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Will the Oil Retreat Shift Sovereign Fund Allocation?

Russia, Abu Dhabi and Norway seem to think so.

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For the first time since April 2016, the price of oil dipped below US$ 40 per barrel – causing headache among some oil-based sovereign funds. Tumbling down from a June 2016 high of US$ 51.23 per barrel, oil prices then reversed course. The price of oil is an essential ingredient that impacts commodity-based economies, translating into pleasure or pain for a country’s citizens. For example, Russia’s Reserve Fund was marked down to US$ 38.18 billion at the end of July 2016, versus having US$ 38.22 billion in assets in the beginning. Oil industry analysts predict the crude price drops can be explained by an overall decrease in global trade, mixed in with the buildup of excessive storage of crude oil and gasoline. In addition, the Libyan and Iranian governments have made headway in becoming larger contributors to the world oil economy. Libya’s state—owned National Oil Corporation plans to work with the unity government to reboot exports from the ports of Ras Lanuf, Es Sider and Zueitina. Furthermore, Saudi Aramco lowered its oil prices to compete for Asian businesses against Russia and the United Arab Emirates. The state-owned oil giant said it plans to sell cargoes of Arab Light oil at US$ 1.10 per barrel in September – a price cut from US$ 1.30 per barrel for August.

Sovereign Wealth Funds

According to Episode 15 of “Follow the Money”, the hosts discuss the low or negative returns of wealth funds in latest fiscal year. The annual returns will no doubt have an impact on future allocation. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

CIC Sells 10% Logicor Stake to Blackstone Fund

The China Investment Corporation (CIC) is selling a 10% stake of in European warehouse firm Logicor Ltd to a real estate fund managed by The Blackstone Group. Furthermore, CIC also hired Blackstone to oversee and manage Logicor’s warehouses and logistic properties portfolio.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Fintech Affirm Raises $200 Million in Series E Led By Singapore’s GIC

Affirm Inc., a financial technology firm which provides instant loans to consumers as an alternative to credit cards for their online shopping, has raised US$ 200 million in a Series E round lead by Singapore’s GIC Private Limited, with participation from Khosla Ventures, Lightspeed Venture Partners, Spark Capital, Caffeinated Capital, and Ribbit Capital. The new infusion of capital brings the San Francisco-based company’s total funding to US$ 450 million and a reported valuation of US$ 2 billion.

The company is founded by Max Levchin, a co-founder of PayPal (part of the PayPal mafia, dubbed by the tech press). Max Levchin is also an advisory board member of the Consumer Financial Protection Bureau (CFSB) in the United States.

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CHANGE: Saudi Arabia to Re-Open Movie Theaters, PIF Inks MoU with AMC

The Saudi Arabian government is ending its 35-year ban on cinemas. Next year, the government will allow cinemas to open. This watershed moment provides opportunities for entertainment companies to invest in Saudi Arabia and the surrounding region.

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