Sovereign Wealth Fund Weekly News Roundup: SWFs Bullish on Asia

February 13, 2015 by Loch Adamson

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Asian Investments

The crash in global oil prices is affecting the world economy in a number of ways. One consequence has been a shift in the balance of power toward East Asian economies, which, as major oil importers, benefit from lower prices. As well as enabling governments to save money that they can spend elsewhere — on growth-boosting infrastructure projects, for instance — lower gasoline prices will mean higher corporate earnings and greater household spending power in many countries across the region.

Sovereign wealth funds certainly seem bullish on Asia at the moment. News emerged this week of China Investment Corp.’s $1.2 billion purchase of a Tokyo office and leisure complex alongside LaSalle Investment Management, a subsidiary of Chicago-based investment firm Jones Lang LaSalle. That was just the latest in a series of huge sovereign wealth fund investments in Japanese real estate.

China is also seeing interest from sovereign wealth funds, even as concerns persist over an economic slowdown and problems in the country’s shadow banking sector. On February 13, Chinese regulators awarded Singapore’s GIC a renminbi qualified foreign institutional investor licence, which will enable the fund to tap offshore pools of RMB-denominated capital to invest in mainland equities and bonds.

GIC also upped its stake in two Chinese companies this week: Chinese datacenter firm 21Vianet Group and Shanghai-based real estate group E-House Holdings.

Temasek’s U.S. Tech Bets

GIC’s peer Temasek, meanwhile, has been upping its stakes in the U.S. health care and technology sectors — and making big money in the process. Temasek picked up 8 million more shares in the $150 billion biotechnology giant Gilead Sciences in the fourth quarter 2014, according to its latest filing with the U.S. Securities and Exchange Commission. The Singaporean investor first bought stock in the Foster City, California-based company in the last quarter of 2013, when the company had a market capitalization of approximately $75 billion; as of end-December 2014, Temasek’s stake in the firm was valued a whopping $1.9 billion.

Temasek’s next bet: New Jersey-based e-commerce start-up, a putative rival to Internet giant The Singaporean investor participated in a $140 million financing round for the company, which is set to launch its membership-based online retail platform next month.

Canary Wharf Takeover

Elsewhere, the Qatar Investment Authority and Canadian real estate investor Brookfield Property Partners’ drawn-out takeover of Canary Wharf moved closer to completion. On February 10, CIC became the first major investor in Songbird Estates, the London-based firm that owns the financial district, to sell its shares after accepting the takeover offer from QIA and Brookfield. On February 13, several Brookfield directors assumed places on Songbird’s board as eight former directors stepped down.

Other Developments

In other sovereign wealth fund news, Norges Bank Investment Management, the arm of the central bank that manages Norway’s giant fund, bought more prime U.S. real estate this week, acquiring a 45 percent stake in the 11 Times Square office tower in New York for $409.1 million. A small step toward its goal of investing 1 percent of its $860 billion of assets in real estate this year.

As Sovereign Wealth Center forecast on Insider, the Korea Investment Corp. (KIC) has continued its drive to double its exposure to so-called alternative assets such as hedge funds, infrastructure, private equity and real estate, by investing in a new global infrastructure fund managed by Brisbane, Australia based QIC (formerly the Queensland Investment Corp.). .

Finally, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) published its latest performance figures, which revealed that the fund grew 3.4 percent over the 12 months to January 1, 2015, bringing its overall assets to $37.1 billion.

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