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Why Sovereign Funds are Cold on Deutsche Bank

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Very few sovereign funds are heavily invested in Deutsche Bank stock. One can count Norway Government Pension Fund Global, but that sovereign fund is invested in all major European listed equities. The Qatar royal family through vehicles remains a top shareholder and HNA Group peaked up, holdings its shares of the German bank in a complex structure.

Post global financial crisis, Deutsche Bank recruited a bank veteran who had worked at Temasek Holdings – John Cryan – to try and turn the ship around dubbing a program called “Strategy 2020”. Unlike Credit Suisse and UBS, which had resilient private banking franchises to fall back on, Deutsche Bank was overly anchored in trading and investment banking revenues. Cryan’s cost-cutting measures involved selling off business units, assets, solving outstanding legal headaches and layoffs. In 2016, Deutsche Bank was at an inflection point as its stock dropped precipitously and the CoCos (contingent convertible capital instruments) payment scare story flooded financial media, after announcing its first full year loss since 2008. Sovereign funds, especially ones in the Middle East, have an aversion to invest in large Western financial institutions. Many sovereign funds got burned in the global financial crisis – one can recall the Abu Dhabi Investment Authority losing big in Citigroup. Sovereign funds would rather be the contrarian capital, picking up the pieces in broken down entities or cherry picking distressed assets from banks.

Armed with a new CEO, Christian Sewing, the bank’s stock got hammered in May in the equity markets, nearing a market capitalization equivalent to Twitter. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Trump Goes Across the Political Aisle to Nominate Nellie Liang to Federal Reserve Board

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U.S. President Trump nominated Nellie Liang to the Federal Reserve Board of Governors. She is a long-time staff member of the Federal Reserve, joining in 1986 as a research economist. Liang must still be confirmed by the U.S. Senate pending the job post. She is a graduate of University of Notre Dame in 1979 and received her doctorate from the University of Maryland in 1986.

Ms. Liang is a registered Democrat.

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Ivanhoé Cambridge to Acquire Callahan Capital Properties

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Ivanhoé Cambridge, a unit of Caisse de dépôt et placement du Québec (CDPQ), signed a deal to acquire Callahan Capital Properties (CCP). Eastdil Secured advised on the transaction. CCP is Ivanhoé Cambridge’s investment partner of six years.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Manager of China’s Foreign Reserves Could be CalPERS Next CIO

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Numerous financial media outlets, including the Wall Street Journal (WSJ), are reporting that Ben Meng is in key position to become Chief Investment Officer of CalPERS. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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