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SWFI First Read, November 16, 2017

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GIC Increases Ownership in DLF through Open Market

GIC Private Limited acquired 1.201 million shares of DLF Ltd., a real estate developer in India, through the open market. GIC boosted its stake in DLF from 4.94% to 5.01%.

Alaska Permanent Fund Corporation is Open to Getting Access to Private Equity GP Interests

The Alaska Permanent Fund Corporation (APFC) is keen on possibly acquiring stakes in general partners of private equity firms, a tactic conducted by larger pension and sovereign wealth fund investors. APFC is already committed to funds that take strategic ownership stakes in asset management companies such as Blackstone Strategic Capital Holdings and Dyal Capital Partners III.

Mubadala Plans to Commit More Capital to R&D in AR&I

Mubadala Investment Company revealed plans to invest 82.5 million AED in research and development (R&D) in its aerospace, renewables and information technology (AR&I) platform over the next five years. These technologies include digital manufacturing, 3D printing and advanced materials.

Pak Arab Refinery Limited Seeks Second Refinery for Country with Mubadala’s Help

Pak Arab Refinery Limited (Parco) seeks to form a joint venture with Mubadala Investment Company to build a new refinery with a capacity of 250,000 barrels per day. Parco is 40% owned by Mubadala and 60% owned by the Pakistan government. The total investment cost for the refinery is estimated at US$ 6 billion with a completion date targeting 2023. Pakistan only has one refinery, the Parco Mid-Country refinery, which was built in 2000 at a cost of US$ 886 million.

Ireland Strategic Investment Fund Makes Co-Investment in Kaseya

The Ireland Strategic Investment Fund (ISIF) is to invest €19 million in Kaseya Limited, a provider of complete IT management solutions for managed service providers (MSPs) and midsized enterprises. The capital infusion hopes to create 130 new jobs in Ireland. Kaseya is majority owned by global software investment fund Insight Venture Partners. ISIF is also an investor in Insight Venture Partners’ funds, committing US$ 100 million in October.

Maiden Lane I Ends, Federal Reserve Aims to Shrink Balance Sheet

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The U.S. Federal Reserve’s balance sheet has been set to decline automatically since 2017, as the central bank has been liquidating funds from its US$ 4 trillion in Treasury bonds and mortgage-backed securities. As holdings matured, the Fed refrained from reinvesting them. This amounts to US$ 40 billion in monetary tightening monthly. Meanwhile, interest rates have slowly, and continuously, risen. The maturation of these Fed assets could exert upward pressure on long-term yields.

Mortgage rates, applications, and home sales have been falling, likely due to the rising rates. While rates are still historically low, U.S. President Trump has criticized the rate hikes. However, the Fed has no interest in changing course, and rates are set to continue to rise. According to Fed meeting minutes, “The Chairman suggested that the Committee would likely resume a discussion of operating frameworks in the fall.”

The size and content of the Fed balance sheet going forward will be a point of discussion for Chairman Jerome Powell. While there is no end in sight for the Fed’s plans to tighten economic policy, changing conditions may warrant further examination. With the U.S. stock market thriving, there is no indication that tightening has had a material impact on the economy. However, conventional wisdom asserts that the Fed will raise rates “until something breaks.” Market commentators have also suggested that, in the event of an emergency, the Fed will have a harder time stepping in due to the size of its balance sheet. A large part of the Fed’s monetary strategy is based around communications, and Fed-watchers have made a habit of hanging on every word. The Fed announced a shrinking balance sheet well in advance, and made gradual moves in that direction. The process has been smooth thus far. The Fed’s tightening will reach its peak, US$ 50 billion, in October. It is unclear exactly how much stimulus is still needed in the economy to reach the Fed’s 2% inflation target. The Fed’s easing policies have been criticized for the lopsided benefits they provided, more for Wall Street than Main Street. However, the easing will reduce their role in the market.

The End of Maiden Lane I

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QIA Gets a New CEO

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Sheikh Abdullah Bin Mohammed Al-Thani exited as CEO of the Qatar Investment Authority (QIA). He has been appointed as minister of state by Amiri Order No. (4) of 2018.

Mansoor bin Ebrahim Al-Mahmoud is appointed as the new CEO of QIA. He held positions in various organizations such as CEO of Qatar Development Bank and worked at Qatar Museums.

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SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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