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Poland May Have its Own SWF in the Coming Years

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Shale gas is becoming a conventional source of energy; however, it is much more expensive than convention oil and gas drilling. Sovereign wealth funds such as Temasek Holdings have been investing in companies that are involved with the process called hydraulic fracturing.  Japan’s Mitsui has already been investing in shale projects in Poland.

Europe may have another local commodity-based sovereign wealth fund on its hands. Poland’s domestic energy needs are largely dependent on coal power and Russian gas imports.

Luckily for Poland, big deposits of shale gas have been discovered in the country. First, this could dramatically reduce the need of Poland importing energy from Moscow, which currently provides around 64% of Poland’s total gas imports. Second, it can provide for windfall profits to be taxed and moved into a sovereign investment vehicle.

Poland would most likely model the prospective SWF after Norway’s Oil Fund.

Poland has already given 87 licenses to companies to explore for gas trapped in shale rocks. According to the United States Energy Information Administration, Poland’s recoverable reserves of shale gas may amount to 5.2 trillion cubic meters, which could supply more than 300 years of domestic consumption.

Funds and Ownership, KKR Partners with Shinhan Financial

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South Korean financial giant Shinhan Financial Group Co., Ltd. reached a preliminary agreement with KKR & Co. to form a series of global buyout funds that could raise up to 5 trillion KRW. KKR and Shinhan signed a Memorandum of Understanding (MoU) in Seoul in early October. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norwegian Government Recommends SWF Remains at Central Bank

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There was speculation that Norway Government Pension Fund Global (GPFG) could be managed outside of Norges Bank. The Norwegian government shot down this idea and recommended Norway’s GPFG remain in Norges Bank. This recommendation came in the form of a white paper submitted to the Norwegian Parliament, Stortinget.

Norway’s Minister of Finance Siv Jensen, commented in a press release, “The Government proposes a new and modernised governance structure for Norges Bank. Moving forward, this new structure lays the foundations for the sound management of the central bank and of the GPFG.”

Some Central Bank Recommendations

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Invesco Buys OppenheimerFunds for $5.7 Billion

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Invesco Ltd. signed a deal to acquire OppenheimerFunds, Inc. from Massachusetts Mutual Life Insurance Company (MassMutual). In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake. This strategic transaction will bring Invesco’s total assets under management (AUM) to more than US$ 1.2 trillion. The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals. The transaction gives Invesco access to more third-party distribution platforms.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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