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Obama versus Romney on Sovereign Wealth Funds

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How will sovereign wealth funds fair if Republican nominee Mitt Romney wins the 2012 U.S. presidential election? How will they fair under a second term of President Barack Obama? The American President, lobbyists, and policymakers can affect sovereign wealth fund investment performance, asset growth, asset allocation, and public perception. In fact, the President of the United States can give the thumbs up or down on transactions that come under the scope of CFIUS.

Globally, sovereign wealth funds as an investor class has grown past US$ 5 trillion in 2012. It is hard to say what material impact the American President can have on sovereign wealth funds. A major input of growth for commodity-based sovereign funds is the price of energy, the demand for it, and how much is sold in world markets. Current, U.S. energy policy positively contributes to the growth of sovereign funds. Rising U.S. consumption of foreign oil, especially in the Gulf region helps feed into the money pump of Middle Eastern sovereign funds. Granted if the United States slowed down foreign purchases of Gulf oil another country like China would pick up more of the oil being shipped out, but it would have a material impact on demand, thus lowering oil prices.

Obama Impact
February 7, 2008, when Barack Obama was gunning for U.S. president he informed reporters on a flight from New Orleans to Omaha, Nebraska, “I am concerned if these … sovereign wealth funds are motivated by more than just market considerations, and that’s obviously a possibility.” He further added, “If they are buying big chunks of financial institutions and their board(s) of directors influence how credit flows in this country and they may be swayed by political considerations or foreign policy considerations, I think that is … a concern.”

The current Obama administration has been a bit more hawkish on CFIUS, to be fair the scope of CFIUS was expanded in 2007. There have been more notices ever since 2008. [ 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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