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See the Largest Allocators to Private Equity

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Increasingly, sovereign funds and pensions have allocated more capital toward private market investments in the past decade. Some driving forces include prospects for higher risk-adjusted returns, reduced volatility and diversification. Who has the most allocated to private equity?

See the largest public institutional investors allocated to private equity

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SWFI staff compiled a global ranking of the biggest private equity allocators. This list is comprised of sovereign wealth funds and public pension institutional investors. This is not just a ranking of cash-heavy institutional investors allocating to private equity funds. This ranking includes direct investments, co-investments, separate accounts and secondary investments. Furthermore, this ranking leaves out private real estate and infrastructure allocations.

Private Equity Investor Composition

Notably, a number of sovereign wealth funds such as the Qatar Investment Authority (QIA) dominate the top ten of the list ranked. Many of these funds are strategic development sovereign wealth funds (SDSWF). Also two Canadian pension funds made the top 10 of the list ranked. A number of U.S. public pensions made the top 25 of the listed ranked such as the Ohio Public Employees’ Retirement System (OPERS). Investor appetite for private market investments remain robust as many institutional investors continue to commit capital to private equity funds, while expanding internal co-investment capabilities. A number of wealth funds and pensions have created partnership or networking officers to facilitate deal flow.

Another worth mentioning trend is the greater usage of separate accounts and the scaling back on the number of private equity general partner relationships. Pensions such as Teachers’ Retirement System of Texas (TRS) are familiar with co-investments and partnering with firms such as the Blackstone Group. These options are attractive for limited partners due to lower fees, enhance transparency and price discovery and greater liquidity. The concept of few means more is gaining traction with the larger asset owners (public funds with over US$ 50 billion in assets).

Oman SGRF Contemplates $1 Billion Infrastructure Fund

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Oman’s State General Reserve Fund (SGRF) is in discussions on forming a US$ 1 billion infrastructure fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norway’s GPFG Banned from Investing in 9 Companies Over Nuclear Weapons

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The recent false alarm caused by a state employee in Hawaii (who was not terminated and reassigned to a new position), triggering the Emergency Alert System message at 8:07 a.m. caused pandemonium in the state. After decades of failure in diplomacy between the United States and North Korea, the threat of a nuclear missile attack has grown since. The states of Alaska and Hawaii are the closest states to North Korea.

Besides the recent news in the world of nuclear missiles, Norges Bank oversees the management of the country’s sovereign wealth fund. The central bank has moved to ban nine companies from the Government Pension Fund Global. In addition, one company has been placed under observation. The Executive Board of Norges Bank’s decisions on exclusion were made on the basis of recommendations from the Council on Ethics. However, before moving to exclude a company, the central bank may consider other options, such as the exercise of ownership rights. In these instances of companies, the board determined that it was appropriate to use other measures in these cases.

The Council on Ethics’ recommendations to exclude:
Risk of severe environmental damage and serious or systematic violations of human rights
Evergreen Marine Corporation (Taiwan) Ltd
Korea Line Corporation
Precious Shipping PCL
Thoresen Thai Agencies PCL

Unacceptable risk of serious or systematic violations of human rights
Atal SA

Over involvement in the production of nuclear weapons
AECOM
BAE Systems
Fluor Corporation
Huntington Ingalls Industries Inc
Honeywell International Inc (already previously excluded)

Placed Under Observation
Pan Ocean Co. Ltd

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Sistema to Pledge Assets to Help Fund Settlement

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The Russian Direct Investment Fund (RDIF) is helping a settlement situation between two Russian economic powerhouses. In January 2018, Sistema, under a settlement, is mandated to pay Bashneft oil company, which is owned by energy behemoth Rosneft, 100 billion roubles (US$ 1.8 billion) by March 30, 2018.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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