Connect with us

TREND: More Direct Sovereign Wealth Money Pouring Into BRIC Countries

Published

on

Sovereign wealth funds are plowing more money into (Brazil, Russia, India and China) BRIC nations, despite economic and political headwinds in emerging markets. Proprietary data from the Sovereign Wealth Fund Institute shows that more direct sovereign fund investment for 2014 is funneling into BRIC countries compared to similar quarters in 2013. According to the Sovereign Wealth Fund Transaction Database, for the first two quarters of 2013, about US$ 4.37 billion of direct sovereign wealth fund investment was allocated toward BRIC countries. For the first two quarters of 2014, BRIC countries received about US$ 4.62 billion. Furthermore, second quarter figures for 2014 are not fully counted for in the database. The 5.7% increase in BRIC direct sovereign wealth fund investment from those similar quarters indicates that sovereign funds remain tepidly optimistic in these dynamic growth markets. This is on the backstop of tightening economic sanctions from the West against Russia, bad loans on the books of Indian banks, real estate bubbles in China and growing economic disparity in Brazil. This is countered with optimism of India’s new Prime Minister Narendra Modi and Russian President Putin’s clearing of troops from Ukraine’s borders, increasing the possibility of easing economic tension.

In 2013, sovereign wealth funds directly invested US$ 18.5 billion in BRIC countries compared to US$ 11.3 billion in 2012.

Sovereign Wealth Fund Direct Transactions into BRIC Countries – Billions USD

Some recent trends for 2014 describe the onset of Chinese financial and consumer companies attracting sovereign wealth capital, especially from Singapore, the Gulf and Norway (each having an office in China). CITIC Pacific Limited’s capital raise attracted multiple sovereign wealth funds and large institutional investors. Temasek’s investment in India’s Star Agriwarehousing shows the attractiveness of public investor capital in select sectors of the country. In addition, the Russian Direct Investment Fund (RDIF) has been able to lure several sovereign wealth funds on some major deals such as the Ust-Luga LPG Terminal Port transaction.

Sovereign wealth funds have been advocating for increased foreign investor quotas in several emerging markets such as China and India. In May 2014, China’s State Administration of Foreign Exchange (SAFE) gave the Abu Dhabi Investment Authority (ADIA) an additional US$ 500 million in QFII quota. In 2013, sovereign wealth funds directly invested US$ 18.5 billion in BRIC countries compared to US$ 11.3 billion in 2012.

Public Asset Owners Feel Pressure on PetSmart

Published

on

Paying big fees compared to traditional equity strategies, sovereign funds and pensions have allocated mounds of capital to private equity firms on buying out North American big-box retail businesses. Many of these private equity firms and advisory firms have also offered “co-investment” opportunities in these retail acquisitions as well. Private equity firms had loaded retailers such as Toys “R” Us and Sports Authority with excessive debt. Sports Authority shuttered in 2016.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Mubadala Sells Stake in Local Ports Operator

Published

on

Abu Dhabi-based Mubadala Investment Company and its emerging markets infrastructure arm, Mubadala Infrastructure Partners, are parting ways with Abu Dhabi Terminals (ADT), selling their 50% combined stake in the hometown shipping operator to remaining shareholder Abu Dhabi Ports (ADP) for an undisclosed amount. Khaled Al Qubaisi – Chief Executive of aerospace, renewables, and information technology at Mubadala – expressed in a statement his confidence in ADT’s future success as a key player in the local economy.

Established by government decree in 2006 alongside its new owner as part of Abu Dhabi’s Vision 2030 plan for economic development, ADT primarily operates the semi-automated Khalifa Port Container Terminal under a 30-year concession it secured in 2012 from ADP, which is mandated to develop and manage all 11 commercial ports in the emirate and hosts some 25,000 vessels every hour.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

SWFI First Read, April 26, 2018

Published

on

Former Obama Cabinet Officials to Advise TPG Rise Fund

Former U.S. Secretary of State John Kerry was named a senior advisor for TPG’s Rise Fund. Kerry’s role will be to help find investments for the fund and advised in areas such as renewable energy. Another Obama administration veteran, former U.S. Secretary of Education Arne Duncan, is also an advisor to the Rise Fund.

Jobless Claims in U.S. Drop to the Lowest Level in 48 Years

According to the U.S. Department of Labor, the rate of layoffs in the country fell in late April to the lowest level since 1969.

ECB Holds Rates Steady

The European Central Bank (ECB) kept interest rates unchanged on April 26, 2018.

Singulato Motors Raises Series C Round

Singulato Motors raised US$ 474 million in a Series C round from a number of investors. Some current backers include TaoYun Beijing Investment Fund, GX Capital and Qihoo 360. Singulato Motors is a Chinese electric vehicle startup.

Thae Khwarg Nears CIO Role at Korea National Pension Service

Thae Khwarg appears to be the top contender for the Chief Investment Officer role at Korea’s National Pension Service. Khwarg is the former head of Baring Asset Management Korea, which is formerly known as SEI Asset Korea. Khwarg was selected by NPS’ chairman for the role and is awaiting approval from South Korea’s Minister of Health and Welfare.

Al Hilal Bank Uncovers Internal Fraud

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.