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The New Russia-China Investment Fund

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In the past few years, China and Russia have increasingly been improving bilateral economic ties.  The China Investment Corporation (CIC) is making its presence known in Russia. CIC has already invested in a number of small scale investments in Russia and around Central Asia. They purchased a stake in Russia’s VTB Bank for US$ 100 million. The CIC is moving forward to invest US$ 1 billion with the Russian Direct Investment Fund (RDIF). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Should Pension Giants Still Back Low-Vol Strategies?

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As occidental central banks cautiously signal a retreat from loose monetary policy, will there be greater bouts of volatility in the near future? The low-volatility trade has worked like magic – post the global financial crisis.

The early February sell-off rankled the feathers of U.S. pension trustees, sending plausible-sounding studies in low-vol strategies to the toilet. CBOE’s Volatility Index, or VIX, closed high during the period of market mayhem. For CIOs, should the selling of volatility continue, or should the trade be nixed?

Selling risk or volatility has been profitable for a cadre of U.S. pensions as they sought yield in a low interest rate world of quantitative easing. The falling of interest rates to near zero, zero and even negative in some countries, forced asset owners to rethink yield strategies to help pay for liabilities such as pensions, insurance claims or college expenditures. Public pension funds in the United States and even in Europe have augmented investment proportions in real estate, credit and private equity at the expense of lower-yielding bond instruments over the past 20 years. Investment giants like CPPIB and the Abu Dhabi Investment Council have participated in selling off risk via investments in the reinsurance industry, while smaller pensions have utilized option strategies.

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Temasek Invests in Shaver Company Harry’s

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Harry’s, the subscription shaving company that is taking on companies such as Gillette, which is owned by the multi-national corporation Procter & Gamble, has raised US$ 112 million in a new round of financing.

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New CEO at Dubai Holding

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In early February, Dubai Holding LLC, an entity that once oversaw an aggressive Dubai International L.L.C. buyout player, hired a new chief executive officer. Dubai Holding hired Amit Kaushal as CEO, who replaces Edris Alrafi.

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