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SWFI First Read, January 22, 2018



Superbowl Match up – Patriots vs. Eagles

Tom Brady and the New England Patriots will get another opportunity for a 6th Super Bowl win. The Patriots face off with the Philadelphia Eagles, after beating the Jacksonville Jaguars.

UBS Plans 3-Year Stock Buy Back Program

UBS Group AG revealed plans to buy back a total of 2 billion CHF worth of stock over a 3-year period starting in March 2018. UBS is also taking a 2.87 billion CHF tax charge due to a change in U.S. tax law. Other banks such as Credit Suisse, Deutsche Bank and Citigroup, also revealed one-time tax charges as well. Additionally, UBS plans to commit 720 million CHF into its Swiss pension fund in three phases in years 2020, 2021 and 2022.

Pennsylvania Public School Employees’ Retirement System to Commit to Mega Blackstone Infrastructure Fund

Pennsylvania Public School Employees’ Retirement System is one of the investors in the massive Blackstone Infrastructure Partners, which touts Saudi Arabia’s Public Investment Fund (PIF) as a key fund limited partner.

Egypt Eurobond Offering Gets Closer

In late December, the Egyptian government selected five banks for its planned dollar-denominated Eurobond issuance worth some US$ 3 billion to US$ 4 billion. These banks arranging the financing are HSBC, JPMorgan, Citibank, Morgan Stanley and First Abu Dhabi Bank. Earlier in 2017, Egypt had sold US$ 7 billion in bonds. Egypt continues to be plagued by a lack of foreign liquidity mostly in U.S. dollars.

Sultan of Johor Invests in Sri Lankan Healthcare District

Sultan Ibrahim Ismail Ibni Sultan Iskandar is the Sultan of Johor. He and Malaysian entrepreneur Patrick Lim Soo Kit formed a company called Pharma Zone Limited to enter into a joint venture with the State Pharmaceuticals Manufacturing Corporation of Sri Lanka (SPMC). SPMC and Pharma Zone are constructing the first-ever Pharmaceutical Manufacturing Zone of Sri Lanka in the Welipenna area of the Kalutara District as an investment that totals over US$ 10 million. This deal was revealed on January 9, 2018.

The Sultan of Johor is making the investment through his entity called Inti Kemuncak Sdn Berhad.

Vietnam SCIC Sells Down Stake in Vinamilk

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How ESG Considerations Can Drive Voting at the Board Level



The Council of Institutional Investor’s spring conference for 2018 – held this week in Washington D.C. at the Omni Shoreham Hotel – was packed with member-hosted panels, where nearly 400 of the top investment professional, regulators, and corporate governance experts gathered together to share their insights and engage in forward-looking discussions on how to drive a multi-stakeholder approach to responsible investment over the long-term.

Sovereign Wealth Fund Institute (SWFI) had the opportunity to attend several breakout sessions, including one presented by Maryland-based Institutional Shareholder Services that sought to address one of the most pressing challenges facing institutional investors today: How can environmental, social, and governance (ESG) criteria help drive voting at the board level? Moderated by Georgina Marshall, Head of Global Research at ISS, panelists provided a diverse array of perspectives on how to harness ESG considerations as an effective decision-making tool.

Player-Coach Model

For Bonnie Saynay, Global Head of Responsible Investments at Invesco, fostering an environment conducive to communication with investment teams using a “player-coach” model is critical. Moreover, Saynay warned investors of thinking too broadly on ESG considerations, and to instead focus in on the criteria that is most important to them as an organization, and to then tailor their stewardship practices to match those priorities: “If everything is important, nothing is important,” she said.

Clare Payne, head of corporate governance for North America at Legal & General Investment Management, highlighted the importance of procuring the latest ranking data from a number of different providers, as well as how to develop one’s own internal system for scoring so as to cut through the clutter and provide a contextualized framework for making investment decisions on your own terms.

Remuneration is the name of the game for Robbie Miles, Vice President and ESG analyst at Allianz Global Investors. Amid the ever broadening scope of influence that responsible investment commands, Miles urged attendees to work with their managers on mandates that link compensation to the long-term performance of the fund, as well as long-term holding periods.

Wrapping up the panel was Stu Dalheim, Vice President of Shareholder Advocacy at Calvert Research Management, advocated for diversity at the board level across a number of different metrics – including ethnicity, gender, and professional backgrounds – in order to reflect the reality of their client base, as well as provide an apparatus for robust debate and adaptation in an ever-changing business environment.

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Macquarie to Buy ValueInvest Asset Management from Fynske Bank



On March 12, 2018, Macquarie Investment Management, the investment management unit of Macquarie Group, revealed a deal that they acquired Luxembourg-based ValueInvest Asset Management S.A. from Denmark-based Fynske Bank A/S. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Federal Reserve Orders ICBC to Tighten AML Policies



On March 12, 2018, the U.S. Federal Reserve issued an enforcement action that the Industrial and Commercial Bank of China Limited (ICBC) is not doing enough regarding anti-money laundering (AML) protections and ordered the Chinese bank to toughen its checks on illicit funds. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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