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Sovereign Funds Weary of European Infrastructure Risk

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Owning European infrastructure can be a profitable venture for institutional investors like pensions and sovereign funds. However regulatory risk can hamper returns, leaving a sour taste in the mouths of sovereign wealth funds, pensions, and infrastructure funds. On January 10th, London’s Heathrow Airport, regulated by UK’s Civil Aviation Authority, was mandated to cap prices it can levy from airlines from April 2014. The British aviation regulator said prices must be 1.5% below the retail prices index – a far greater price cap than originally proposed. Heathrow officials contend the regulator’s assumptions and forecasts are aggressive. Airlines like Virgin Atlantic Airways praised the ruling, mentioning that there was a need to lessen the steep rise in customer prices in Heathrow.

Investors in Heathrow, through investment holding vehicles, include Spanish giant Ferrovial S.A., GIC Special Investments (a subsidiary of GIC Private Limited), Qatar Holding LLC and the China Investment Corporation perceive the levy caps as draconian.

Across to Norway

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Mergermarket Gets Ready to be Sold

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Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.

Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.

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Why Japan Post Sees Promise in Aflac

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Aflac Inc. is an American insurance company founded in 1955. The company is the biggest provider of supplemental insurance in the United States. Aflac also has major operations in Japan.

In December 2018, Japan Post Holdings (JPHLF) signaled it was spending US$ 2.64 billion for a 7-8 % stake in Aflac. The goal is that, in four years time, Aflac will become an affiliate of Japan Post. Japan Post hopes to accomplish this by becoming the largest voting shareholder of the company. The world’s 13th largest company, with 400,000 employees, Japan Post needs to expand to chase further growth, mainly because Japan Post expects the postal business to decline. Diversification is seen as the optimal route to long term stability for the holding company. Japan’s economy is worrying. Japan’s aging population means that many insurance companies are facing a shrinking customer base, Japan Post settled on a plan to expand overseas.

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RDIF and Development Agency of Serbia Agree to Explore Joint Investments

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The Russian Direct Investment Fund (RDIF) and the Development Agency of Serbia, also known as Razvojna agencija Srbije, reached an agreement to work together to identify attractive investment projects to strengthen bilateral economic ties and increase investment flows between Russia and Serbia. Russian capital and businesses are keen on investing in Serbia.

In addition, the two countries signed an agreement to cooperate on civil nuclear energy, according to state-owned Russian reactor builder Rosatom (Rosatom State Nuclear Energy Corporation). Rosatom continues to expand it business of nuclear cooperation deals in a wide number of countries.

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