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Facing $5 Billion in Paper Loss, GIC Converts UBS Notes

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Singapore’s sovereign wealth fund converted its UBS notes into ordinary shares, getting hit with a paper loss of approximately US$ 5 billion. The Government of Singapore Investment Corporation allocated 11 billion CHF (US$ 10.22 billion) in mandatory convertible notes in UBS AG. The investment was used to support the Swiss financial giant during the global financial crisis.

The GIC is facing significant reputational risk among its peers and the Singapore public.

The GIC believed in the franchise value of UBS. GIC officials are hoping its investments in these global financial institutions play out. The GIC is facing significant reputational risk among its peers and the Singapore public.

A filing through the SEC in April displayed the original conversion price would be 47.7 CHF, two-thirds more than UBS’s last share price of 15.86 CHF. Singapore’s GIC earned nearly 2 billion CHF from a 9% coupon over the last 2 years. This partially compensated the sovereign wealth fund for the deep dive of the share price of UBS.

GIC had earned about 2 billion francs from a 9 percent coupon over the last two years, which partially compensated for the sharp erosion in UBS’ share price.

PSP Investments and Blue Sky Alternative Investments End Strategic Partnership Agreement

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Blue Sky Alternative Investments Limited informed Canada’s Public Sector Pension Investment Board (PSP Investments) that it agreed to terminate its strategic agreement effective March 31, 2019. In December 2017, Blue Sky Alternative Investments forged an agreement with PSP Investments to assist in committing capital in a number of agricultural investments.

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Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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