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Saudi Sovereign Fund Buys Big Stake in Tesla

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Saudi Arabia’s Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, purchased a large stake in Tesla, Inc. (formerly Tesla Motors). PIF acquired a 3% to 5% stake in the electric auto manufacturer. The exact date and time of the share purchases are unknown to the public. According to current share price figures of Tesla, the stake is worth around US$ 1.7 billion and US$ 3.2 billion. Initially, PIF approached Tesla in 2017 to take Tesla private. PIF then asked for newly-issued shares of Tesla. These shares were acquired on the secondary market, after Elon Musk turned down the issuing of new shares of Tesla. JPMorgan helped PIF acquire the shares in the secondary market.

Elon Musk also tweeted about taking Tesla private. At US$ 420 per share, at least US$ 70 billion would be needed to take the company private. However, far less could be needed if the current investor would roll up their equity into the private vehicle.

Hedge funds manage money from a wide number of capital sources including foundations, family offices, public pensions and sovereign wealth funds. A number of prominent hedge funds have taken short positions against Tesla. Hedge fund Greenlight Capital, managed by David Einhorn, has taken losses trying to short Tesla stock. Greenlight Capital started shorting Tesla a couple of years ago. Einhorn even ended his Model S lease, opting for an electric Jaguar car (Jaguar I-PACE). In August, Einforn revealed to his investors that the Greenlight Capital Fund was down 18.3% in the first half of the year. Einhorn in his investor letter called Musk “erratic and desperate.”

Another Tesla short investor in Jim Chanos of Kynikos Associates. The Alaska Permanent Fund is an investor in a Kynikos fund.

Koch Brothers Kick Big Money into ERP Cloud Software Company Infor

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New York-based Infor is an enterprise cloud software company. Infor raised US$ 1.5 billion from existing shareholders, Golden Gate Capital and Koch Equity Development LLC. Koch Equity Development is the investment and acquisition subsidiary of Koch Industries, Inc. Infor has 17,300 employees. At fiscal year 2018, Infor claims it generated over US$ 3 billion in revenue. Infor states that over 72% of all hospitals in the United States run Infor applications. Infor could be heading toward an initial public offering (IPO) or possibly be acquired by a company like Oracle Corporation or Salesforce. Charles E. Phillips is the CEO of Infor and before heading it was Co-President of Oracle from 2003 to 2010.

On February 21, 2017, Koch Equity Development invested US$ 2 billion into Infor. Koch Industries was a customer of Infor before it became an investor in the company. Golden Gate Capital made its first investment in Infor in 2002.

Matt Flamini is the President of Koch Equity Development. Jim Hannan is Koch Executive Vice President and CEO of Enterprises for Koch Industries, Inc.

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Could Australia’s Future Fund Offer a Low-Fee Superannuation for its Citizens?

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Australia’s Scott Morrison government may soon allow the country’s Future Fund to offer low-fee superannuation accounts. Aware of the proposal, Prime Minister Morrison stressed that offering Australia a low-fee, government-managed superannuation fund as a default option is not government policy.

However, many proponents of this model believe it would create competition in the country’s US$ 2.7 trillion dollar retirement system. The Future Fund Chairman, Peter Costello, and economist Nicholas Gruen, CEO of Lateral Economics, put forth the idea, and it is quickly gaining support. This comes in the wake of Australians learning that they were losing US$ 3.8 billion annually in high-fee, underperforming accounts, and many were mistakenly being charged fees with no accompanying service provided. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Saudi and Other Gulf Country Bonds to Join JPMorgan Emerging Market Bond Index

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In a boost for Gulf-based debt, JPMorgan is adding their debt compositions to two influential emerging market bond indexes. These emerging market indexes are the most widely tracked among asset managers in the industry. Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Qatar are being added to the J.P. Morgan EMBI Global Diversified Index and the EMBI Global, starting January 31, 2019. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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