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SWFI First Read, June 14, 2018

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ECB Draghi Telegraphs Dovish End to ECB QE Bond Purchases

The European Central Bank (ECB) revealed its departure from quantitative easing (QE). The ECB accelerated the move after data showed U.S. retail sales surging in May 2018. The ECB signaled that from September 2018, the pace of bond buying will drop from 30 billion EUR to 15 billion EUR and then drop to zero in December 2018. The central bank president also addressed media that the bank denied plotting against the new Italian government by ceasing to buy its bonds in May. Mario Draghi insistedto reporters there is no conspiracy.

The ECB said in a statement that the central bank would have rates depressed as long that it is needed to make sure the euro zone inflation remains on trajectory to hit the central bank’s target of just below 2%.

Mega Media Merger of AT&T and Time Warner Would Create Large Pool of Retirement Assets

The massive merger between AT&T Inc. and Time Warner Inc. got the go ahead after the U.S. Department of Justice tried to block the deal over anti-trust concerns. The merger, which is expected to close by June 20, 2018, could create a massive pool of retirement plan assets worth US$ 94 billion. The record keeper for the AT&T and Time Warner defined contributions plans is Fidelity Investments.

Ireland Strategic Investment Fund Supports Domestic Whiskey

The Ireland Strategic Investment Fund (ISIF) financially supported the €10m launch of Ilen River Partners’ Irish Whiskey Growth Fund earlier in June. According to a June 6th statement, “The Fund will provide stock-financing loans secured on borrowers’ existing whiskey stock, and tailored to the specific needs of participating businesses.”

Bill Gates Money Flows Into Evolve Biosystems

The Bill & Melinda Gates Foundation led a Series C round in Davis, California-based Evolve Biosystems, a life sciences company. Horizon Ventures also invested in the Series C round.

Abraaj Holdings Files for Liquidation

Troubled private equity firm Abraaj Holdings has filed for liquidation in the Cayman Islands. The filing seeks to appoint PricewaterhouseCoopers (PwC) as the provisional liquidator. In a statement by the firm’s founder, Arif Naqvi, he stated, “The process of court supervised restructuring will take a few months. I will continue to support this orderly process and help ensure the best possible outcomes for all the stakeholders.”

Abraaj Group had also sold off its entire 5.4% stake in Egypt-based Orascom Construction at US$ 8.30 per share – a total value of US$ 52 million.

Thompson, Siegel & Walmsley Goes Internal for Next CEO

Frank Reichel was named CEO of money manager Thompson, Siegel & Walmsley, effective September 30, 2018. He is replacing Horace Whitworth who will remain as the company’s chief financial officer until there is a replacement. Whitworth will also serve in an advisory capacity until he retires in a number of years. Reichel is currently the company’s president and his current position will be filled by firm managing director John Reifsnider.

Japan’s GPIF Awards Nissay Asset Management with ESG Disclosure Mandate

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Increasingly asset owners across the Asia-Pacific region are studying the impacts of environmental, social, and governance factors on listed companies. As more Japanese pensions augment asset allocation to listed equities, the importance of corporate non-financial disclosures and practices becomes clear. These disclosures can have a material impression on company stock prices. In addition, Japanʼs Stewardship Code and Corporate Governance Code in 2014 and 2015 were launched, respectively. These codes helped the (environmental, social, and governance) ESG concept gain momentum in Japan.

Japan’s Government Pension Investment Fund (GPIF), the largest public pension fund in the world, awarded a research mandate to Nissay Asset Management Corporation. The mandate entails studying ESG disclosures. The study will conduct a comparable analysis on ESG standards and practices, while taking into account input from both investors and companies. With around US$ 110.5 billion in assets under management, Nissay Asset Management is owned by Japanese life insurance giant Nippon Life Insurance Company.

As GPIF boosted its allocation to domestic equities, the asset owner took a deeper look into the impact of ESG on equity investing. GPIF is keen on improving efficiencies in Japan’s capital markets. GPIF is a universal owner of stocks, similar in some aspects to what Norway’s Government Pension Fund Global (GPFG) does.

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Norges Bank Real Estate Management Buys Central Paris Property

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Norges Bank Real Estate Management, the real estate unit of Norges Bank Investment Management (oversees Norway Global Pension Fund Global), has signed an agreement to acquire a 100 percent interest in an office property located on 54-56 rue la Boétie in central Paris.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Schlumberger Gets Closer to Eurasia Drilling Company

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Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and American oilfield services giant Schlumberger (SLB) have planned a deal to invest in Russia’s Eurasia Drilling Company Limited. RDIF CEO Kirill Dmitriev made the announcement. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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