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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. ]

Youtube is Crashing

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Youtube, a video service of Google, is crashing. Institutional investors are major investors in Alphabet, the parent company of Google.

At 6:41 PM on October 16, 2018, Team YouTube tweeted, “Thanks for your reports about YouTube, YouTube TV and YouTube Music access issues. We’re working on resolving this and will let you know once fixed. We apologize for any inconvenience this may cause and will keep you updated.”

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Investors Eye Tencent’s Next Moves

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Formed in Shenzhen in 1998, Chinese tech giant Tencent Holdings Limited is the largest gaming company in the world and the largest gaming market is in China. In August 2018, China’s Education Ministry disclosed its monitoring how many new games are coming online. Tencent needs approval from the Chinese government to publish games. In 2017, almost 9,000 games were approved in China compared to only 1,931 in 2018. Chinese President Xi Jinping is keen on combating shortsightedness in children from the overuse of video games.

Anime

Tencent will inject US$ $317.6 million into Chinese streaming site Bilibili in return for 12.3 % equity in the company. Bilibili is a video sharing site known for streaming anime, comics, and games. Tencent’s investment follows previous funding rounds from Tiger Global Management, Wells Fargo, JPMorgan Chase, BlackRock, and Alkeon Capital Management. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ireland Strategic Investment Fund Signs MoU with IFC

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The International Finance Corporation (IFC) and the Ireland Strategic Investment Fund (ISIF) inked a Memorandum of Understanding (MoU) that will initially focus on investment opportunities in the food and agriculture sector, given its strength and importance for the Irish economy. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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