2013 Q1 Report - Funds

June 21, 2013 by Loch Adamson

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The most notable trend in the first quarter of 2013 was the fall in activity by now cash-constrained China Investment Corp. (CIC), which only made two investments, half of its total for the same quarter in 2012. The Sovereign Wealth Center expects that CIC’s direct investment will be limited until the fund sells a substantial asset or receives more capital from the State Administration of Foreign Exchange, the central bank department that manages China’s giant foreign exchange reserves.

The most active sovereign wealth funds in the first quarter of the year were the Qatar Investment Authority (QIA) and the Government of Singapore Investment Corp. (GIC), which invested $2.5 billion and $1.7 billion, respectively. QIA is internationally renowned for its extensive acquisitions of high-profile assets, and it didn’t disappoint. Besides purchasing luxury goods makers and hotels, it struck a strategic alliance with Italy. QIA cemented its relationship with the troubled European country by finalizing a joint venture with the state-owned investor the Fondo Strategico Italiano: IQ Made in Italy Venture, a fund designed to make acquisitions in food and food distribution, fashion and luxury, furniture and design, tourism, and lifestyle and leisure.

In the first quarter of 2013 QIA also pledged to spend €1 billion developing the Costa Smeralda estate on the Mediterranean island of Sardinia, which it purchased in May 2012 for €600 million ($802.4 billion), and announced it was buying the Four Seasons Hotel Firenze (Florence).

QIA’s recent deals are only one part of the gas-rich emirate’s activities in Italy; other Qatari investment vehicles have been buying Italian assets in recent months, including Rome-based couturier Valentino. 

Sovereign Wealth Funds Foreign Direct Investment Q1 2013

Source: Sovereign Wealth Center

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