Kor Hotel Group, which operates about a dozen hotels worldwide, has sold a 50 percent stake to the investment arm of Abu Dhabi government to speed the company's expansion into foreign markets.
The hotel group, a unit of Los Angeles-based Kor Group, sold a 50 percent stake in itself to the Mubadala Development Co. The strategic partnership plans to focus on taking the company's Viceroy and Tides brand s into Europe, Asia and the Middle East.
Kor plans to focus on managing either Mubadala-owned properties or acting as a manager for properties not owned by Mubadala. It does not plan to build or own the hotels.
Four properties in the Middle East are currently under development, including hotels in Abu Dhabi, Dubai and Oman. Kor is also setting up regional headquarters in Abu Dhabi.
Mumtalakat Holdings posts around $650 million profit
Net income BD245.8 million Total consolidated revenues BD1.8 billion Total assets BD5.3 billion Shareholders' equity BD3 billion
According to the press release, "Bahrain Mumtalakat Holding Company B.S.C (c), the investment company for Bahrain, announced today its inaugural set of financial results for the period 29 June 2006 to 31 December 2007. Having been created in June 2006 to be an independent holding company for the Government of Bahrain's non-oil and gas assets, Mumtalakat now has a total of 35 commercial enterprises within its $14 billion portfolio. Its investment strategy is to enter into partnerships with local and international institutions targeting opportunities for long-term, sustainable financial returns."
The China Investment Corporation, a $200 billion sovereign wealth fund based in Beijing, is launching a recruiting effort to help build up internal expertise. Most SWFs have 45-50% of their assets externally managed.
Some positions include: 1.High-return Bond Investment Manager 2.Senior Lawyer 3.Emerging Markets Bond Investment Manager 4.Real Estate Investment Senior Analyst 5.Senior Research Manager 6.Risk Assessor
Persian Gulf Shares Rebound on Fed's Bailout Plan; Emaar Climbs
Persian Gulf shares advanced as the U.S. government announced a plan to buy $700 billion in bad mortgage investments from financial companies and after global markets rallied late last week.
Emaar Properties PJSC, the Middle East's biggest publicly traded real-estate company, had its biggest gain since listing in March 2000, data compiled by Bloomberg show. National Bank of Abu Dhabi PJSC rose the most in almost eight months and Zain gained after raising $4.49 billion through a capital increase.
The Kuwait Investment Authority may inject as much as 1 billion dinars ($3.75 billion) into Kuwait's stock market to alleviate recent declines, Asharq al-Awsat reported today, citing unidentified officials. The Kuwaiti government last week urged the KIA, the country's $250 billion sovereign wealth fund, to infuse 300 million dinars into Kuwait's stock market, which has seen shares lose 12 billion dinars in value so far this month, the newspaper said.
Wall Street: Where have all the Sovereign Wealth Funds Gone?
Turbocharged with extra oil cash in the first half of 2008 before the sharp 1/3 rd correction from $147 per barrel since, SWFs would have been flush again to respond to ever weakening bank equity prices. But SWFs haven't been biting. Like nearly everyone else, the credit crunch drama has turned out to be both more prolonged and severe than had previously expected, with no guarantee the worst is over, going by recent LIBOR spread widening. A banking system that now looks far too big and needs to shrink balance sheets, raising questions over solvency not just liquidity, doesn't warrant fresh capital infusions from SWF in the hope of a quick turnaround in market prices. The falling oil price has prompted further caution, though most sovereigns are still building reserves while the price remains above $50 per barrel.
This CFTC report confirms the presence of sovereign investment vehicles participating in the commodities market.
According to the CFTC, four entities were identified as sovereign wealth funds:
2 separate pension funds run by a European government 1 fund in the name of a North American government 1 fund in the name of a European city
For single-commodity clients of swap dealers 6 entities that appear to be sovereign wealth funds were identified as above the threshold levels described earlier (i.e., total all-months gross futures equivalent position of 25 percent or more of a single-month limit or level).
Norway oil fund exits Rio Tinto on ethical grounds
Norway on Tuesday excluded iron ore miner Rio Tinto from its $375 billion (212.8 billion pounds) sovereign wealth fund due to environmental concerns over its activities in Indonesia, as part of its drive for ethical investment.
Norway's Government Pension Fund -- Global, familiarly known as the "oil fund", invests under ethical guidelines set by the government. In the past it has excluded companies producing nuclear arms or cluster munitions and ones deemed to have caused environmental damage or abused workers' or other human rights.
The fund invests Norway's oil and gas wealth in foreign stocks and bonds, is Europe's biggest equity investor and holds on average over 1 percent of European listed shares.
Preview article for the next Sovereign Wealth Quarterly - October Release Q3 Y2008 Some SWFs are looking opportunistically at discounted residential properties in the West.
Bulk purchases on distressed residential properties are coming into focus for many sovereign wealth funds and other institutional investors. Some SWFs who invest in real estate stick with core real estate investments like hotels, offices, and apartments. Even some Saudi investors are looking opportunistically in acquiring agricultural real estate to stem rising food costs. These types of investments have yielded acceptable IRRs for many of the funds. Another advantage is that real estate investments are not as politically sensitive as acquiring stakes in foreign brand name corporations.
Now, a number of SWFs are looking opportunistically at discounted residential properties in the West. The United States, the UK, and Australia have been ideal candidates for sovereign wealth distressed real estate investment, in the sense that these markets are developed and REO assets are at significant discounts from their original prices. Property rights, liquidity, and ease of foreign investment requirements in real estate have also made the West an attractive opportunity. Numerous financial institutions want these assets off their balance sheets. Many sovereign investors and hedge funds are viewing these REO portfolios from 50 cents to 70 cents on the dollar.
According to RealtyTrac, an online marketplace for foreclosure properties released its Q2 2008 U.S. Foreclosure Market Report. The report shows, "foreclosure filings were reported on 739,714 U.S. properties during the second quarter, a nearly 14% increase from the previous quarter and a 121% increase from the second quarter of 2007. The report also shows that one in every 171 U.S. households received a foreclosure filing during the quarter."
Source: RealtyTrac
The views in this publication are expressed by Michael Maduell.
Michael Maduell is the Founder and President of the Sovereign Wealth Fund Institute.
9/8/2008
Italy wants study of EU sovereign fund - minister
Italy will propose that the European Union consider changing the European Investment Bank (EIB) into a sovereign investment fund for the 27-nation bloc, Economy Minister Giulio Tremonti said on Sunday.
Tremonti said such a fund could make major investments and could be one way for Europe to overcome its economic crisis. The fund could be similar to Italy's Cassa Depositi e Presiti, a state investment company that has counterparts in several European countries.
"The proposal is to turn the EIB into the European Cassa Depositi e Prestiti, that would become the sovereign fund on the European level but that could function on the local level as well," Tremonti told reporters on the margins of an economic conference.
Federal Reserve limits ICBC Loans to China Fund-Owned Companies
According to Bloomberg, "The Federal Reserve told China's sovereign wealth fund it cannot subsidize loans for its companies through the New York branch being opened by government-controlled Industrial & Commercial Bank of China Ltd.
Companies controlled by China Investment Corp. may borrow only on "market terms" from the branch of government-owned ICBC, according to a letter released today by the Fed in Washington and dated Aug. 5. Transactions with such companies are limited to 20 percent of the branch's lending base, the Fed said."
International Working Group of Sovereign Wealth Funds Reaches a Preliminary Agreement on Draft Set Generally Accepted Principles and Practices-"Santiago Principles"
The members of the International Working Group of Sovereign Wealth Funds (IWG), which met on September 1-2, 2008 in Santiago, Chile, reached today a preliminary agreement on a draft set of principles and practices for recommendation to their respective governments.
The Generally Accepted Principles and Practices for Sovereign Wealth Funds (GAPP) is a voluntary framework that would guide the appropriate governance and accountability arrangements, as well as the conduct of appropriate investment practices by SWFs. In response to the call from the International Monetary Fund's policy-guiding International Monetary and Financial Committee (IMFC), the IWG expects to present the GAPP to the IMFC at its October 11 meeting in Washington DC. The IWG intends to publish the GAPP thereafter.
The IWG members also decided to explore the establishment of a standing group of sovereign wealth funds (SWFs). This is in recognition of the need to carry forward the work relating to the GAPP, as necessary, and to facilitate dialogue with official institutions and recipient countries on developments that impact SWF operations.
IMF urges transparency as wealth fund meeting stormed
A top IMF official on Wednesday urged transparency from cash-rich global sovereign wealth funds, as protesters stormed a meeting of the world's largest state-run pension funds in the Chilean capital.
International Monetary Fund First Deputy Managing Director John Lipksy said best practice guidelines agreed on by the world's largest sovereign wealth funds this week will help reduce concerns about their investments and ward off protectionist pressures from countries where they invest.
Under the proposed guidelines the IMF will not monitor adherence to agreed, voluntary principles by the funds, who manage around $2 trillion to $3 trillion in assets between them. Instead, it is expected that those that adopt the guidelines will be better regarded than those that do not.
Abu Dhabi United Group purchases Manchester City Football Club
Abu Dhabi United Group for Development and Investment (ADUG) has bought the English football club Manchester City, Dr Sulaiman Al Fahim, chief executive officer of Abu Dhabi-based real estate developer Hydra Properties, told Gulf News on Monday.
"The amount paid for the acquisition of the club cannot be disclosed. The acquisition will help the Abu Dhabi brand name and allow talented UAE players to play in the premier league and get access to all the world class opportunities that exist," said Al Fahim by telephone.
Al Fahim, a member of the Abu Dhabi United Group board, was the architect of the deal. Former Thailand Prime Minister Thaksin Shinawatra was the previous owner of Manchester City, one of the oldest English clubs founded in 1880.
Net income BD245.8 million
