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Sovereign Fund Direct Investing in Healthcare Remains Constant

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Healthcare is a popular investment theme for sovereign wealth funds as the world’s population is getting older and older each year. Strategically, Asian sovereign funds like the Korea Investment Corporation (KIC) and Singapore’s GIC Private Limited have a domestic population that has a low birth rate and aging demographic. Combining the aging trend with the frenetic pace of industry consolidation, such as the New York-based Pfizer and Allergan US$ 150 billion merger, health care remains attractive, yet complicated, for many institutional investors. Being somewhat economic recession resistant when it comes to developed markets, healthcare has attracted substantial inflows of sovereign wealth fund capital. For example, Khazanah Nasional owns a minority stake in Mumbai-based drug manufacturer Ipca Laboratories. Wealth funds also approach private healthcare-related companies. Khazanah Nasional, Temasek Holdings, GIC and Baring Private Equity Asia are in negotiations with private equity firm CX Partners to buy a stake in Bengaluru-based surgical equipment maker Sutures India Pvt. Ltd. Sutures India has an estimated enterprise value of US$ 300 million with backers such as CX Partners and TPG Capital.

The Singaporean sovereign funds such as GIC and Temasek Holdings are active in the drug industry, backing emerging Chinese and Indian pharmaceutical companies in 2014 and 2015.

According to the Sovereign Wealth Fund Transaction Database (SWFTD), the pace of direct sovereign wealth fund investing in the healthcare sector has been steadily increasing. In the last three quarters starting with June 30, 2015, wealth funds spent more than US$ 1 billion directly investing in healthcare – roughly US$ 3.2 billion. This can be compared to volatile flow amounts in 2013 and 2014.

Direct Investment by Sovereign Wealth Funds and Large Pensions in Healthcare

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White House Nominates Heath Tarbert for CFTC Chairman

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The White House announced Heath P. Tarbert will be nominated to serve as Commissioner and Chairman of the Commodity Futures Trading Commission (CFTC). Tarbert currently serves as Assistant Secretary for International Markets at the U.S. Treasury Department. Before joining the U.S. Treasury, Tarbert was a Partner at law firm Allen & Overy. Tarbert was confirmed by the U.S. Senate for his current Treasury post at 87 (yes) to 8 (no).

Upon Senate confirmation, Tarbert’s CFTC term would start on April 14, 2019 and last for five years. Tarbert is taking over from J. Christopher Giancarlo whose term ends in April 2019. Tarbert will need a U.S. Senate confirmation to take the head CFTC post.

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KIA Could Sell Stake in North Sea Energy Business

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The Kuwait Investment Authority (KIA), through its unit Wren House Investment Management, is nearing a deal to sell a 40% stake in its North Sea energy business to JPMorgan Asset Management. In July 2018, KIA closed on a deal to acquire oil and gas pipeline firm North Sea Midstream Partners from ArcLight Capital.

More details to follow –

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Pensioenfonds PGB Hires BMO Global for Equity Protection Strategy

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Pensioenfonds PGB is a Dutch multi-sector pension fund. PGB awarded a mandate to implement a protection strategy for its €12 billion equity portfolio to BMO Global Asset Management. PGB is a €26.5 billion fund. PGB has been using BMO Global’s responsible engagement overlay since 2017.

The Chief Investment Officer of PGB is Harold Clijsen.

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