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Sovereign Funds Increase Energy and Utility Sector Investments in the First Quarter

oilFor the first quarter of 2013, sovereign wealth funds have come out strong investing directly in energy and utility investments. Direct transaction data for the first quarter of 2013 is not fully complete; the total so far for the first quarter of 2013 is US$ 2.98 billion. Already the direct transaction amount for this quarter is greater than fourth quarter 2012’s total of US$ 810 million. This is the highest quarterly transaction total in the energy and utility sector since the first quarter of 2012 which amounted to US$ 4.37 billion.

Sovereign fund direct investments in energy tend to be opportunistic such as investing in distressed situations.

Singapore’s Temasek Holdings investment in Spain-based Repsol SA represented a significant portion of the deal value total. Other influencing direct transactions include the Kuwait Investment Office and the Government of Singapore Investment Corporation making large market purchases in National Grid Plc. Non-commodity sovereign funds have increased allocation to energy and utility sectors. Commodity-based sovereign funds are double exposed to resource prices.

Direct Sovereign Wealth Fund Transactions

Period Energy and Utilities – Billions USD
Q2 Y2012 0.74
Q3 Y2012 1.55
Q4 Y2012 0.81
Q1 Y2013 2.98

Source: Sovereign Wealth Fund Transaction Database

Learn more: Sovereign Wealth Fund Transaction Database

Concerns Raised at Potential BlackRock Takeover of CalPERS’ Private Equity

The California Public Employees’ Retirement System (CalPERS) has been analyzing options on what to do with its massive US$ 26 billion private equity program. The pension system has embraced the mantra of reducing cost, reducing complexity and reducing risk, the hallmark of its program called “INVO 2020”. CalPERS also wants less, but more strategic relationships with external money managers. At one point, CalPERS was contemplating increasing its direct investment staff to model Canadian pension funds such as Canada Pension Plan Investment Board (CPPIB), OMERS and the Ontario Teachers’ Pension plan. The pendulum has begun to swing the other way as reported earlier by SWFI research staff.

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CDP Signs €1.7 Billion Infrastructure Loan Agreement with Atlantia Group

Cassa depositi e prestiti S.p.A. (CDP) and Atlantia Group’s Autostrade per l’Italia (ASPI) have signed a €1.7 billion loan contract dedicated to upgrading motorways in Italy under concession to ASPI. €1.1 billion will come in the form of a term loan with a 10-year tenure, with the remaining €600 million wrapped up in a five-year revolving loan.

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Sovereign Funds Commit to Integrating Climate-Related Risks at One Planet Summit

Representatives from a number of sovereign wealth funds who collectively govern over US$ 2 trillion in assets came together at the One Planet Summit at the Élysée Palace in Paris in order to discuss what public asset owners can do to incorporate climate change-related risks and opportunities into investment considerations.

The newly formed committee – called the One Planet Sovereign Wealth Fund Working Group – includes as its founding members the Abu Dhabi Investment Authority (ADIA), Kuwait Investment Authority (KIA), Qatar Investment Authority (QIA), Norges Bank Investment Management (manager of Norway’s Government Pension Fund Global), Saudi Arabia’s Public Investment Fund (PIF), and the New Zealand Superannuation Fund.

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