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SWFI First Read, January 4, 2017

Trump to Nominate Jay Clayton as SEC Chairman

U.S. President-elect Donald Trump is putting forward Jay Clayton, to head the U.S. Securities and Exchange Commission (SEC). Clayton is a partner at law firm giant Sullivan & Cromwell LLP. If confirmed by the U.S. Senate, he would replace Mary Jo White.

“Jay Clayton is a highly talented expert on many aspects of financial and regulatory law, and he will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time,” Trump said in a statement.

Mackenzie Financial Corporation Acquire Stake in China AMC

IGM Financial Inc. is keen on getting exposure to China’s growing asset management sector and diversify its business ex-Canada. On December 29, 2016, IGM Financial announced that its subsidiary, Mackenzie Financial Corporation, has entered into an agreement to acquire a 10% interest in China Asset Management Co., Ltd. for approximately 2.4 billion RMB (C$ 468 million). Mackenzie Investments has the opportunity to increase its equity position by an additional 3.9% in January 2017 through another purchase agreement. Both transactions involve separate non-strategic shareholders that are state-owned enterprises in China. In addition, Mackenzie Investments, which is part of Mackenzie Financial Corporation, has had a relationship with China Asset Management Co., Ltd. since 2011. BMO Capital Markets acted as financial advisor to IGM Financial on this transaction.

Vitol Inks Loan Deal with National Iranian Oil Co.

The lifting of Iranian sanctions has been a boon to energy companies in Europe. Rotterdam, Netherlands-based Vitol, the largest oil trader in the world, inked a deal with the National Iranian Oil Co. (NIOC). Vitol is loaning an equivalent of US$ 1 billion in euros guaranteed by future exports of refined products. The Vitol-NIOC pre-finance deal was initially signed back in October 2016.

New Mexico Public Employees’ Retirement Association Dumps Cliffwater for Two Consultants

The New Mexico Public Employees’ Retirement Association hired two investment consultants, replacing the incumbent consultant Cliffwater. TorreyCove Capital Partners will assist the pension in illiquid credit and credit-oriented hedge funds, while Albourne Partners will assist the pension in searches for real asset managers and hedge funds. The New Mexico Public Employees’ Retirement Association has a target 15% credit allocation and a target 20% allocation to real assets.

GTCR Combines LiquidPoint with Dash Financial

Private equity firm GTCR, based in Chicago, owns a controlling interest in brokerage firm Convergex. GTCR is contributing LiquidPoint, Convergex’s Options Trading and Technology business, to merge with Dash Financial, a trading, analytics and execution technology provider. These are two complementary businesses. The combined entity will operate as Dash Financial Technologies and be majority owned by GTCR. The independent company will be led by Peter Maragos as CEO and Ben Londergan as President. Dash Financial was advised on the transaction by Raymond James and Sidley Austin LLP served as Dash Financial’s legal counsel. Kirkland & Ellis LLP served as legal counsel for GTCR and Convergex.

ConvergEx Group, LLC acquired LiquidPoint in July 2007.

AP Pension Invests in Island RE Development

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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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Concerns Raised at Potential BlackRock Takeover of CalPERS’ Private Equity

The California Public Employees’ Retirement System (CalPERS) has been analyzing options on what to do with its massive US$ 26 billion private equity program. The pension system has embraced the mantra of reducing cost, reducing complexity and reducing risk, the hallmark of its program called “INVO 2020”. CalPERS also wants less, but more strategic relationships with external money managers. At one point, CalPERS was contemplating increasing its direct investment staff to model Canadian pension funds such as Canada Pension Plan Investment Board (CPPIB), OMERS and the Ontario Teachers’ Pension plan. The pendulum has begun to swing the other way as reported earlier by SWFI research staff.

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