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
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.
In late February, the Korea Investment Corporation (KIC) inked an agreement to manage some of Korea Post’s global assets. KIC also seeks to provide investment training and research to Korea Post.
“As part of effort for Korea Post to allocate part of global investment assets to KIC, both agencies agreed to discuss details during the first half of this year, including the manner in which joint investment and asset allocation will be made,” KIC said in a statement.
San Francisco-based DoorDash Inc., a food delivery company, raised US$ 400 million in a Series F investment round. The investment round was led by Singapore’s Temasek Holdings and San Francisco-based Dragoneer Investment Group, LLC. Post-raise, DoorDash has raised US$ 1.4 billion in equity capital. This gives DoorDash a post-money valuation of US$ 7.1 billion. DoorDash competes against publicly-traded company Grubhub, Postmates, and UberEats, a service of Uber Technologies.
Other investors in the Series F round include SoftBank Vision Fund (managed by SoftBank Group), DST Global, Coatue Management, Singapore’s GIC Private Limited, Sequoia Capital, and Y Combinator.
Canada Pension Plan Investment Board (CPPIB) and U.S. private equity firm Sterling Partners are exiting their investment in Livingston International Inc., an international trade-services firm based in Toronto, Ontario, which specializes in customs brokerage, freight forwarding, and trade consulting. Livingston International is Canada’s largest customs broker and third-largest entry filer in the United States.
U.S. private equity firm Platinum Equity is buying Livingston International from CPPIB and Sterling Partners. Platinum Equity is a private equity firm founded by Tom Gores in 1995.
Livingston International was founded in 1945 by Gerry Livingston. In 2002, the company went public after backing from CAI Capital Partners. In 2010, CPPIB and Sterling Partners acquired the company for US$ 324 million. On May 8, 2012, Livingston International acquired New Orleans, Louisiana-based M.G. Maher & Company, Inc. and MCLX, Inc. Maher is an international freight forwarder, customs broker and logistics provider. In 2013, the owners of Livingston International refinanced debt raising US$ 555 million in senior secured credit facilities.
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