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What is the Probability of Saudi Arabia Pulling Out of U.S. Assets?

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The government of Saudi Arabia is a major foreign investor in the United States, especially in U.S. sovereign debt. They have been buying U.S. since their oil boom really took off. For example, in 1974, Saudi Arabian Monetary Agency (SAMA) purchased US$ 600 million worth of Federal National Mortgage Association (Fannie Mae) debentures through the Federal Reserve Bank of New York. SAMA also participated in many bond deals with U.S. corporations over the decades. Dumping Treasuries en masse, or in periodic chunks, would cause destabilization in financial markets, but what is the probability of this occurring? Saudi Arabia’s biggest concern is the freezing of assets, a legitimate concern held by many foreign public institutional investors. A Libya, Iran or even Russia style of freezing of assets would have a negative impact for the Saudi Arabian economy. Typically asset freezes are used as political weapons in response to international crises, like the Libyan revolution (Libyan Investment Authority’s assets were frozen) or during the 1979 Iranian hostage crisis, in which U.S. President Jimmy Carter issued a declaration in November of that year. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

White House Nominates Heath Tarbert for CFTC Chairman

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The White House announced Heath P. Tarbert will be nominated to serve as Commissioner and Chairman of the Commodity Futures Trading Commission (CFTC). Tarbert currently serves as Assistant Secretary for International Markets at the U.S. Treasury Department. Before joining the U.S. Treasury, Tarbert was a Partner at law firm Allen & Overy. Tarbert was confirmed by the U.S. Senate for his current Treasury post at 87 (yes) to 8 (no).

Upon Senate confirmation, Tarbert’s CFTC term would start on April 14, 2019 and last for five years. Tarbert is taking over from J. Christopher Giancarlo whose term ends in April 2019. Tarbert will need a U.S. Senate confirmation to take the head CFTC post.

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KIA Could Sell Stake in North Sea Energy Business

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The Kuwait Investment Authority (KIA), through its unit Wren House Investment Management, is nearing a deal to sell a 40% stake in its North Sea energy business to JPMorgan Asset Management. In July 2018, KIA closed on a deal to acquire oil and gas pipeline firm North Sea Midstream Partners from ArcLight Capital.

More details to follow –

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Pensioenfonds PGB Hires BMO Global for Equity Protection Strategy

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Pensioenfonds PGB is a Dutch multi-sector pension fund. PGB awarded a mandate to implement a protection strategy for its €12 billion equity portfolio to BMO Global Asset Management. PGB is a €26.5 billion fund. PGB has been using BMO Global’s responsible engagement overlay since 2017.

The Chief Investment Officer of PGB is Harold Clijsen.

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