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Once Scorned, Sovereign Investors Take Another Look at U.S. Banks

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Remember when sovereign funds bailed out many of the large global banks during the 2007-2008 financial crisis.

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For several wealth funds, such as the Korea Investment Corporation (KIC), the massive bank bailouts have been a drag on annual portfolio performance. The Abu Dhabi Investment Authority (ADIA) even pursued litigation over Citigroup regarding its US$ 7.5 billion investment to support the bank in tough times. ADIA’s investment in Citigroup was massively diluted when the U.S. government came to the bank’s rescue.

Continued Abuse and Hope

U.S. bank stocks have taken a beating since 2008; many have never recovered facing issues of deleveraging, monstrous lawsuits over mortgage-backed securities and rate fixing, and the Dodd-Frank Act. Years after 2008, sovereign funds have opted to invest in Asian banks whether in China or in India, versus Western banks. However in recent months, U.S. banks have shown a level of resiliency and could benefit if the United States moves into an inflationary environment. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

CPPIB Tries Out CLO Equity Tranche Investing with Sound Point Capital

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Canada Pension Plan Investment Board (CPPIB) through its wholly-owned subsidiary, CPPIB Credit Investments Inc. (CPPIB Credit), is broadening its portfolio through new investments in equity tranches of collateralized loan obligations (CLOs) alongside experienced CLO asset managers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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CalPERS Names Yu Ben Meng as Chief Investment Officer

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The California Public Employees’ Retirement System (CalPERS) announced that Yu Ben Meng has been selected as the pension fund’s new chief investment officer (CIO). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ontario Nonprofit Network Awards Mandate to OPTrust

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The Ontario Nonprofit Network (ONN), a nonprofit network for the 58,000 nonprofits in Ontario, selected OPTrust to manage defined benefit assets. ONN selected OPTrust Select, the new defined benefit solution from OPTrust. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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