Sovereign Wealth Fund Weekly News Roundup: SWFs Team Up on Big Deals

March 13, 2015 by Loch Adamson

SWF weekly news roundup: funds collaborate on big deals
SWF weekly news roundup: Norway's SWF publishes annual report
SWF weekly news roundup: Temasek and CIC eye emerging markets
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Sovereign wealth funds have been collaborating on some massive deals this week. On Tuesday we learned that a consortium of investors — reported to include the Abu Dhabi Investment Authority (ADIA) and Singapore’s GIC, as well as Dutch pension fund PGGM and London-based private equity firm TDR Capital — was preparing a $3 billion bid for Netherlands-based car-leasing company LeasePlan Corp.

ADIA has a history of teaming up with other sovereign wealth funds on innovative deals, and seems to be developing a particularly close relationship with GIC: the two funds are also rumored to be preparing a joint $7 billion bid alongside other investors for a Swedish electricity distribution business, one of several big European infrastructure deals that sovereign wealth funds are getting involved in.

The State General Reserve Fund of the Sultanate of Oman and the Brunei Investment Agency also announced a collaboration this week. The two funds are teaming up to create an aircraft leasing firm with capital of 200 million rials ($520 million). The new venture, named the Oman Brunei Aviation Leasing Co., will purchase and lease commercial aircraft operated by airlines in the Middle East and elsewhere.

Sovereign wealth funds’ increasing willingness to co-invest is frustrating other institutional investors, which are being crowded out. This week Britt Harris, the CIO of the Teachers Retirement System of Texas, said sovereign wealth funds’ co-investments with private equity firms are dominating the market, and forcing the pension fund to find new ways of structuring deals to outmaneuver the competition.

SWFs Eye Emerging and Frontier Markets

Singaporean state investor Temasek Holdings is continuing its recent strategy of investing in India and China. On Thursday Chinese media reported that Temasek had participated in an $850 million financing round for Shanghai-based consumer-reviews website Diangping.com. And in India, Temasek is reportedly set to partner with Paris-based asset manager Carmignac Gestion to pay $300 million for a 5 percent stake in Mumbai-based ICICI Prudential Life Insurance Co., a joint venture between ICICI Bank, India's largest private-sector lender, and U.K.-based multinational insurance company Prudential.

China Investment Corp. (CIC), meanwhile, is looking further afield, at frontier markets in sub-Saharan Africa. Mi Tao, a director of infrastructure investing at CIC, confirmed the fund intends to invest in ports in Kenya and Tanzania. See Sovereign Wealth Center’s Insider for further information on CIC’s investment plans.

Norway Publishes Annual Report

Norway's Government Pension Fund Global returned 7.6 percent on its investments in 2014, according to the latest annual report from Norges Bank Investment Management, the arm of the central bank that manages the giant fund.

NBIM reported a lower relative return compared to previous years, posting a 7.9 percent return in equities, 6.9 percent in fixed income and 10.4 percent in real estate. As of December 31, 2014, the fund’s overall assets stood at NOK 6.431 trillion ($860.8 billion), of which 61.3 percent was invested in equities, 36.5 percent in fixed income and 2.2 percent in real estate.

London Real Estate

London’s real estate boom continues apace. But ADIA may be reconsidering its huge £1.6 billion ($2.4 billion) bid for a trio of landmark London hotels after a deadline on the offer reportedly lapsed. The deal is being complicated by a battle for ownership between shareholders in Maybourne Hotel Group, which controls the properties.

The State Oil Fund of the Republic of Azerbaijan looks set to build its own portfolio of U.K. investments: CEO Shahmar Movsumov said this week that the fund would soon open an office in the British capital, but did not give a time frame.


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