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Sovereign Wealth Funds Have an Active First Quarter 2015

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, 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.

SWFI First Read, December 15, 2017

Gaw Capital Sells Cross Tower Shanghai Building

Hong Kong-based Gaw Capital Partners has agreed to sell the Cross Tower, a 24-storey commercial building in Shanghai, to World Union Investment Management, for 2.66 billion RMB (US$ 402 million). The tower is located in the Huangpu district.

RDIF Portfolio Company Geopharm Plans to Increase Insulin Production

Russia-based Geopharm is a portfolio company of the Russian Direct Investment Fund (RDIF). Geopharm signed a special investment agreement with the City of St. Petersburg, Russia. Geopharm plans to invest more than 3.3 billion rubles in building a complex to meet insulin production demands.

Norway’s KLP to Exclude Companies with Oil Sands Extraction via Revenue Threshold

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NZ Super Resumes Government Contributions

The New Zealand Superannuation Fund (NZ Super) has resumed receiving contributions from the New Zealand government in the face of rising obligations as an increasing proportion of the country’s population approaches retirement. According to a statement released by the fund’s managing Board of Guardians, the government plans on investing US$ 5.3 billion into NZ Super between now and June of 2022, with the first payment scheduled for December 15, 2017.

Policymakers believe the resumption of government contributions, which were halted in July of 2009, is expected to ease the burden on the country’s current taxpayers and future generations. Withdrawals from NZ Super are expected to peak in 2078, at which point the fund will be covering 12.8% of New Zealand’s pension obligations. The new wave of contributions will initially be invested in passive, low cost equity and bond investments, according to Catherine Savage, Chair of the Guardians.

Recent Performance & Leadership Change

NZ Super has enjoyed one of its best annual performances since its founding in 2001, with a reported return of 20.7% before tax for a 12-month trailing period ended June 30, 2017, up 5 billion NZD (US$ 3.6 billion) compared to 2016. NZ Super generated 21.85% annual return in its global equities, developed market portfolio, according to its 2017 annual report.

NZ Super faces a changing of leadership in the coming year with the exit of chief executive Adrian Orr, who will leave the Fund officially in March of 2018 to serve a five-year term as Governor of the Reserve Bank of New Zealand. Mr. Orr has earned a spot numerous times in the Sovereign Wealth Fund Institute’s Public Investor 100 annual ranking over the years, most recently in 2017 at #3.

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iZettle Raises US$ 47 Million in Series E, Prepares for 2018 Listing

Card transaction platform iZettle AB has raised another US$ 47 million in Series E funding, this time with new backing from Sweden’s AP4 and early-stage venture capital firm Dawn Capital. Previous investors in the Stockholm-based payments business include American Express, MasterCard, Intel, and Spain’s Santander Group. With US$ 235 million in equity to date, iZettle is quickly approaching an estimated valuation of US$ 1 billion.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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