At SWFs, 2015 Is Shaping Up to Be A High Turnover Year for Management

March 26, 2015 by Loch Adamson

Read @IISWC's roundup of #SWF executive changes in 2015
Management shake up at China Investment Corp.
New hires at AIMCo, Future Fund and Khazanah
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Leo de Bever's retirement prompted momentous changes at the Alberta Investment Management Corp.

It’s been a busy year for sovereign wealth fund executives. We’ve seen a shake-up at the top of the China Investment Corp. (CIC), the launch of an entirely new fund in Mexico , and new hires at Australia’s Future Fund and Khazanah Nasional , among others. And a momentous change of leadership at Alberta Investment Management Corp. Here’s a roundup of all the moves from the first quarter 2015.

CIC’s Management Shake Up

On February 25, the People's Bank of China (PBoC), the country's central bank, appointed Fan Yifei, CIC’s executive vice president, deputy chief operating officer and executive committee member, as its new vice chairman; he will now divide his time between the two institutions, an unusual arrangement whose implications China experts are still trying to decipher.

The $652.7 billion CIC has long had a high staff turnover — much to the frustration of many of its outside asset managers, who must deal with a constantly rotating roster of counterparts at the state-owned investor. Sovereign Wealth Center has already recorded several staff departures in 2015.

In January, Olivia Ouyang, CIC’s head of emerging markets private equity, joined Canada's $130 billion Ontario Teachers’ Pension Plan as director of funds and co-investments at its Hong Kong office. Liu Yangyang, CIC’s former head of oil and gas special investments, also moved from Beijing to Hong Kong, where he will head up an office for Washington, D.C.-based EIG Global Energy Partners, an investment firm focused on oil and gas and renewable energy financing.

The pair followed Zheng Kongdong out of the door. The former head of CIC’s Department of Public Equity reportedly resigned from CIC in late-2014. Zheng had led a team responsible for direct equity investments and allocations to external long-only managers. Larry Zhang has served as acting head of the department since Zheng's departure was announced internally.

Mexico’s New Fund

In Mexico, the government overcame sustained and at times chaotic political opposition to launch a new sovereign wealth fund, the Fondo Mexicano del Petróleo para la Estabilización y el Desarrollo (FMP), on January 1. Mexico City-based Julio Santaella, head of FMP’s executive committee, a department of the Banco de México, the nation’s central bank, is responsible for the fund’s day-to-day management.

Until the fund collects oil revenue equivalent to 4.7 percent of Mexico’s GDP, its role will resemble that of a fiscal agency. Specifically, it will handle payments to external contractors and the government’s main budget. Santaella is in charge of overseeing these fiscal responsibilities. The fund, with negligible assets for the moment, plans to appoint a dedicated investment team to handle asset management before it collects enough capital to begin investing. That probably won’t be until 2016.

New Aimco Leadership

From 2008 until his retirement earlier this year, Leo de Bever served as CEO and CIO of the Alberta Investment Management Corp. (AIMCo), which manages C$80 billion ($63.9 billion) for 27 pension and endowment funds based in the Canadian province, including sovereign wealth vehicle the Alberta Heritage Savings Trust Fund (AHSTF). He certainly went out on a high note: For the year ended March 31, 2014, AHSTF delivered an annual return of 16 percent. The trust’s five-year return through that date was an impressive 12.7 percent on an annualized basis.

Concurrent with de Bever’s departure, AIMCo shifted its management structure somewhat. Kevin Uebelein, the organization’s new CEO, joined from Smithfield, Rhode Island-based Pyramis Global Advisors, an asset management firm, where he was president and CEO. Pyramis is a subsidiary of Fidelity Investments, the Boston-based financial juggernaut. Dale MacMaster, the new CIO, was promoted from his previous position as head of AIMCo’s public market investment team. Both Uebelein and MacMaster assumed their new roles in January.

New Tanzania Office for Oman’s SGRF

Also in January, the State General Reserve Fund of the Sultanate of Oman (SGRF), the country's biggest sovereign wealth fund with $34.4 billion in assets under management, opened an office in Dar Es Salaam, Tanzania. SGRF says the office will enable it to capitalize on investment opportunities across sub-Saharan Africa, particularly in East African infrastructure. The new office will be headed up by Mohamed al-Tooqi, who was previously head of treasury at Muscat-based Petroleum Development Oman, an exploration and production company that is majority-owned by the sultanate.

Khazanah Hires M&A Specialist

On February 12, Malaysia's $41.6 billion Khazanah hired a new mergers and acquisitions specialist, Patrick Lau, as part of an effort to build up its in-house deal-making expertise. Lau joined from CCB International, the Hong Kong-based investment services arm of China Construction Bank Corp., where he was assistant head of investment banking. At Khazanah, Lau now leads a team that focuses on both foreign direct investment opportunities and domestic co-investments with overseas partners.

Future Fund Taps Infrastructure Head

On March 20, Australia's Future Fund , with $95.4 billion in assets under management, appointed Wendy Norris as head of infrastructure and timberland, where she will manage an A$8 billion ($6 billion) portfolio. The post has been vacant since September 2014, when previous incumbent Raphael Arndt was promoted to chief investment officer of the fund. Norris has been a director at the fund's Infrastructure and Timberland team since 2010, and previously worked at Hastings Fund Management, a specialist infrastructure investment firm, in New York.

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