Norway’s NOK 2385 billion ($390 billion) sovereign wealth fund has overhauled its strategy for active ownership, adding water management as a new focus area, as the fund achieved its biggest ever single quarter return of 12.7 per cent.
Faced with falling valuations and few options for raising new capital, European private equity managers have targeted family companies undergoing generational change and corporate consolidations across the continent to secure new deals. But some managers are struggling to keep existing portfolios afloat, and have asked investors to ‘recycle’ commitments into old investments.
Sovereign wealth funds (SWFs) may allocate substantially more to equities if they consider
correlations between natural resources and financial assets in portfolio optimisation, according to State Street’s Vision Report, which also suggests SWFs consider becoming more active share owners as a consequence of the financial crisis.
Massachusetts-based consultant, NEPC, advises that clients allocate between 5 and 15 per cent to real assets – including commodities, TIPS and direct investments in real estate, energy and infrastructure. This article by consultant Edward O’Donnell examines the rationale, risks and potential returns of allocating to real assets.
In seeking to minimise pension risk, many companies have chosen to freeze or close defined benefit pension plan in the hope such an approach might give them time to adjust and increase corporate value. In a recent article published in the Financial Analysts Journal, Brendan McFarland, Gaobo Pang and Mark Warshawsky examine the impact of freezing or closing a defined benefit plan on the sponsoring companies’ market value.
CalPERS is seeking consulting firms for a dedicated real estate Spring-fed pool, the first competitive selection process since 2003, with five-year contracts to begin in
July next year.