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PAYDAY: Singapore Sovereign Wealth Fund Loves Logistics

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Update – December 8th

It was originally reported that GIC Private Limited was the sole investor in IndCor Properties and that Global Properties Logistics denied involvement. We can now confirm that Global Properties Logistics is the lead investor.

There were reports that Global Logistic Properties Limited (GLP) was participating on the deal. On December 8th, Global Logistic Properties has confirmed they are co-investing with the GIC to acquire IndCor Properties for US$ 8.1 billion. GLP plans to complete the deal by the first quarter of 2015 and will hold an initial stake of 55% using GLP US Income Partners I. GLP plans to reduce this stake to 10% by August 2015 to resell it to capital partners. Singapore’s GIC will invest in the remaining 45% of IndCor Properties.

In the December 8th press release, Mr. Ming Z. Mei, Co-Founder and Chief Executive Officer of GLP, said: “This transaction gives us immediate scale as well as the best team in the US logistics market. The local management team is very experienced and we expect significant synergies given that we have worked with and alongside more than half of them previously. Investor interest for GLP US Income Partners I is strong and we remain confident of completing the fund syndication by August 2015.”

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Ecstatically, New York-based Blackstone Group announced a groundbreaking sale in a press release, beating out other involved parties to the punch. Funds affiliated with Blackstone Real Estate Partners VI & VII sold off their blank-check industrial portfolio company, Chicago-based IndCor Properties Inc., to a large Singapore sovereign wealth fund. IndCor owns a portfolio of 117 million square feet of industrial properties throughout the United States. E-commerce trends are shaping the logistics sector globally, changing the world of retail. Sovereign wealth funds and pensions are buying into this narrative.

In the Blackstone press release, Tim Beaudin, IndCor Properties CEO, said: “We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States. We are excited about the company’s future prospects under new long-term ownership with GIC.”

Blackstone nixed the IPO route for IndCor after finding a cash rich buyer, an Asian sovereign wealth fund. Affiliates of GIC Private Limited purchased the company for US$ 3.645 billion, an earth shattering figure for direct sovereign wealth fund transactions. Blackstone had a number of advisors regarding the IndCor sale which include Eastdil Secured, Citigroup, Barclays and RBC Capital Markets.

Unfortunately, the limited partners of Walton Street Capital funds that participated in the CalWest deal suffered major losses.

Blackstone’s Clever Takeover of CalWest

In May 2007, Chicago-based Walton Street Capital, L.L.C. bought CalWest Industrial Holdings LLC, a mega industrial property portfolio, at the peak of the market for an estimated US$ 2.8 billion from a partnership between California Public Employees’ Retirement System (CalPERS) and RREFF, a subsidiary of Deutsche Bank AG. The deal was funded by loan capital from Lehman Brothers, Barclays Capital and Goldman Sachs. Walton Street was founded by Neil Bluhm, and raised billions from U.S. pensions, touting investors such as Ohio Police & Fire Pension Fund, Kentucky Retirement Systems, Teachers Retirement System of Louisiana and Texas Permanent School Fund.[ 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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