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The Abu Dhabi Investment Authority is a Buyer of Hotels

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Michael Maduell, President - Sovereign Wealth Fund Institute

Michael Maduell, President – Sovereign Wealth Fund Institute

The Abu Dhabi Investment Authority (ADIA) is a major purchaser of U.S. institutional real estate through various sub-entities. It often buys partial interest ownerships with leading real estate managers. Gulf sovereign wealth investors are keen to hotels, especially in gateway cities. By interpreting data through the Sovereign Wealth Fund Institute’s transaction database, ADIA has been a direct investor in hotels for quite some time. For example, ADIA through a subsidiary was the majority owner of the 1,190-room Hilton San Diego Bayfront which they sold for $475 million to Sunstone Hotel Investors in mid-April 2011.

“In the range of $500 to $650 billion of sovereign wealth fund assets are allocated to real estate investments, excluding publicly-traded real estate securities,” commented Michael Maduell, President of the Sovereign Wealth Fund Institute. “According to our research and sovereign wealth fund transaction data, hotels are a strategic real estate investment for many Gulf sovereign investors.”

Australian Hotel Real Estate
The demand of Australian hotel real estate has exceeded supply as large foreign buyers seek to acquire assets near business hubs. Due in part to competition between ADIA, local investors, Asian investors and Canadian pension funds, hotel transactions have greatly increased in Australia in the past three years. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Funds and Ownership, KKR Partners with Shinhan Financial

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South Korean financial giant Shinhan Financial Group Co., Ltd. reached a preliminary agreement with KKR & Co. to form a series of global buyout funds that could raise up to 5 trillion KRW. KKR and Shinhan signed a Memorandum of Understanding (MoU) in Seoul in early October. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norwegian Government Recommends SWF Remains at Central Bank

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There was speculation that Norway Government Pension Fund Global (GPFG) could be managed outside of Norges Bank. The Norwegian government shot down this idea and recommended Norway’s GPFG remain in Norges Bank. This recommendation came in the form of a white paper submitted to the Norwegian Parliament, Stortinget.

Norway’s Minister of Finance Siv Jensen, commented in a press release, “The Government proposes a new and modernised governance structure for Norges Bank. Moving forward, this new structure lays the foundations for the sound management of the central bank and of the GPFG.”

Some Central Bank Recommendations

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Invesco Buys OppenheimerFunds for $5.7 Billion

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Invesco Ltd. signed a deal to acquire OppenheimerFunds, Inc. from Massachusetts Mutual Life Insurance Company (MassMutual). In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake. This strategic transaction will bring Invesco’s total assets under management (AUM) to more than US$ 1.2 trillion. The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals. The transaction gives Invesco access to more third-party distribution platforms.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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