Sovereign Wealth Fund Weekly News Roundup: SWFs Invest in Italy

March 20, 2015 by Loch Adamson

SWF Weekly News Roundup: CIC and KIC Eye Deals in Italy
SWF Weekly News Roundup: ADIA and GIC to Team Up on Center Parcs Bid
SWF Weekly News Roundup: Temasek to Make New Investments in Europe and India
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Far East sovereign wealth funds embarked on a trip to Italy this week. The China Investment Corp. (CIC) is reportedly in talks to become a limited partner in funds managed by Italy’s largest infrastructure investment firm, Milan-based F2i, whose founding members include state-owned lender Cassa Depositi e Prestiti. This would be the latest in a series of big European infrastructure deals involving sovereign wealth funds.

The Italian government has long been courting direct investment from China. In October 2014, CIC signed a €1 billion ($1.3 billion) co-investment agreement with Fondo Strategico Italiano (FSI), Italy's state development fund, following a state visit by Chinese Premier Li Keqiang.

FSI has previously signed co-investment agreements with the Kuwait Investment Authority and the Qatar Investment Authority — and now looks set to sign a similar deal with the Korea Investment Corp. (KIC). News emerged this week that KIC and FSI are negotiating a €1 billion ($1 billion) joint venture that will see them finance small- and medium-sized companies Italian companies in the industrial sector.

Center Parcs Bid

The Abu Dhabi Investment Authority (ADIA) and Singapore’s GIC are reportedly teaming up with a private equity firm to bid £2.5 billion ($3.7 billion) for Center Parcs, a chain of U.K. holiday resorts. The sovereign wealth funds are believed to be bidding for both the real estate and the eponymous operating company.

ADIA and GIC have developed a close relationship in recent months and are reportedly collaborating on two other deals: a $3 billion bid for Netherlands-based car-leasing company LeasePlan Corp. and a $7 billion offer for a Swedish electricity distribution business owned by Helsinki-based energy company Fortum Group.

NZ Super Continues to Grow

The New Zealand Superannuation Fund published its latest monthly performance figures this week. The fund returned 3.91 percent over February 2015, bringing its overall assets to $28.98 billion. NZ Super’s CIO Matt Whineray spoke exclusively to the Sovereign Wealth Center this week about the fund’s investment strategy for the months ahead.

Temasek Eyes Deals in Europe and India

Singapore’s Temasek Holdings is reportedly set to form a consortium with Beijing-based investment firm GSR Ventures and Chinese light-emitting diode (LED) producer Lattice Power to bid for Philips Lumileds, a €2.5 billion ($2.5 billion) lighting components business put up for sale by Amsterdam–based industrial giant Philips. The consortium put in a surprise last-minute bid for the company to rival private equity firms CVC Partners and KKR & Co. — which have submitted a joint offer — and Bain Capital.

Temasek is also continuing its strategy of investing in India. The firm is reportedly in talks to commit $80 million to Bangalore-based Capillary Technologies, a cloud-based software solutions provider. Temasek has been ramping up its investments in India since the first half of 2014 as its seeks to profit from the growth of the country’s affluent middle class.

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