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Would ADIC and Ontario Teachers Approve of a Neiman Marcus Takeover?

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North American luxury department stores are struggling for a variety of reasons including the hegemonic demise over high-end products thanks to e-commerce businesses and consumer spending habits.

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Neiman Marcus Group LLC, the luxury retailer store business, is up for sale, according to various media reports including The Wall Street Journal. Neiman Marcus is owned by private equity giant Ares Management LP and the Canada Pension Plan Investment Board (CPPIB). Did these institutional investors pile on too much debt? Can they salvage their massive investment in Neiman Marcus? In March, Neiman Marcus hired investment bank Lazard Ltd to help optimize the retailer’s balance sheet and possibly consider restructuring its debt profile.

Ares, through its private equity funds Ares Corporate Opportunities Funds III and Ares Corporate Opportunities Funds IV, and CPPIB acquired Neiman Marcus in a leveraged buyout (LBO) for a purchase price of roughly US$ 6 billion in 2013 from a group of investors led by TPG Capital and Warburg Pincus. The institutional buyers divided the ownership up equally with a portion going to company management at the luxury department chain. However, this LBO saddled Neiman Marcus with nearly double the debt.

Largest Shareholders of Hudson’s Bay Co

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China’s Central Bank Creates Macro-Prudential Management Bureau

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The People’s Bank of China (PBOC) created a new department to oversee and attempt to eliminate financial risks to the system. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Like its U.S. Peers, Legg Mason Seeks to Trim Costs

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Legg Mason Inc., a Baltimore-based asset manager, has announced a reduction in workforce as is prepares to streamline operations and save money. Legg Mason’s leadership commented that assets under management fell 5 % year-on-year. Legg Mason currently manages US$ 727.2 billion (as of December 31, 2018), which is down from the previous US$ 767.2 billion. CEO Joseph A. Sullivan noted that a global operating platform will centralize fund administration, IT, and other departments that work with affiliates. Sullivan did not discuss the number of layoffs expected, or specify which areas would be impacted. Legg Mason disclosed they planned to close a quarter of its exchange-traded funds in March 2019. These three ETFs include a U.S. strategy, emerging markets, and a developed markets strategy outside the U.S. However, these funds run around US$ 28 million in assets under management.

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Monetary Authority of Singapore Establishes Corporate Governance Advisory Committee

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On February 12, 2019, the Monetary Authority of Singapore (MAS) revealed the creation of a Corporate Governance Advisory Committee (CGAC). CGAC was formed to advocate for good corporate governance practices among listed companies in Singapore. Bobby Chin, Director of Singapore Telecommunications Limited, will be the Chair of CGAC. According to a MAS press release, “CGAC will identify current and potential risks to the quality of corporate governance in Singapore.”

MAS formed the Corporate Governance Council (Council) in February 2017. The Council was dissolved after it pushed out a publication of its final recommendations on August 6, 2018.

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