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Past 12 Months in Direct RE, Sovereign Funds Spent Over $35 Billion

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London

Increasingly, sovereign wealth funds and pensions are making more direct investments, especially in real estate and infrastructure. Instead of simply handing money to managers, wealth funds are forming strategic partnerships with commercial developers, banks, life insurers and other pools of capital. According to SWFI’s Sovereign Wealth Fund Transaction Database, sovereign funds directly invested over US$ 35 billion in real estate (excluding fund commitments) in the last twelve months. This is an increase from US$ 21.5 billion compared to the period before the last twelve months. Sovereign funds have been lured by inexpensive financing and rising rents in global cities such as Tokyo and London. Rents in central London have risen the most since 2000 as space dwindles. Global banks are lining up to earn fees to serve institutional investor giants like the Kuwait Investment Authority, Government of Singapore Investment Corporation, Abu Dhabi Investment Authority, Norges Bank Investment Management and CPPIB.

JP Morgan Forms Tactical Direct Investments Group

To serve sovereign wealth funds, pensions and other large institutional investors, banks like JP Morgan have been forming specialty units. In April, J.P. Morgan Asset Management formally created the Tactical Direct Investments Group within its global real assets unit. The cross-assets group will target direct and co-investment real opportunities. The direct investment team is being led by Avik Mukhopadhyay. Before joining JP Morgan in August 2014, Mukhopadhyay was vice president of investments at The CIM Group.

According to the press release, Global Head of Real Assets Joe Azelby commented, “Institutional investors are increasingly seeking to complement their real asset fund holdings with direct investments. However, for both the investor and the investment manager, direct investing is fundamentally different from fund investing.”

Bankside Quarter – Temasek Backs London Development

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Calamos Investments to Acquire Timpani Capital Management

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Naperville, Illinois-based Calamos Investments signed a deal to acquire Milwaukee-based Timpani Capital Management LLC, which focuses on small and small-midcap growth investing. Founded in April 2008, Timpani Capital Management oversees around US$ 588 million in assets. The deal is expected to close in the second quarter of 2019.

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RDIF and Russia-Japan Investment Fund to Invest in Russian Subsidiary of SBI Holdings

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The Russian Direct Investment Fund (RDIF) and the Russia-Japan Investment Fund (launched by RDIF, the Japan Bank for International Cooperation and JBIC IG Partners) have reached an agreement with the Japanese corporation SBI Holdings to invest in SBI Bank LLC, SBI Holdings’ subsidiary in Russia. SBI Bank LLC will undergo a large-scale reorganization.

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Ocasio-Cortez and Maxine Waters to Oversee US Banking System via House

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The youngest woman ever to serve in U.S. Congress – starting at the age of 29 – already has an opponent in her sights. Freshman U.S. Representative Alexandria Ocasio-Cortez, often dubbed AOC on Twitter, was appointed to the House Financial Services Committee, where the democratic socialist will oversee Wall Street. This committee oversees the banks and financial institutions of the United States. With Republicans controlling the U.S. Senate and the White House, and the Democrats controlling the House, one can expect less game-changing bills being turned into laws in the banking sector.

While bartending and waiting tables at the Flats Fix taco bar in Union Square, Ocasio-Cortez upset the more centrist Representative Joe Crowley, Chairman of the House Democratic caucus. Encouraged by her success, other far left democrats are planning to challenge moderate democrats in the 2020 primaries. Ocasio-Cortez is also expected to further strengthen the influence of Chairwoman Maxine Waters of the House Financial Services Committee. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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