June 13, 2024
Investments

Weekly Digest: AustralianSuper to double lithium investments; Norway SWF drops two Asian firms from portfolio | Asset Owners


TOP NEWS OF THE WEEK

AustralianSuper will more than double its investments in lithium over the coming three years, as the superannuation fund seeks to benefit from energy transition and new trading patterns routes forged by the US and China.

AustralianSuper also plans to deploy more capital in critical minerals over the coming five years through investments in Australia, Africa, and North and South America, senior portfolio manager Luke Smith said.

Source: Australian Financial Review

Norges Bank Investment Management on May 15 announced that it decided to exclude three firms from its portfolio, including India’s Adani Ports and Special Economic Zone Ltd and China’s Weichai Power Co Ltd, citing “unacceptable risk”.

The world’s largest sovereign wealth fund said the Adani Ports and Special Economic Zone contributes to serious violations of individuals’ rights in situations of war or conflict.

It said the Weichai Power contributes to sales of weapons to states in armed conflicts, where the weapons are used in ways that constitute breaches of the international rules on the conduct of hostilities.

U.S. defense contractor L3Harris was also excluded due to its development and production of components to nuclear weapons.

Source: Norges Bank Investment Management

OTHER INVESTMENT NEWS

CHINA

Millions of dollars from US pension funds – including those of New York’s police officers and firefighters – are likely invested in ByteDance, the Chinese-controlled parent company of TikTok that is under a standing order from Congress to sell off the popular social media platform or face its banning.

The non-profit investment watchdog group Future Union has identified 48 pension funds that have entrusted their money with venture capital and private equity firms known to have invested in ByteDance since 2012.

Six of the largest are directly tied to New York, including the state’s common retirement fund and teacher’s retirement system, as well as New York City’s employees’ retirement system, police pension fund and teachers’ retirement system.

Source: New York Post

JAPAN

Japan Post Insurance and Daiwa Securities Group have announced a capital and business tie-up in asset management.

The alliance comes amid moves by the government to encourage a shift from savings to investment.

The firms said that Japan Post Insurance will acquire a 20% stake in Daiwa’s asset management unit for ¥52.5 billion ($340 million).

Japan Post Insurance will take up new shares issued in Daiwa Asset Management.

Japan Post Insurance will entrust Daiwa with managing part of its assets, and the two firms will also collaborate on a full-scale entry into the investment advisory business.

The companies say the alliance will diversify Japan Post’s revenue sources and expand the scale of Daiwa’s asset management operation.

Source: Japan Post Insurance

Nippon Life has started buying foreign floating-rate, corporate debt-backed securities—known as collateralized loan obligations—and intends to invest more in overseas corporate bonds this fiscal year. It bought billions of dollars of foreign corporate bonds the previous fiscal year.

“Diversification of investment is critical even though the attractiveness of yen rates may well increase in the mid-to-long term,” said Ikumi Hiramatsu, who manages asset allocation at the company.

The insurer has the equivalent of $13 billion to $19 billion of funds to invest in the fiscal year that started in April, he said.

Source: Wall Street Journal

Nippon Life reached an agreement with Corebridge Financial and its parent company American International Group (AIG) to acquire a 20% equity interest in Corebridge.

With an AUM of $390 billion as of March 31, Corebridge is one of the largest providers of retirement solutions and insurance products in the US.

Under the terms of the transaction, AIG has agreed to maintain a 9.9% ownership stake in Corebridge for two years after the closing.

Nippon Life is also establishing a strategic partnership with the two companies through the acquisition to enhance the value of Corebridge. The purchase will be paid for in cash. This sale is expected to close by the first quarter of 2025, subject to required regulatory approvals.

Source: Nippon Life

Nippon Life alo continues to be on the hunt for stakes in other insurers and asset managers in the US and Asia.

“We need to pursue further growth overseas,” managing executive officer Minoru Kimura said at a media briefing on May 17. “There are still many opportunities.”

Kimura said the company won’t rule out buying majority stakes in companies in future deals. Nippon Life will look for targets in Europe as well, though he said there are fewer opportunities there than in the US.

Source: Bloomberg

KOREA

Corporate retirement pension funds grew nearly 14% from a year earlier in 2023.

The total amount of corporate retirement pension funds under management came to W382.4 trillion ($282.6 billion) as of end-2023, up W46.5 trillion, or 13.8%, from a year before, according to the data from the Financial Supervisory Service.

The funds recorded an average return of 5.26% on their investments last year, up from 0.02% in 2022.

Source: Yonhap News Agency

MALAYSIA

A consortium led by sovereign wealth fund Khazanah Nasional Berhad and the Employees Provident Fund (EPF) has made a pre-conditional voluntary offer to acquire all the shares in Malaysia Airports Holdings Berhad (MAHB) not already owned by the consortium.

The consortium’s shareholders also comprise a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and funds managed by Global Infrastructure Partners (GIP).

The consortium and its parent companies in aggregate owned 41.1% of MAHB’s issued share capital at of May 14.

Upon full completion of the offer, Khazanah will increase its ownership in MAHB from 33.2% to 40% and EPF from 7.9% to 30%, while ADIA and GIP will hold the remaining 30%.

Source: EPF

THE PHILIPPINES

The Philippines’ Government Service Insurance System (GSIS) is open to acquiring the government’s stake in the longest toll road in the Southeast Asian country, according to Jose Arnulfo Veloso, head of the pension fund for civil servants.

Finance Secretary Ralph Recto recently floated the idea of the GSIS and its private sector counterpart Social Security System (SSS) buying the government’s 50% share in the 93.8-kilometre Subic-Clark-Tarlac Expressway to counter an offer from the private operator of the toll road.

 The government holds the stake through the Bases Conversion and Development Authority (BCDA).

Source: Asia Asset Management

SINGAPORE

Vertex Holdings, the venture capital arm of Temasek, is expanding its startup investment in Japan through a new dedicated fund.

Vertex CEO Chua Kee Lock said the latest fund plans to raise ¥10 billion ($65 million) over the next year or so.

The holding company will fund about a third of the target as the anchor investor, while the rest will be mainly raised from Japanese institutional investors and large corporations.

“Japan is very much focusing on growing its startup ecosystem, attracting global investors and reinvigorating its semiconductor industry,” Chua said. “We see strong potential.”

Source: Nikkei Asia

TAIWAN

Taiwan’s Private School Fund has extended the term of CTBC Bank Co as its custody and trustee service provider for two more years.

The local bank has been providing trustee, custodian and investment administration services to the fund since 2010. This is the seventh time its contract is extended.

According to the Private School Fund, the bank will continue to be responsible for investment selection, settlement, risk assessment and redemption, and provide members with more comprehensive trustee services.

Source: Asia Asset Management

The above briefs have been curated from third-party sources and news releases.

¬ Haymarket Media Limited. All rights reserved.





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