Sovereign Wealth Funds

Norway’s anti-plastics push has firm foundations

6 Sep 2018

Oslo’s $1 trillion wealth fund wants its investments to flag what they’re doing on ocean pollution. As a recent spat over oil and gas holdings shows, political meddling means good intentions don’t always translate into action. That should be less of a problem this time around.

Norway and Saudi face two sides of same problem

24 Aug 2018

Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.

Saudi’s investment fund: the view from 2023

20 Aug 2018

The kingdom wants to expand the assets of its Public Investment Fund by 60 percent by 2020 as it diversifies away from oil. That involves it taking some big, risky bets. Breakingviews imagines the letter its chief executive will write five years hence.

Tesla is risky vehicle for Saudi reform drive

14 Aug 2018

The Gulf state wants to diversify away from oil and might help take the auto group private, reckons CEO Elon Musk. That’d be a mistake. Tesla could flop even if electric cars take off, and Musk’s buyout price is too high. There are cheaper ways to play the energy transition.

Saudi’s fund manager-in-chief veers off-piste

10 Aug 2018

Mohammed bin Salman wants to diversify the desert kingdom away from oil. Buying pricey Tesla stock while selling Canadian assets seems a strange way to do that, though. To stop further net outflows of capital, the crown prince could do with sticking more closely to his mandate.

Tesla buyout would need to go short on leverage

7 Aug 2018

Elon Musk wants to drive the unprofitable electric-car maker off the public market at a $72 bln sticker price. Banks would balk at lending much more than a third of that, so he’d need to persuade shareholders to stay and big investment funds to jump in. That’s eminently doable.

Sovereign investors sound market alarm

13 Jul 2018

Singapore's GIC has joined compatriot Temasek in striking a note of caution. It is reducing its exposure to developed markets and holding more cash: trade ructions, tighter rates and stretched valuations are giving it pause. That all points to lower returns ahead.

Viewsroom: 1MDB rears head in Malaysian election

16 May 2018

The $5 bln sovereign-wealth fund’s scandal played a role in voters replacing Prime Minister Najib Razak with nonagenarian Mahathir Mohamad. Its resurgence could mean bad news for Goldman Sachs and Najib himself. Plus: Walmart nabs Flipkart in a big bet on e-commerce in India.

China is third-best option for Saudi Aramco

16 Oct 2017

With its $2 trln public offering in the balance, the Saudi oil giant may bring in a Chinese investor. That would provide cash the state doesn’t urgently need. The other perks of an international IPO, like regional influence and financial discipline, aren’t to be found in Beijing.

Aramco exemption bends London IPO rules to limit

13 Jul 2017

The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.

Temasek’s garage sale highlights capital dilemma

12 Jul 2017

The Singapore state investor sold more assets than it bought for the first time since 2009. The trend may continue with valuations high and stiff competition for assets from cash-rich private equity players. It will also make it hard to redeploy capital efficiently.

GIC’s shrinking returns add to Singapore’s gloom

10 Jul 2017

The state fund delivered one of its worst performances since 2001. With geopolitical risks on the rise, the outlook is depressing too. Singapore's challenges investing overseas compound the mood at home as the city's first family feud in an ugly public squabble.

Qatar’s American Airlines ticket not just politics

22 Jun 2017

Buying a stake in the carrier has all the hallmarks of a politically motivated deal. Flexing its financial muscles in the United States sends a defiant message to its enemies circling in the Gulf. But American Airlines also offers commercial value on top of diplomatic leverage.

Dumb and Dumber 1MDB money trail is one to cherish

16 Jun 2017

Cash from the Malaysian fund ended up in a yacht, art, and rights to the film “Dumb and Dumber To”, the DOJ claims. The charges are incredible. But authorities are unlikely to recoup much. And alas, the days of U.S. crusades against global financial crime look numbered.

Qatar quarrel shows limit of its sovereign wealth

6 Jun 2017

The emirate’s $300 bln-plus fund has snapped up landmark buildings and stakes in companies like Barclays and Rosneft. The spree was meant to generate returns and diplomatic clout. But Qatar’s largesse has produced few allies to help it face down its more powerful neighbours.

Politics align for Malaysia bank merger

1 Jun 2017

Efforts to squish together the country's banks have repeatedly failed. Now RHB could buy AmBank, creating a $9 bln group. After the 1MDB fund scandal, big shareholders may be keener to do a deal. A rising oil price helps too. The trick will be to keep the structure simple.

Saudis place $20 bln bet against U.S. dysfunction

21 May 2017

The Kingdom's pledge to Blackstone may turn into $100 bln of firepower aimed at upgrading American infrastructure. The problem is finding states and cities that want private cash. Riyadh will need a lot more patience than with its equally huge SoftBank-led tech venture.

GIC’s humbling retreat from UBS makes sense

16 May 2017

The Singaporean wealth fund is losing money by selling a chunk of the bank it helped rescue nearly a decade ago. Even long-term investors have limits to their patience. A bounce in global financial stocks could tempt others such as Temasek to sift the wheat from the chaff.

French banks’ foreign strength cuts both ways

4 May 2017

Strong first-quarter growth in BNP Paribas and SocGen’s foreign markets offset weaker showings at home. Still, SocGen’s 963 mln euro Libyan settlement shows how overseas adventures can go awry. And if Sunday’s election delivers a surprise, French banks face redenomination risk.

Malaysia throws cheque book at 1MDB problem

27 Apr 2017

A deal with Abu Dhabi puts Malaysia on the hook for $3.5 bln of the disgraced fund's debt and leaves a dispute over a further $3.5 bln unresolved. That is a costly attempt to patch up relations between the states and avoid potential embarrassment before an election.