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Sovereign Wealth Fund Direct Transactions Highest YTD Since 2008

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Direct Sovereign Wealth Fund Transactions – Billions USD

sovereign-wealth-fund-deals-halfs-aug2014
Source: Sovereign Wealth Fund Transaction Database – Extracted August 5, 2014

Direct deals and transactions by global sovereign wealth funds touched US$ 50.02 billion in the first half of 2014. This is a 23.1% increase in transactions comparing it to the first half of 2013 (US$ 40.64 billion). The highest first half on record of direct sovereign wealth fund transactions was the first half of 2008 (US$ 51.05 billion), a significant portion of that amount was attributable to the bank bailouts.

Singapore is the lead acquiring nation for sovereign wealth fund direct transactions with US$ 21.21 billion for the first half of 2014. This is followed by the United Arab Emirates and China. In 2014, Temasek Holdings opened a New York office.

Big Deal: Temasek-AS Watson Transaction

Singapore’s Temasek Holdings US$ 5.7 billion purchase of a 25% stake in AS Watson Holdings is the biggest sovereign wealth fund deal in the first half of 2014. Another notable deal is Rotterdam-based Vitol SA and the Abu Dhabi Investment Council move to acquire Shell’s Geelong oil refinery and local service station network in Australia.

Hot Sector, Financials Wins

Financials is the most targeted sector for direct sovereign wealth fund transactions with US$ 12.9 billion recorded in the first half of 2014. This compares to US$ 9.03 billion from the first half of 2013. Consumer discretionary and consumer staples follow with US$ 9.64 billion and US$ 7.37 billion, respectively.

Some lead financial advisors in terms of transaction amounts for the first half of 2014 for all public investor transactions (sovereign wealth funds and public funds) include: Goldman Sachs, Credit Suisse, DBS, HSBC, Bank of America Merrill Lynch and Morgan Stanley.

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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