Government Fund Weekly News Roundup — Coaches, Cruises and Co-Investments

October 23, 2015 by Loch Adamson

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China London

Politics and finance mingled in London and Paris this week, as state visits precipitated a raft of co-investment agreements between government institutions. Elsewhere, the Abu Dhabi Investment Authority and Canada’s Caisse de Dépôt sealed big real estate deals.

Xi’s Royal Welcome

There was much pomp and circumstance in London this week as the British government rolled out the red carpet (and a diamond-studded royal coach) to welcome Chinese President Xi Jinping. The U.K. and Chinese governments have signed business deals worth £25 billion ($38 billion) during Xi’s visit, including an agreement to develop nuclear power plants in England.

Also on the agenda? Luxury cruises. On Thursday Xi and British Prime Minister David Cameron attended the launch of a new partnership between the $747 billion China Investment Corp., American-British cruise operator Carnival Corp. and the China State Shipbuilding Corp. (CSSC). Together the partners will launch the first multi-ship luxury cruise franchise in China. 

The French government also received an eminent guest this week: Kuwaiti Prime Minister Jaber al-Mubarak al-Hamad al-Sabah. The state visit prompted a slew of trade and investment agreements. A case in point: The $592 billion Kuwait Investment Authority (KIA) and French pension fund Caisse des Dépôts et Consignations have entered discussions over a €1 billion ($1.1 billion) joint venture to invest in France. 

Canada’s Caisse de Dépôt Agrees New York Property Deal

Montreal-based Ivanhoé Cambridge, the real estate unit of $195 billion Canadian pension fund Caisse de Dépôt et Placement du Québec (CDPQ), has teamed up with private equity behemoth Blackstone Group to purchase Stuyvesant Town and Peter Cooper Village, a complex of 11,200 apartments in New York City, for approximately $5.3 billion from Washington D.C.-based real estate firm CWCapital Asset Management.

The development, built after World War II to house veterans, is one of the last bastions of affordable housing in Manhattan and supports 30,000 residents. Under the terms of the deal, the new owners will keep almost half of the apartments below market rates for 20 years in exchange for $225 million in tax breaks offered by the local government.

ADIA Eyes Hard Assets

The $621 billion Abu Dhabi Investment Authority is eyeing more direct investments in real estate and infrastructure.

A consortium comprising ADIA’s subsidiary Tawreed Investments, Melbourne-based toll-road operator Transurban Group and pension fund AustralianSuper is reportedly set to bid A$1.7 billion ($1.2 billion) for Brisbane-based toll-road operator BrisConnections, which operates a highway network that links Brisbane airport with the center of the city. The consortium purchased another Australian toll road operator, Queensland Motorways, for A$7.1 billion last year.

In Brazil, ADIA is teaming up with São Paulo-based property developer Iron House Real Estate to build the country’s Four Seasons-branded resort. ADIA and Iron House (a subsidiary of conglomerate Cornélio Brennand Group) expect the 254-room Four Seasons Hotel São Paulo at Nações Unidas to open in 2017. The development will also include 84 private residences. The Toronto-based hospitality company Four Seasons Hotels will manage the resort.

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