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Why Alaska’s Permanent Fund Should Buy Russell’s Investment Consulting Arm

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When Russell Investments was on the selling block, the buyer universe was limited because potential acquirers did not want the whole enchilada. Many buyers wanted the crown jewel, the high-margin index business of Russell. Why? US$ 5.2 trillion worth of assets are benchmarked against Russell indices. When the London Stock Exchange Group (LSE) acquired Russell Investments for US$ 2.7 billion, it was apparent the exchange wanted Russell’s highly profitable index business. The deal enabled LSE access as a marquee player in U.S.-listed exchange-traded funds. The LSE has hired Greenhill & Co. and Barclays on the sale process for the rest of Russell’s businesses, hoping to fetch around US$ 1.5 billion. The LSE has also indicated they might not sell the unit.

In 2013, Russell Investments’ index business posted US$ 170 million in revenue with almost a 50% profit margin. This is compared to Russell’s consulting division, which generated around US$ 40 million in 2013 and profits in the 15% to 17% range. Just the profit margin difference between the divisions, makes a convincing business case for LSE to dump the rest of Russell Investments.

“Nowadays people know the price of everything and the value of nothing.”
― Oscar Wilde, The Picture of Dorian Gray

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Altitude Infrastructure Gets Financing on Haute-Garonne Network Project

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Altitude Infrastructure SAS inked a 25-year concession agreement and closed a debt financing package for the deployment and maintenance of an ultra-high-speed broadband network in Haute-Garonne. Haute-Garonne is a department in the south of France.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Guggenheim Partners Agrees to Acquire Millstein & Co.

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On July 11, 2018, Guggenheim Partners inked a deal to acquire New York-based Millstein & Co., L.P., an advisory firm formed by Jim Millstein. Millstein will become co-Chairman of Guggenheim’s securities business. Millstein & Co. will become part of Guggenheim Securities, the investment banking division of the company. Ronen Bojmel will lead the combined Guggenheim restructuring team.

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GIC Holds Steady, Maintains Cautious Investment Stance

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Singapore’s GIC Private Limited returned a 5-year return of 6.6% ended March 31, 2018. At March 2018, GIC had increased cash and nominal bonds up 2% to 37% of the total portfolio, while lowering exposure to developed market equities from 27% to 23%.

GIC CEO Lim Chow Kiat commented in his annual letter in the FY 2017-2018 report that, “In view of the high asset valuations, the increased risk of monetary policy tightening across different jurisdictions and the elevated uncertainty, we maintain a cautious investment stance. Nevertheless, we remain ready to take advantage of potential dislocations. The jump in market volatility experienced in early 2018 offered an indication of potentially bigger market turbulence and opportunities in the future.”

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