It’s the weekend, which means I’ve got a Giant news roundup for you:
- Governance Woes I: China’s National Audit Office has indicated that the China Investment Corporation has displayed “dereliction of duty by managers;” “inadequate due diligence and post-investment management” and selected of overseas managers based on “not very standard” procedures. Ouch.
- Governance Woes II: After the National Audit Office report, the CIC has vowed to raise its game.
- Moves: Gordon Fyfe is leaving PSP and taking over at BCIMC. Congrats, G.
- Locals: CalPERS has invested nearly $20 billion in California companies and assets.
- The Fee Machine I: Big props to MassPRIM and State of Wisconsin Investment Board for working hard to minimize hedge fund fees.
- The Fee Machine II: The IRS is trying to help pension funds reduce fees paid to hedge funds.
- The Green Machines: Mubadala is looking to expand its footprint in renewables with new wind projects in North Africa.
- Real Estate I: AP3 has launched JV to invest in retail properties throughout Germany.
- Real Estate II: Alaska has also seeded a creative vehicle “to acquire, renovate, and lease residential properties.”
- Record Setting: New Mexico’s State Permanent Funds have just hit all-time highs with nearly $20 billion in AuM.
- Models: BCIMC is changing the way it does business; increasing in-house asset management... which is not surprising given Gordon Fyfe is taking over.
- Russia: The CPPIB’s CEO has said that he will continue to avoid Russia as an investment destination: “We just don’t know what the rules of the game there are [in Russia]. We’ll invest in places as long as we can understand the rules of the game and assess the risk, but we just can’t assess the risk.”
- Harvard: Jane Mendillo is stepping down at Harvard. (Did you know: After the massive losses in 2009, Harvard Management Company pivoted from the Endowment Model to the Canadian Model? 42% of assets are now managed in-house. I did not know that.)
- Venture Capital: Institutional investors are recommitting to venture capital in a big way, which means one of two things: 1) VCs have started to offer something more aligned to their LPs’ long-term interests (eye roll); or 2) VCs are doing a good job of selling the recent tech boom as something they are responsible for. The latter most likely ...
- Random Thoughts on VC: Let me offer you an analogy as to what’s going on in Silicon Valley and the role that VCs play. Let’s say the “river of capitalism” here in SV is flowing at 20 mph. It’s doing so because of the legacy of the 1800s gold rush (James Lick, Lester Pelton, etc.); the influence of Stanford and Berkeley, the funding from Nasa and Lockheed, the role of William Shockley and the “Traitorous Eight;” the founding of companies like HP, IBM and Apple; the culture of risk taking; the welcoming immigration policies; and so on and so forth. Venture capitalists, for their part, spotted a fast moving river and, to their credit, jumped in, adding another 2 to 3 mph to the downward path. Relative to the ground, then, the VCs can swim up to 23 mph here in the Valley! That’s remarkably fast — faster than anywhere else in the world — which is why we see so many game changing companies coming out of our river. But the problem here is that the VCs want to get paid for swimming 23 mph, when really they are only swimming 3 mph...
Have a nice weekend!
