation Fund (NZ Super), Nathan Tuck and Fiona Mackenzie (she exited NZ Super in 2017) reveal how expansion capital has become an attractive source of meaningful returns since the NZ$ 37.4 billion (US$ 26.8 billion) fund first began deploying capital to such enterprises in 2005.

Strategic Development – Expansion Capital

Defined by the authors as the provision of funds to small and fast-growing domestic companies with established business models, organic revenue growth in excess of 10% per annum, and enterprise values between NZ$ 5 million and NZ$ 100 million, NZ Super’s expansion capital investments have been relatively small, totaling some NZ$ 450 million spread across 9 funds and 47 companies to date. That’s barely over one fifth of the fund’s 5.5 % exposure to private equity as of December 31, 2017. However, many pensions and wealth funds have mandates to invest domestically ranging from the California Public Employees’ Retirement System (CalPERS) backing state businesses private equity program to Saudi Arabia’s Public Investment Fund (PIF) supporting Saudi national enterprises through capital investments.

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FIRRMA Bill is a Big Deal for Foreign Asset Owners

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The United States Treasury is analyzing options on further restricting investments into “sensitive” sectors, such as technology and defense, in the United States from Chinese state-owned capital. The U.S. Commerce Department, under the export control regime, banned U.S. companies from selling parts to ZTE Corporation, a Chinese telecommunications manufacturer, for seven years. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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AIMCo Posts 10.4% Return in 2017

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The Alberta Investment Management Corporation (AIMCo) posted its performance for the 12-month period trailing December 31, 2017, which saw its overall assets grow by 8.4% – or C$ 8.0 billion (US$ 6.1 billion) – to C$ 103.7 billion (US$ 82.3 billion). This represents returns net-of-fees on its C$ 88.2 billion (US$ 70.3 billion) worth of balanced fund investments in 2017 of 10.4%, against a 9.1% custom benchmark. Established in 2008, AIMCo represents the financial well-being of 32 pension, endowment, government, and specialty funds in the Canadian province of Alberta. This includes the Albert Heritage Fund.

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Mubadala Real Estate Targets JV Developers, Eyeing Local REIT Launch

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Mubadala Investment Company’s property arm is preparing to launch a local real estate investment trust (REIT) by 2020, and is currently in talks with several developers for international joint ventures on a plot-by-plot basis that are expected to be finalized in 2018, according to Ali Eid Al Mheiri, executive director of Mubadala Real Estate and Infrastructure. Ali Eid Al Mheiri is also Vice Chairman of ALDAR Properties PJSC and Chairman of Abu Dhabi Finance Company PJSC. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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