Sovereign Wealth Fund Weekly News Roundup — Indian Investments

September 04, 2015 by Loch Adamson

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Singapore’s sovereign wealth funds continued to invest in India this week. Temasek agreed a massive private equity deal in South Korea. The Future Fund published its annual results.

A Passage to India

Singapore’s GIC and Temasek Holdings have made several big investments in India over the past two years. Attracted by the country’s strong economic fundamentals, they’re allocating capital to Indian companies across a range of industry sectors, including financial services, pharmaceuticals, retail and real estate.

This week GIC, which has $343 billion in assets under management, formed a joint venture with DLF Home Developers, a subsidiary of New Delhi-based construction company DLF, to invest in two residential development projects in the center of the Indian capital. GIC will contribute 19.9 billion rupees ($300 million) to the venture.

According to local media reports, GIC is also vying with the Canada Pension Plan Investment Board to buy a $400 million stake in Pune-based automotive and aerospace technology firm Tata Technologies from the firm’s major shareholder, Mumbai-based car-maker Tata Motors.

Temasek, too, is eyeing an investment in Indian private equity. The $194 billion state investor is ready to participate in a financing round for Gurgaon-based technology company Zomato Media, which runs a smartphone app that allows users to book tables at restaurants, order takeaway deliveries and share reviews.

Temasek likes companies that stand to benefit from the burgeoning spending power of India’s emerging middle class — it recently invested in Mumbai-based consumer goods company Bajaj Corp., for example.

Asian Private Equity

Temasek also agreed to strike deals in East Asia this week, seemingly unperturbed by potential spillover effects from China’s stock-market slump.

The Singaporean firm is part of an investor group that has submitted a bid for Homeplus, the Korean unit of British supermarket giant Tesco. The consortium, which also includes Seoul-based private equity firm MBK Partners and South Korea’s National Pension Service, is thought to be the preferred bidder for Homeplus and plans to pay 7.8 trillion won ($6.8 billion). According to local press reports, MBK, NPS and Temasek have beaten competition from two other investor groups (including a bid from a consortium backed by GIC).

In China, Temasek’s subsidiary Pavilion Capital has reportedly participated in a financing round for Shanghai-based biotechnology firm Ascletis, which develops treatments for cancer and infectious diseases. Temasek invested alongside two Chinese companies: healthcare-focused private equity firm C-Bridge Capital and Tasly Pharmaceuticals, a unit of Tianjin-based conglomerate Tasly Holding Group.

Future Fund Grows to $92 Billion

Australia’s Future Fund published its annual results this week. The fund achieved a net return of 15.4 percent during fiscal year 2015, growing to A$117.2 billion ($90.25 billion) as of June 30. The fund posted its impressive performance despite lowering the risk level in its portfolio and increasing its cash holdings from 11.2 percent to 19.5 percent during the fiscal year.

The fund also reduced its exposure to global equities from 32.8 percent of the portfolio to 27 percent, a move that reflects its concerns over increasing volatility in international stock markets. 

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