- Government Fund Weekly News Roundup — SWFs Maintain a Broad Appetite for Investment
Government Fund Weekly News Roundup — SWFs Maintain a Broad Appetite for Investment
Variety is the spice of life and sovereign wealth funds
have been investing in a wide range of assets this week.
Australian roads and buildings have attracted considerable
interest from government funds, Indian banks and shopping malls
have also drawn scrutiny, and new technology and medical
companies remain hot properties. Meanwhile, Turkey made
progress in formalizing its own SWF and major changes are on
the way for Saudi Arabia’s Public Investment
Funds have been looking at property in the
Australian city of Melbourne.
Korea and Canada buy into Australia; Abu Dhabi exits
A number of SWFs were looking at assets in Australia this week.
Korea Investment Corp. (KIC) was reportedly part of a
consortium that bought a 50 percent stake in the city of
Melbourne’s Southgate Complex for A$289 million
($221 million). The consortium has also acquired an option to
buy the other half of the complex for the same price, according
to media reports.
Canada’s government pension fund Caisse de
dépôt et placement du Québec (CDPQ) has
bought a 20 percent share in Plenary Group Holdings, which
controls all the Australian operations and assets of
Melbourne-based public infrastructure developer Plenary Group.
CDPQ has been a long-term partner of Plenary, having invested
more than A$200 million ($152 million) in Plenary-originated
projects in Australia since 2012, including police, court and
defense force facilities.
The Abu Dhabi Investment Authority (ADIA), meanwhile, took to
the roads, selling its stake in toll-road operator Transurban.
The shareholding was thought to be worth around A$254 million
($196 million), or around one percent of the company.
Indian shopping malls and infrastructure stand tall
Two sovereign wealth funds are reportedly in talks to buy
stakes in an Indian infrastructure company, while another has
been taking a look at the country’s shopping
malls. The government pension manager Canada Pension Plan
Investment Board (CPPIB) and Singaporean investor Temasek
Holdings are mulling stakes in Mumbai-based developer
Infrastructure Leasing & Financial Service (IL&FS). Two
local banks are selling their stakes, worth around $224
million, but the sovereign funds are thought to be facing
competition from other investors interested in the deal. The
Abu Dhabi Investment Authority (ADIA) already owns 12.56
percent of IL&FS and could be looking to increase its
Singapore’s Government Investment Corporation
(GIC) is considering adding to its investments in
India’s retail property sector. GIC has reportedly
held talks with Mumbai-based developer Oberoi Realty regarding
a possible joint venture. Oberoi has an existing mall in the
city and is seeking a partner for two more. A deal would fit
with GIC’s previous investment of around $52
million for a 50 percent stake in another existing Mumbai
Finally, Temasek is also said to be one of the parties in talks
with Hero FinCorp, the financial services arm of Delhi-based
motorcycle manufacturer Hero MotoCorp, regarding a $100 million
fundraising exercise being carried out by the Indian
New technology and medical treatments offer potential
New technology firms and medical treatments offer potential for
spectacular growth if their products are able to find a
receptive audience. SWFs have continued to balance their
investments in steadier, more established industry sectors with
moves towards the cutting edge of technology. This week,
Australia’s Future Fund led a $50 million
equity-financing drive for San Jose, California-based data
processing company MapR Technologies. MapR helps companies
including American Express, Audi and Ericsson to manage and
analyze their information.
Canada’s CPPIB has paid $100 million for a
proportion of royalty interests from a new cancer-treatment
therapy being developed by the Boston-based medical research
organization Dana-Farber Cancer Institute. CPPIB has also
agreed to make up to $68 million of additional funding
available if certain conditions are met. Meanwhile,
Norway’s Norges Bank Investment Management, the
arm of the central bank that oversees the
country’s $860 billion sovereign wealth fund,
has boosted its shareholding in Colombo, Sri Lanka-based
telecommunications firm Dialog Axiata, adding around another
$5 million of stock in the company to its portfolio.
Saudia Arabia’s PIF one step closer to
The secretary general of Saudi Arabia's Public Investment
Fund (PIF), Yasir Al-Rumayyan, has been named to the board of
Saudi Aramco, one of the world's largest oil producers. The
appointment of Al-Rumayyan to the board of Aramco is seen as
a step on the way to PIF becoming majority owner of Aramco
— and raising PIF's global profile as a sovereign
wealth fund. The Saudi government says it will sell less than
5 percent of Aramco shares to the public by the end of 2018,
with the rest of Aramco's ownership moving to PIF.
Meanwhile, Turkish Minister of Finance, Naci Agbal, revealed
that a draft law to set up a sovereign wealth fund was being
sent to the national parliament’s planning and
budget commission. The fund is seen as a potential driver of
domestic "mega-projects" in the future.