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SWFI First Read, March 4, 2018

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HKMA’s Exchange Fund Has Best Year in Nearly a Decade

The Hong Kong Monetary Authority’s Exchange Fund generated an unaudited 7.1% annual return for 2017 versus a 2.0% annual return for 2016. This is the best annual return for the fund since 2007 at 11.8%, which followed a 2008 return of -5.6%. At the end of September 2017, HKMA’s Exchange Fund had 214.5 billion HKD in private equity (141.1 billion HKD) and real estate (73.4 billion HKD).

UPDATED: Axa to Buy XL Group

March 5, 2018 – UPDATED: French insurance giant Axa SA agreed to buy U.S. property and casualty insurer XL Group Ltd. for US$ 15.3 billion in cash

PREVIOUS: French insurance giant Axa SA is in negotiations of possibly buying U.S. property and casualty insurer XL Group Ltd., which is headquartered in Hamilton, Bermuda. XL Group has a market value of around US$ 11 billion.

U.S. Moves to Defend Steel and Aluminum Industry, EU Threatens

The United States government moved to put a 25% duty on steel and 10% on aluminum, after decades of trade abuse in the industry, according to the U.S. government. In response, European commission president Jean-Claude Juncker warned they could target American brands such as Levis, Harley-Davidsons and Kentucky bourbon whiskey. Countering, the U.S. President warned they could put the lucrative European export auto industry in the country’s crosshairs.

On March 3, 2018, U.S. President Donald Trump tweeted, “The United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”

Lighthouse Investment Partners to Buy Most of Mesirow Advanced Strategies

Lighthouse Investment Partners, LLC agreed to acquire substantially all of the assets of Mesirow Advanced Strategies, the multi-manager hedge fund division of Mesirow Financial, an employee-owned firm that is trying to focus more on its core business. The deal is expected to close mid-year 2018. Following the expected completion of the transaction, Mesirow Financial is expected to serve as a distribution partner to Lighthouse. Mesirow Advanced Strategies has around US$ 8 billion in assets under management. In June 2017, Palm Beach Retirement System dropped Mesirow Advanced Strategies in an US$ 8 million hedge fund-of-funds portfolio.

Senate Shoots Down $94 Trillion Green New Deal, 57 to 0

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The U.S. Senate voted down U.S. Representative Alexandria Ocasio-Cortez’s Green New Deal. The tally was 57 (No) to 0 (Yes). 0 Democrats voted for the deal. 43 senators voted present.

Democratic Senators Joe Manchin of West Virginia; Kyrsten Sinema of Arizona; and Doug Jones of Alabama all voted no as did Independent Senator Angus King.

Even Senator Ed Markey of Massachusetts, a co-sponsor of the original resolution, did not vote “Yes” on the bill.

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OppenheimerFunds to Lose 850 Jobs in Mile High City

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Invesco Management Company, upcoming owner of OppenheimerFunds, is reducing Oppenheimer’s Denver office by a jaw-dropping 850 employees. The employees losing their jobs represents 85% of the staff in the area. The Oppenheimer office, which resides in Centennial, employs 1,000 workers. Invesco’s US$ 5.4 billion purchase of the company closes in May 2019. As is typically the case in corporate acquisitions, redundancies in staff are being targeted to improve the overall economic performance of the new, combined organization. Invesco suspects that US$ 475 million in synergies can be reached through layoffs and other measures.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Keppel Land China and Alpha Investment Partners Acquire Majority Stake in Yi Fang Tower

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Alpha Asia Macro Trends Fund III, Keppel Land China Limited (part of the Keppel Corporation), and a number of investors purchased the Yi Fang Tower mixed-use complex for 4.6 billion RMB. The tower is located in Shanghai in the historic Bund area. Alpha Asia Macro Trends Fund III is taking 42.1% stake, while Keppel Land is taking a 29.8% stake in the asset. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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