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SWFI First Read, September 4, 2018

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Bank of England Governor Carney Offers to Stay on for “Smooth Brexit”

Bank of England Governor Mark Carney gave indications he is willing to stay in his position after his term expires in 2019. Carney informed the U.K. Treasury Committee that he was happy to do whatever he could “to promote a smooth Brexit and an effective transition at the Bank”.

Fidelity Zero Expense Funds Gain Traction

In early August, Fidelity Investments revealed its first no-fee index fund. The fund has a zero expense ratio to individual investors. As of August 31, 2018, since its inception that month, the fund attracted US$ 753.5 million in the Fidelity Zero Total Market Index Fund, while the international fund called Fidelity Zero International Index Fund raised US$ 234.2 million. Fidelity’s competitors such as Vanguard and Charles Schwab do not have zero expense funds. Charles Schwab’s Total Stock Market Index Fund has next expenses of 0.03%, while the Vanguard Total Stock Market Index Fund has a net expense of 0.14%.

CalSTRS Preps for Private Equity Overhaul

The California State Teachers’ Retirement System (CalSTRS) plans to have approval of an overhaul of its private equity program which is estimated at US$ 18.5 billion. CalSTRS could be opting for more co-investments and longer holding periods of investments.

Tikehau Capital Names Emmanuel Laillier as PE Head

Tikehau Capital named Emmanuel Laillier as head of private equity. This is a new position. Previously, she was a Managing Director and Board Member of Eurazeo PME.

Trump’s First Year Cements M&A Boom, Will it Last?

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Despite a recent downdraft in the stock market, economic signs suggest that the nation has prospered since U.S. President Donald Trump was elected. His first year was marked by mega mergers and acquisitions, and renewed hopes for deregulation and tax relief. M&A deals totaled US$ 1.2 trillion in the year since Trump was elected in a stunning upset, which compelled former U.S. Secretary of State Hillary Clinton to pen the book, “What Happened.” The total number of deals also set a record. In sum, nearly 13,000 deals have been made between the election and the end of the 2017 calendar year. Business sentiment was clearly buoyed by Trump’s election, with investors and organizations cheering the business-friendly environment to come. Unemployment dropped to a low of 4.1% in 2017, before further falling to 3.7% in 2018. This has been described as “full employment.” The unemployment rate will only fall to a certain level because there are always employees looking for something new and leaving jobs they hold. The stock market has also done well under Trump. Not since the 1960’s was volatility as low as it was during the early part of his presidency. Even with the swoon over the last several weeks, the market is still up substantially since Trump’s election. Despite consistent pessimistic headlines on major financial news sites, Amazon is still moving ahead with its massive #2 headquarters, while Google is planning a gigantic development in his core home of Mountain View, California.

Yet, controversy swirls as former U.S. President Barack Obama declared, “When you hear how great the economy is doing right now, let’s just remember when this recovery started.” [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ayatollah Khamenei Orders Central Bank Governor to Increase Value of the Rial

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Iran Supreme Leader Ayatollah Ali Hosseini Khamenei requested the Central Bank of Iran to boost the value of the Iranian rial, according to the central bank’s governor. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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SWFI First Read, December 8, 2018

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UBS Trumbull Property Fund Faces Redemption, MassPRIM Benefits

Massachusetts Pension Reserves Investment Management Board (Mass PRIM) Allianz Real Estate, and Beacon Capital Partners acquired the Exchange Place skyscraper in Boston has been sold for US$ 845 million from UBS Realty Investors. UBS Realty, part of UBS Group AG, acquired the 53 State Street office tower in December 2011 from Brookfield Office Properties for US$ 610 million. Tenants of the property include Morgan Stanley, The Boston Globe, Hill Holliday, and Nixon Peabody. The property was a major holding of the open-ended fund called UBS Trumbull Property Fund.

MassPRIM will own 49% of the property.

Tower Hamlets Pension Fund Awards Equity Protection Mandate to Schroders

In September 2018, Tower Hamlets Pension Fund awarded Schroders with a mandate for a risk management solution for £700 million in an equity protection strategy. This covers about half of the fund’s portfolio of £1.4 billion. The pension fund’s consultant is Mercer.

Ebola Spreads in the Congo

The second-largest Ebola outbreak in world history has spread to Butembo, a city in eastern Congo with more than 1 million inhabitants.

NZSF Board Member Joins Board of NZX

The NZX (New Zealand Stock Exchange) board of directors named Lindsay Wright as lead independent director. She is Deputy Chair of the Board of the Guardians of the New Zealand Superannuation Fund.

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