Welcome to the weekend. Here’s some of the top stories from the past week:
- SDFs: China’s new $40 billion Silk Road Fund will be, according to Chinese officials, purely profit seeking; it will not seek any developmental or political objectives whatsoever by investing along the silk road ... Well, except for, as the new chief just said, to boost China’s clout abroad. But just that one non-financial objective. Other than that, it’ll be all financial, all the time.
- Newsflash I: Research shows that long-term investors’ behavior in the real world can best be described as “short-term behavior.” Oh you don’t say ...
- Newsflash II: Research shows “no evidence” that the advice given by investment consultants to pension funds “adds value.” Huh, no kidding ...
- Make it Rain I: Montana Republicans voted down a new wealth fund this week. And here’s a gem of a quote that describes the (flawed) logic of the Republican position: “When the boom is happening is when the money is needed most.” Um, dude, the research is pretty clear on this one: Volatile commodity revenues negatively impact growth in resource-rich states. So establishing a fund that can smooth revenues and allow for prudent fiscal policy is, in fact, a very good idea. Making it rain in boom times? Not a good idea.
-Make it Rain II: Acid rain that is. The ethical and environmental darling of the sovereign wealth fund world, Norway’s NBIM, just rained £20 billion onto oil & gas companies in 2014.
- Package Deal: The China Investment Corp. is is now offering countries in emerging markets “package deals” in which they offer funding for infrastructure, oil, gas and agriculture in one fell swoop. (As in, you’ll help me build the infrastructure to help me export my oil, gas and food to you? Awesome.)
- Short Your Friends: Here’s how Norway’s sovereign fund thinks about trading government bonds in Europe: “Our general strategy is to use occasions of market dislocation.” Diplomatic? No. But it at least offers some insight into Norway’s widely-reported “Iceland short” from the financial crisis ...
- The Fee Machine I: Increasing fees and costs have pushed the the UK’s Pension Protection Fund to consider in-sourcing its asset management. About time.
- The Fee Machine II: The NAPF Chairman gets it: “It’s about the recognition that, in a low interest (rate) world, every pound lost in inefficiencies or excessive charges is a pound lost in return ... invest smarter.” Preach on.
- Catalytic Capital: The U.K. venture space is taking off thanks to a doubling of early stage equity checks coming from ... the government.
- Lobbying: Large infrastructure investors have come together to create a global lobbying group to champion their cause.
Have a great weekend!
