- Sovereign Wealth Fund Weekly News Roundup — SWFs Target Infrastructure Investments
Sovereign Wealth Fund Weekly News Roundup — SWFs Target Infrastructure Investments
Middle Eastern sovereign wealth funds continued to buy
European infrastructure assets this week, while
Singapore’s GIC and Temasek closed big buyout
deals in China and Australia.
Planes, Trains and SWFs
Sovereign wealth funds’ appetite for European
transport infrastructure continues — despite high
valuations and fierce competition.
The $621 billion Abu Dhabi Investment Authority (ADIA),
which was part of a consortium that bought German motorway
service station operator Autobahn Tank & Rast for a
reported €3.5 billion ($3.8 billion) earlier this month,
turned its attention to British trains this week. ADIA teamed
up with Sydney-based investment manager AMP Capital, Danish
pension fund PensionDanmark and Zurich-based Swiss Life Asset
Managers to buy a 43.4 percent stake in British train-leasing
company Angel Trains.
The $592 billion Kuwait Investment Authority (KIA) is also
eyeing British transport assets. Wren House Infrastructure
Management, KIA’s infrastructure unit, is
reportedly part of a consortium that is preparing a £2
billion ($3 billion) offer for London City Airport, which
business travellers use to access the British capital's
financial districts. According to sources in the U.K. press,
KIA is teaming up with Ontario Teachers’ Pension
Plan and Hermes Infrastructure Management, the infrastructure
unit of London-based fund manager Hermes, in a bid for the
airport asset. The sellers are New York-based private equity
firm Global Infrastructure Partners and Los Angeles-based
distressed-debt specialist OakTree Capital Management.
KIA is following another infrastructure asset with interest as
it reportedly placed a bid to buy a 15 percent stake in Rome
airport operator Aeroporti di Roma (ADR) this week —
but it will need to see off rival bids from other sovereign
funds. China’s $600 billion State Administration of Foreign Exchange
(SAFE) and Toronto-based Borealis, the infrastructure division
of the Ontario Municipal Employees Retirement System, are
believed to be the frontrunners to buy the asset from
Milan-based infrastructure investment firm Atlantia.
GIC’s Deal Down Under
It’s not just European infrastructure that is
attracting sovereign wealth funds’ attention.
Singapore’s $342 billion GIC was part of a buyout group that
acquired Australian infrastructure and logistics firm Asciano
for A$8.9 billion ($6.6 billion) this week.
Brookfield Infrastructure, a unit of Toronto-based investor
Brookfield Asset Management, led the consortium and will now
own approximately 76 percent of Asciano. GIC and the British
Columbia Investment Management Corp., which manages around $94
billion in assets for public sector clients in the Canadian
province, will each own 11 percent of the company after the
completion of the deal, which is still subject to regulatory
A Busy Week for Temasek
GIC’s peer Temasek Holdings agreed its own big buyout
deal this week. Singapore’s $194 billion state
investor was part of a consortium of Chinese insurance and
private equity firms that acquired Shanghai-based, New
York-listed pharmaceutical technology firm Wuxi PharmaTech for
$3.3 billion. The partners paid $46 per depositary share in the
company, which will cease trading on the New York Stock
Exchange after the deal is completed.
Temasek also allocated yet more capital to India, increasing
its stake in Delhi-based Jasper Infotech, which runs the online
marketplace Snapdeal.com. Temasek participated in the
firm’s latest fundraising round alongside Chinese
Internet giant Alibaba Group and Taiwanese electronics
conglomerate Foxconn Technology Group. The round raised $500
million, valuing Snapdeal at around $4.7 billion.
But Temasek is continuing to target developed markets, too. A
joint venture between Temasek and Oxford Properties, the real
estate investment arm of the Ontario Municipal Employees
Retirement System, is reportedly close to buying the Blue Fin
building in London's South Bank district, which houses the U.K.
headquarters of U.S. magazine publisher Time Inc., for