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Sovereign Wealth Funds Have an Active First Quarter 2015

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CORRECTION – April 29, 2015: GIC invested in the TCW Direct Lending Fund and did not take a stake in the firm TCW.

With recent noteworthy deals of sovereign wealth funds buying up massive real estate assets such as Norway’s SWF deal with Prologis on acquiring KTR Capital for US$ 5.9 billion or the Abu Dhabi Investment Council’s role in allocating to Spotify’s latest round, wealth funds continue to exhibit a greater role in direct investments. Some notable first quarter deals in 2015 include the Qatar Investment Authority’s (QIA) role in buying the remaining portion of the Porta Nuova Development in Milan. The QIA, through Qatar Holding, bet big on the monumental urban rejuvenation development. Another colossal real estate deal in the first quarter 2015 is the China Investment Corporation (CIC) partnering with LaSalle Investment Management in acquiring the Meguro Gajoen complex in Tokyo for approximately 140 billion yen. This deal highlights sovereign wealth funds’ expanding appetite for Tokyo properties. Other sovereign wealth funds, such as Norway’s Government Pension Fund Global (GPFG) have indicated a deep desire for Japanese office properties for its portfolio. Norges Bank Investment Management (NBIM), the manager of Norway’s GPFG, went so far to put up job postings for Asian real estate specialists.

Direct Sovereign Wealth Fund Transactions – Quarterly Comparison

sovereign wealth fund deals
Source: Sovereign Wealth Fund Transaction Database, Billions USD

This quarterly 10% increase from 2014 to 2015 demonstrates sovereign wealth funds slightly engaging in larger and more frequent direct transactions.

Sovereign Wealth Funds Direct Deals Up 10% from 1Q 2014

According to SWFI’s proprietary Sovereign Wealth Fund Transaction database, excluding fund commitments, sovereign wealth funds so far have invested in US$ 22.85 billion in direct transactions for the first quarter 2015. This is compared to US$ 20.76 billion in the first quarter of 2014. This 10% quarterly increase from 2014 to 2015 demonstrates sovereign wealth funds slightly engaging in larger and more frequent direct transactions.

Sovereign Wealth Funds Hit the Venture Capital Trail

Sovereign wealth funds like Temasek Holdings have made strides becoming the latest investor class to have an impact in the world of venture investing. Even funds like QIA investing in Uber, a taxi technology service, shocked traditional asset managers. In the first quarter of 2015, Temasek lead a Series D round for Palo Alto-based Pluribus Networks. Temasek also invested in startups like Jet.com, an e-commerce company. Trying to tackle all parts of the venture investing spectrum, Temasek purchased SVB Financial Group’s finance business focused on venture debt in India for around US$ 46.4 million.

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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