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Our Hand-Selected 12 Popular SWFI Stories for 2014

The punctilious editorial staff of SWFI hand-selected 12 popular stories that have garnered high-traffic and social shares. Here is a roundup of 12 popular articles from this year.

#1. 5 Things Sovereign Wealth Funds Won’t Tell You
Sovereign wealth funds constantly make news headlines, buying infrastructure in the UK, acquiring a tech company with a private equity fund or doling out large mandates to established money managers. The perception that sovereign funds are long-term in nature can rightfully be challenged.
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hedge funds

#2. Here’s Why CalPERS Dropped Hedge Funds
Are hedge funds losing significance with major institutional investors? The California Public Employees’ Retirement System (CalPERS), the largest U.S. pension fund, expelled hedge funds from its portfolio – sending a shock to the estimated US$ 3 trillion hedge fund industry. Some hedge funds are known for leveraged bets on market beta.
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#3. Why Sovereign Wealth Centers on San Francisco Bay Area
A number of Asian sovereign wealth funds continue to build ties to Silicon Valley, the hotbed for technology innovation and the rest of the San Francisco Bay Area. In a trailblazing signal, Malaysia’s Khazanah Nasional chose to open its U.S. office in San Francisco, not in New York City. Singapore’s GIC Private Limited also has an office in San Francisco and has invested in numerous investment funds and properties in the Bay Area.
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#4. 2014 Looks to Beat 2013 in Sovereign Wealth Fund Transactions
Increasingly, sovereign wealth funds are investing directly. The larger sovereign funds are getting involved in more deals, whether in institutional real estate, partaking as a group member in a company acquisition or buying more shares on the open market. As a whole, the world of sovereign wealth funds is rapidly expanding due to numerous factors. One significant factor is the number of new sovereign wealth funds cropping up, particularly in Africa and the Americas.
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#5. Why ESG is Gaining Traction Among Institutional Investors
Whether it is called sustainable investing or responsible investing, this concept of allocating capital that creates value for both the investor and society as a whole, has achieved traction among various institutional stakeholders in recent years.
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#6. Multi-Asset Demand Drives Institutional Business
To save the global economy, central bankers have played the free money melody, entrancing asset managers and asset owners such as sovereign wealth funds and public pensions. With probable shifts in key interest rates, institutional investors are re-examining new strategies and solutions. One of these solutions is multi-asset investing.
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#7. What if ADIA Took BlackRock Private?
The Abu Dhabi Investment Authority (ADIA) is the largest sovereign wealth fund in the Middle East. The sovereign fund has a mandate to invest overseas, utilizing some of the most respected asset managers in the industry. In rare circumstances, sovereign wealth funds and pensions take equity interests in asset management firms.
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#8. EXPLORED: The Opportunity Cost Model Distilled for Sovereign Funds and Pensions
David Denison, Professor Michael Brandt and Professor Andrew Ang were tasked to review the active management of Norway’s sovereign wealth fund. In the review, they detailed the “Opportunity Cost Model” as a viable option for long-term institutional investors such as sovereign wealth funds and public pensions.
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Opportunity Cost Model

#9. Are Sophisticated Sovereign Wealth Funds Becoming the Next Crop of Dealmakers?
Sovereign funds represent a large, thriving pool of sophisticated capital. With nearly US$ 7 trillion in institutional investor assets, sovereign wealth funds have flexed their muscles, acquiring luxury hotels to Indian movie production companies.
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#10. Uber Could Use Sovereign Wealth Fund Money
San Francisco-based Uber Technologies, the driver-for-hire car service, could use some sovereign wealth money to fuel growth, payback earlier investors and participate in tighter regulatory car service markets. In addition, one reason why a sovereign wealth fund may be a better investor for Uber than a venture capital firm is that SWF capital is long-term and patient (not true in all cases).
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#11. Why Rubenstein Believes SWFs May Become the Biggest Single Capital Source for Private Equity
David Rubenstein is the co-founder and CEO of the Carlyle Group – a well-known alternatives manager that has carved out a significant corner in the world of private equity.
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#12. Sovereign Wealth Funds Make Up More Than 25% of U.S. Retirement Assets
The Investment Company Institute published retirement data stating that December 31, 2013 retirement U.S. assets amounted to US$ 23 trillion. These assets increased 5% from 3 months ago. Employer-based defined contribution assets in the U.S. totaled US$ 5.9 trillion, in which US$ 4.2 trillion were in 401(k) plans.
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SWFI First Read, December 15, 2017

Gaw Capital Sells Cross Tower Shanghai Building

Hong Kong-based Gaw Capital Partners has agreed to sell the Cross Tower, a 24-storey commercial building in Shanghai, to World Union Investment Management, for 2.66 billion RMB (US$ 402 million). The tower is located in the Huangpu district.

RDIF Portfolio Company Geopharm Plans to Increase Insulin Production

Russia-based Geopharm is a portfolio company of the Russian Direct Investment Fund (RDIF). Geopharm signed a special investment agreement with the City of St. Petersburg, Russia. Geopharm plans to invest more than 3.3 billion rubles in building a complex to meet insulin production demands.

Norway’s KLP to Exclude Companies with Oil Sands Extraction via Revenue Threshold

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NZ Super Resumes Government Contributions

The New Zealand Superannuation Fund (NZ Super) has resumed receiving contributions from the New Zealand government in the face of rising obligations as an increasing proportion of the country’s population approaches retirement. According to a statement released by the fund’s managing Board of Guardians, the government plans on investing US$ 5.3 billion into NZ Super between now and June of 2022, with the first payment scheduled for December 15, 2017.

Policymakers believe the resumption of government contributions, which were halted in July of 2009, is expected to ease the burden on the country’s current taxpayers and future generations. Withdrawals from NZ Super are expected to peak in 2078, at which point the fund will be covering 12.8% of New Zealand’s pension obligations. The new wave of contributions will initially be invested in passive, low cost equity and bond investments, according to Catherine Savage, Chair of the Guardians.

Recent Performance & Leadership Change

NZ Super has enjoyed one of its best annual performances since its founding in 2001, with a reported return of 20.7% before tax for a 12-month trailing period ended June 30, 2017, up 5 billion NZD (US$ 3.6 billion) compared to 2016. NZ Super generated 21.85% annual return in its global equities, developed market portfolio, according to its 2017 annual report.

NZ Super faces a changing of leadership in the coming year with the exit of chief executive Adrian Orr, who will leave the Fund officially in March of 2018 to serve a five-year term as Governor of the Reserve Bank of New Zealand. Mr. Orr has earned a spot numerous times in the Sovereign Wealth Fund Institute’s Public Investor 100 annual ranking over the years, most recently in 2017 at #3.

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iZettle Raises US$ 47 Million in Series E, Prepares for 2018 Listing

Card transaction platform iZettle AB has raised another US$ 47 million in Series E funding, this time with new backing from Sweden’s AP4 and early-stage venture capital firm Dawn Capital. Previous investors in the Stockholm-based payments business include American Express, MasterCard, Intel, and Spain’s Santander Group. With US$ 235 million in equity to date, iZettle is quickly approaching an estimated valuation of US$ 1 billion.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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