SWF Weekly News Roundup — GIC Seals Massive Private Equity Deal

August 14, 2015 by Loch Adamson

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Singapore’s GIC and Temasek invested in the U.S. technology sector this week. In other news, sovereign funds continue to grapple with the drop in oil prices and ADIC reshuffles its private equity team.

Singapore’s U.S. Private Equity Deals

Singapore’s $342 billion GIC agreed to another huge private equity deal this week. The sovereign wealth fund teamed up with Washington D.C.-based private equity giant Carlyle Group and other unnamed co-investors to buy Mountain View, California-based Veritas, the data storage subsidiary of U.S. technology company Symantec Corp., for $8 billion. In a statement, Symantec said its board of directors had approved the sale and that it expected the deal to close by January 1, 2016.

GIC has a longstanding relationship with Carlyle: The SWF is an investor in Carlyle funds and regularly collaborates with the firm on private equity transactions. In late 2014, for example, the partners became co-investors in U.K.-based roadside assistance firm RAC after GIC bought 50 percent of the company from Carlyle in an £800 million ($1.3 billion) deal. And both GIC and Carlyle have bought minority stakes in Brazilian health care chain Rede D’Or Sao Luiz this year.

GIC’s peer, Singapore’s $194 billion Temasek Holdings, also invested in U.S. technology this week — although Temasek’s deal was considerably smaller. According to media reports, Temasek led a $40 million fundraising round for Kansas City, Missouri-based accounts receivable online marketplace C2FO. The startup company runs and manages an online platform that enables customers to obtain discounts by paying their vendors’ invoices promptly.

Oil Funds Grapple with Low Prices

Sovereign wealth funds across the globe are coming under pressure to support government budgets as oil revenues decline. Norway is a case in point. Norges Bank Investment Management, the arm of the central bank that oversees the country’s $870 billion Government Pension Fund Global, has forecast that outflows to support budgetary spending may outstrip the fund's dedicated inflows in the coming fiscal year. Nor is the pressure to spend likely to decline: Falling oil prices have already pushed Norway's jobless rate to 4.3 percent in May 2015, the highest in 11 years.

Kuwait’s economy, too, has been badly hit by the drop in oil prices. The Middle Eastern country ran a budget deficit for the 2014-'15 fiscal year — its first in over a decade. But Finance Minister Anas Khalid al-Saleh said on Monday that the government would not withdraw capital from the country's $600 billion sovereign wealth funds, the Future Generations Fund and the General Reserve Fund. In a statement, al-Saleh reaffirmed Kuwait's commitment to building savings for future generations.

Busy Week at ADIC

The $110 billion Abu Dhabi Investment Council (ADIC) reportedly cancelled its plans to sell a $1 billion private equity portfolio this week. ADIC had hired New York-based investment adviser Evercore Partners to find bidders for the portfolio of secondary investments, but the firm struggled to source interested parties.

ADIC has also reshuffled its private equity staff. Nazem al-Kudsi, the CEO of ADIC’s private equity-focused subsidiary Invest AD, has left his post after a seven-year stint at the company. Al-Kudsi has joined Abu Dhabi-based venture capital firm Emirates International Investment Co., a unit of National Holding, one of the emirate's biggest business conglomerates. Khalifa Sultan al-Suwaidi, ADIC's director of direct investments, will serve as interim CEO at Invest AD while the company looks for a replacement.

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