Welcome to the weekend, everybody. Here’s what’s new on the Avenue:
- New SWFs: Hong Kong will try to set up a new Future Fund — i.e. pension reserve fund — before the end of the year.
- Music Meet Ears: “The structure of the traditional private equity fund is under threat as investors seek new ways to buy and own companies without paying high fees to buyout firms ...” Mmmmmmm. That’s nice.
- Bad Idea Jeans I: With markets at all time highs, corporate pensions are now talking about RE-risking their portfolios instead of DE-risking them. (“Make it 200!”)
- Bad Idea Jeans II: Japan’s government has decided that the $1.2 trillion Government Pension Investment Fund doesn’t need a new governance framework to reflect the increasingly diversified asset allocation. In other words, it does not feel the need to match its increasing risk budget with an appropriate governance budget. (“When’s the next time I’m going back to Haiti?”)
- FTW: A simple blend of index funds beats hedge funds over 3, 5, and 10 years ... and yet institutional investors continue to pour money into this compensation structure dressed up as an asset class.
- Collaboration: Russia and Abu Dhabi’s Mubadala are in talks to launch a $200 million transport project in Cuba.
- Buffer Funds I: Iran will take $4.8 billion out of its sovereign fund and use it to develop its oil industry.
- Buffer Funds II: Russia too will be dipping into its SWFs ... again.
- Geographic Expansion I: AusSuper is facing a “wall of money” and has some dramatic plans to manage what will be massive inflows.
- Geographic Expansion II: Korea’s National Pension Service is opening its 3rd overseas office.
- ESG! Sweden’s AP4 has outperformed its benchmark for the 12th year in a row, while thoughtfully incorporating ESG into its investment decision making.
Have a great weekend!
