Friday, March 8, 2013

Sovereign Wealth Funds/SWF

Government backed investment vehicles, total worth more than $5,2 Trillion; continue to expand thanks to high oil and gas prices, helping Asian SWF successful economic growth and export efforts. SWF are expected to grow by 5% to 7% annually. 

1.)The world's largest SWF is the 'Government Pension Fund Global' of Norway/GPF, worth around $890 Billion, investing in different countries and currencies, choosing for its portfolio 40% to 60% in stocks, 35% in bonds and 5% in real estate. The Fund reduced its European exposure in stocks and bonds, rebalancing its holdings, from 54% to 41%, increasing its acquisition in real estate, purchasing a $684 Million stake in New York skyscraper Time Square Tower. The fund receives billions of dollars in annual revenues from Norway's oil and gas development and is managed by Norges Bank, the central bank of Norway.
2.)ADIA/Abu Dhabi Investment Authority, manages estimated assets of around $627 Billion, investment portfolio: developed equities/35%-45%, emerging market equities/10%-20%, Government bonds/10%-20%, real estate/5%-10%, and by region: North America/35%-50%, Europe/25%-35%, emerging markets/15%-25% and developed Asia/10%-20%. HH Sheikh Khalifa Bin Zayed al-Nahyan is the hereditary ruler of oil-rich Emirate Abu Dhabi and President of the United Arab Emirates/UAE and his half brother, Sheikh Hamid Bin Zayed al-Nahyan is the managing director of the fund. ADIA is a subsidiary of the wholly Government owned Abu Dhabi Investment Council/ADIC, controlling also the International Petroleum Investment Company/IPIC worth about $65,3 Billion, INVEST AD, the Abu Dhabi Investment Company, investing in the Middle East and Africa and owner of 73% of the National Bank of Abu Dhabi, Mubadala Development Co., managing assets of about $48,2 Billion and the Abu Dhabi National Energy Company/TAQA. Members of the royal family are involved in most of Abu Dhabi's important economic activities, like the Abu Dhabi United Group for Development and Investment/ ADUG, owned by Sheikh Mansour Bin Zayed al-Nahyan, the Royal Group, a conglomerate of 30 companies, chaired by Sheikh Tahnoon Bin Zayed al-Nahyan, the Abu Dhabi Mar Group/ADMG, Abu Dhabi Ship Building/ADSB and Aabar Investment PJSC. Abu Dhabi holds stakes in: Citicorp/4%, EFG Hermes/8%, UniCredit Group/6,5%, Hyatt Hotels Corp/11%, Carlyle Group/7,5%, Ferrari/5%, Advanced Micro Devices/AMD/8,1%, Partnerships with MGM Mirage to develop MGM Grand Abu Dhabi Resort, Partnership with General Electric to establish a global commercial financial services company aimed at Middle East and African markets, planning to become one of the 10 biggest institutional investors in GE, Partnership with French Strategic Investment Fund/FSI to target co-investments into French companies, Kor Hotel Group/50%,  Manchester City Football Club/100%, bought Chrysler Building, New York, for $800 Million, MAN-Ferrostaal/70% (seeking to recoke a deal to buy the remaining 30% or intending to reduce acquisition price due to corruption scandal at MAN -Ferrostaal) - Ferrostaal acquisition related with industrialization efforts of Abu Dhabi, OMV - Austrian oil and gas group and Nabucco leader, AIG Private Bank, Switzerland/ 100%, Nobiskrug Shipyard/90%, Partnership agreement with Thyssen-Krupp Marine Systems/TKMS acquiring Blohm + Voss Shipyards, including Howaldtswerke-Deutsche-Werft/HDW Gaarden and 80% of Blohm + Voss Repair and Blohm + Voss Industries, taking also a 50% stake of the new company Blohm + Voss Naval, as a step to position the Abu Dhabi Mar Group as world leader in naval and megayacht building, Hellenic Shipyards with submarine construction capacity/75,1%. Abu Dhabi is expected to spend more than $353,9 Billion in a large number of strategic projects over a period of 8 years running from 2008 to 2016, whith nearly half of that covering the construction sector.
The Khalifa Fund for Enterprise Development, an independent body of the Abu Dhabi Government, is committed to stimulate the country's competitive economy and transform the Emirate of Abu Dhabi into a major investment and economic hub in the region. The Fund has a total capital investment of about $544 Million and financed until mid-July, 2013, 541 projects worth some $233 Million.
3.)SAFE - China's State Administration of Foreign Exchange, operating under the People's Bank of China (Central Bank), manages for China's Central Bank the country's foreign exchange reserves of above $3,2 Trillion, direct investment portfolio of SAFE worth about $567,90 Billion, has set up one of the world largest U.S.equity portfolios, plans to allocate about 5% of China's foreign exchange reserves to alternative asset classes such as private equity, while investment in Government bonds, cash and other liquid assets
remains the main trend, bought GM's position in blue chip private equity funds managed by Carlyle Group, Blackstone and CVC Capital Partners, purchased stakes in oil majors about 1,3% Total,1% BP and 0,9% Shell, owns a stake of 0,9% in Aviva Asset Management. SAFE's subsidiary, SAFE Investment Company, based in Hong Kong, has significant investments in the UK equity market and bought smaller stakes of three of Australia's largest banks. China's three largest SWF, SAFE, China Investment Corpration/CIC, new investment arm of China's Central Bank - $575,18 Billion - and the National Social Security Fund/NSSF - $135 Billion/$146,5 Billion have more than $1,25 Trillion in assets, reaching total assets of all China SWF estimated $1,483 Trillion. CIC is investing 1/3 into the Central Huijin Investment Company with shares in State owned banks, 1/3 recapitalising the Agricultural Bank of China and the China Development Bank and 1/3 for overseas purchases, injecting $3 Billion for a 9,9% stake into the private U.S.equity giant Blackstone Group through its subsidiary Beijing Wonderful Investment Ltd. and plans to increase its stake to 12,5% buying shares in the open market, investing about $500 Million into a Blackstone hedge fund unit, partnering Blackstone Group with Shanghai Pudong New Area, a Government agency, to set up a local currency private equity fund valued up to yuan 5 Billion/$732 Million, pushing China to develop a domestic private equity industry, CIC took a 9,9% stake in Morgan Stanley investing $5 Billion and invested about $4 Billion into the U.S. private equity JC Flowers Fund, $200 Million in VISA's IPO and made a substantial investment into private equity firm Apax Partners, taking as well a stake in Songbird Estates, owner of Canary Wharf, buying 30% of French energy group GDF Suez International Power for about $3 Billion and through a subsidiary 10% of London airport Heathrow for about $704 Million, holds stakes in Australia and New Zealand Bank and the Commonwealth Bank. Like other SWF CIC suffered heavy losses on its investments in the U.S. financial sector, and plans to invest now larger sums overseas directly as a partner alongside private equity funds, increasing its minority stakes in key sectors as infrastructure, its investments into Asia's emerging nations and into worldwide commodity markets. NSSF holds an unspecified stake in China Development Bank, expanding like CIC its foreign investments.
4.)SAMA - Saudi Arabian Monetary Agency, is the Central Bank of the Kingdom and is also the Kingdom's investment authority with total net foreign assets of about $600 Billion and there are no sovereign wealth funds. SAMA manages most foreign assets, more than 90%, of the Central Government, including of the two Pension Funds and the five public specialized, not deposit-taking, credit institutions/SCI's, totaling foreign reserves of Saudi Arabia at the end of 2012 $648 Billion, allowing high oil prices to effectively wipe out Government debt. Record State revenue reached more than $331 Billion in 2012, leading to a huge budget surplus of $103 Billion, targeting budget plan for 2013 revenues of $221 Billion and spending of $219 Billion. Saudi Arabia has huge infrastructure investment plans valued actually between $451 Billion and $750 Billion to boost the non-oil economy and position the Kingdom among the top 10 most competitive nations. One of the most relevant investments is Kingdom City, a 5.202.570 m2 project approved for construction located along the Red Sea near Jeddah, designed by Kingdom Holding Company, the largest company of Saudi Arabia, owned by Prince Al-Waleed Bin Talal, topping with $22,9 Billion the list of Saudi Billionaires, ranking 20th in the world, the wealthiest Arab in the Middle East and nephew of King Abdullah, important shareholder of international companies and owner of prestigious real estate. The centerpiece and first phase of the $20 Billion proposed development of Kingdom City will be the Kingdom Tower, a supertall skyscraper designed by architect Adrian Smith with a height over 1.000 metres at a preliminary cost of $1,23 Billion, higher than the 828-metre Burj Khalifa in Dubai, becoming the tallest building in the world.   
5.)KIA - Kuwait Investment Authority - Kuwait's Government investment arm, managing assets of about $296 Billion. KIA is an autonomous Government body responsable for the management and administration of the General Reserve Fund/GRF consisting of investments in Kuwait and other MENA countries as well as hard currencies held on behalf of the Government, and the assets of the Future Generations Fund/FGF, a Fund investing outside of Kuwait and the MENA region. Investments: 23% Victoria-Jungfrau Collection AG, 16% Gulf Bank, 12%Arab Insurance Group, 9% Jordan Phosphate Mines, 6,93% Daimler AG, 1,75% BP, 24,6% ZAIN-Mobile Telecommunications Co./MTC, 24% KFH-Kuwait Finance House, the largest bank in Kuwait. KIA and Qatar Investment Authority/QIA took part in a $3,95 Billion deal to buy four buildings in New York, including the $2,8 Billion sale of the GM building. KIA joint the Government of Singapore Investment Corporation/GIC and CIC investing into BlackRock financing part of its transaction to buy Barclays Global Investors/BGI. Kuwait transfers 10% of the oil revenue into the FGF each year. KIA plays a pivotal role in the local economy, managing the State's contributions and shares in various major economic entities. Kuwait has infrastructure and construction projects worth more than $196 Billion.
6.)HKMA - Hong Kong Monetary Authority, the Central Bank of Hong Kong - a special administrative region of China. HKMA manages two distinct portfolios: The banking portfolio, which has to ensure that the monetary base is fully backed by highly liquid U.S.-Dollar denominated securities, and the Exchange Fund, where the Hong Kong Government places its fiscal reserves, which has to preserve its value for future generations in Hong Kong. The investment portfolio of HMKA reaches actually about $319,6 Billion.The Fund may also be used to maintain the stability and integrity of Hong Kong's monetary and financial system to help maintain Hong Kong as an international financial centre. A third strategic portfolio holds shares in Hong Kong Exchanges and Clearing Limited acquired by the Government for the account of the Exchange Fund. International central securities depositary Clearstream, a subsidiary of Deutsche Boerse AG, announced to launch a joint cross-border collateral management cooperation and liquidity services with HKMA. The cooperation will allow international financial institutions to use their extended pool of collaterals in Clearstream to conduct repo transactions with and obtain liquidity from members of the HKMA's central monetary market unit, to be launched in the first quarter of 2013.
7.)GIC - Government of Singapore Investment Corporation - manages assets of about $247,5 Billion. Investment portfolio: 17% Nominal Bonds & Inflation-Linked Bonds, 45% Public Equities (30% developed markets and 15% emerging markets), 27% Real Estate, Privat Equity, Infrastructure and Others, 11% Cash and Others, by region: 42% Americas (U.S., Latin America, Others), 29% Asia (Japan, North Asia, Others), 26% Europe (UK, Euro-zone, Others), 3% Australasia. Important holdings in: China International Capital Corporation/CICC, Uptown Munich Tower/Germany, Kelda Group and Bluewater Shopping Centre/UK, Queen Victoria Building and Chifley Tower/Australia, Blackstone Group, Franklin Centre, Citigroup/3,7% and Kohlberg Kravis Roberts & Co./U.S., Westin/Paris-France, UBS/6,40% -Switzerland.
8.)Temasek Holdings' Investments - State run Singaporean wealth fund - investment portfolio $157,5 Billion/ $198 Billion in 19 nations, by region: 42% Asia, 30% Singapore, 25% U.S., Europe, Australia and New Zealand, 3% Latin America & Middle East. Important holdings in: China Contsruction Bank/CCB-6,5%, Standard Chartered Bank/18,8%, Bank of China/BOC-4,765%, Industrial and Commercial Bank of China/ICBC -1,3%, Keppel Corporation/21%, Chesapeake Energy Corporation, Clean Energy Fuels Corp., Capital Land, Neptune Orient Lines.
9.)QIA - Qatar Investment Authority - investment portfolio above $115 Billion/$135 Billion. Qatar is the world's largest exporter of liquefied natural gas/LNG, holding as much as one third of the world's total gas reserves, and an oil exporter, subsidiaries: Qatar Holding, responsable for direct investments into strategic companies, Qatari Diar Real Estate Investment Company, the real estate arm of QIA. Investments: London Stock Exchange/ 2o%, Volkswagen/VW/17%, Porsche/10%, Credit Suisse/6,17%, Barclays/6,65%, China's Citic Capital/22,22%, Agricultural Bank of China/2,1% (China's biggest bank), Hochtief/9,1%, global mining company Xstrata/12,3%-Qatar is the second largest shareholder, agreeing to a $32 Billion takeover bid through commodity trader Glencore, French Conglomerate Lagardère/12,8%, leading French building and civil engineering company Vinci Construction/5,7%, bought: Valentino Fashion Group paying $700 Million, luxury department store Harrods for about Pfd.stg.1,5 Billion, 52-60 Avenue de Champs Elysees (Main Tenant Virgin Megastores France) paying €500 Million and 1 Cabot Square in Canary Wharf, London negotiating a sales-and-leaseback-transaction worth €420 Million, holding stakes in: Tiffany and Co., the U.K. supermarket giant Sainsbury PLC, and Louis Vuitton. Will sign an agreement with Deutsche Bahn of Germany for Qatar's integrated railway project worth about $17 Billion through the constitution of Qatar Raylways Development Company in which Qatar will hold 51% and Deutsche Bundesbahn 49%. QIA cashed in its remaining warrents in Barclays Bank, leaving QIA with 6,65% still as the bank's top shareholder. Owns: Hotel Monceau, Paris, Hotel Lambert, Kleber Hotel Tour Eiffel Champs Elysee, Concorde Lafayette Hotel des Louvres, Paris, Hotel Martinez, Cannes, Palais de la Méditerranée, Nizza, Hotel Carlton, Cannes. Signed a partnership agreement with Luxembourg oriented to the aircraft sector (Cargolux), the private satellite operator (SES Astra) and banks, buying through Precision Capital S.A., owned by the ruling familiy of Qatar, 'KBL European Private Bankers', including German private bank Merck Finck und Co., from Belgian KBC Group paying €1,05 Billion. Is interested to buy into Airbus parent EADS/European Aeronautic Defence and Space, purchasing the 7,5% stake which Daimler holds and wants to sell. QIA was looking to raise its stake in SHELL from below 3% to 7%, which would make it the biggest shareholder above Blackrock's 5%, operating SHELL multi-Billion natural gas projects in Qatar. Qia has already stakes in French oil major TOTAL and the European utilities Energias de Portugal and Iberdrola. France and Qatar launch a Fund to invest €300 Million in small and medium sized French companies, in a bid to quash concerns raised by a previous Qatari plan to invest specifically in depressed French suburbs. Qatar bought overindebted football club Malaga, holds a smaller stake in FC Barcelona and offered to buy AC Milan, owning already French football club Paris St. Germain/PSG. Qatar Holding will launch a new $12 Billion investment firm to purchase assets globally, planning to list the company in the Doha Stock Exchange. Qatar Holding joined U.S. equity firm Summit Partners, a minority shareholder with 20% since 2007, in holding a minority stake in leading French luxury e-commerce group Vente-Privée, increasing founder Jacques-Antoine Granjon his ownership in the company to close to 25%.
The Emir, Hamad Bin Khalifah Al Thani, has a broad strategic control, while his son Tamim Bin Hamad Al Thani, is increasingly active and arranged several sporting ventures, including the acquisition of Paris St. Germain. Hamad Bin Jassem Al Thani, Prime Minister and Foreign Minister, is the key player in QIA, while Sheika Moza, the Emir's second wife, is the guiding force behind the social and educationally focused Qatar Foundation. Sheika Mayassa, the Emir's and Moza's daughter, is in charge of museums and art projects. The Emir, Hamad Bin Khalifa Al Thani, handed over power to Tamim Bin Hamad Al Thani, his son and heir. Qatar will host the 2022 FIFA World Cup, pushing the country's growth and progress, totaling worth of projects under way or planned more than $171 Billion, announcing Barwa Bank, where Qatar Holding has a 12,1% stake, it will participate to finance them.
London based and London Stock Exchange listed Qatar Investment Fund/QIF invested 91,3% of the company's funds in Qatari equities with 50,9% allocated in the banking sector and may invest up to a maximum of 15% of its net asset value outside Qatar within the Gulf Corporation Council/GCC region.Its top five holdings as of March 31, 2013: Qatar National Bank 18,31%, Industries Qatar 15,96%, Masraf Al Rayan Bank 9,23%, Commercial Bank of Qatar 7,28%, Barwa Real Estate 5,76% - total net assets $190,7 Million. The 3 largest shareholders of QIF: City of London Investment Management Company 29,28%, Qatar Insurance Company 17,42%, Qatar Holding 11,10%.
10.)The Stabilization Fund of the Russian Federation was split in February 2008 into a Reserve Fund, which manages the official reserves from oil and gas revenues and may be used to cover Federal budget deficits, and the National Welfare Fund/NWF, the official sovereign wealth fund of Russia, totaling both about $219,1 Billion. The Reserve Fund worth about $132,6 Billion invests in AAA rated fixed income securities with a remaining maturity of three years or less denominated in $/45%, €/45% and GBPounds/10%, while the National Welfare Fund worth about $86,5 Billion considers also purchasing riskier, higher return vehicles.

No comments: