First, here are today’s top stories:
- Mercer will now fully integrate its ESG ratings across all of its manager-search and performance data.
- What's the status of China's nascent pension system? Read this.
- Goodman Group launched a $890 million partnership with the Canada Pension Plan Investment Board to develop and buy property in North America.
- Man, you know the Venture Capital industry needs some serious changes when an asset owner with a quarter of a trillion dollars located not more than 100 miles from Silicon Valley decides to give up its VC program. (But here's how one LP is doing it rather successfully.)
- The Norges Bank Investment Management is apparently so worried about the financial markets right now that it's happy to hold bonds with negative yields if it means spreading risk and minimizing the downside. Wow.
- The Massachusetts Pension Reserves Investment Management Board’s Michael G. Trotsky will head up the CFA's Asset Manager Code Advisory Committee. Good luck to him!
- Is a new sovereign wealth fund the answer for Colombia’s Dutch Disease problem? Perhaps.
Second, here are two papers for you and your hammock:
- Mark Thatcher of the LSE has a nice new policy brief entitled, “Western Policies Towards Sovereign Wealth Fund Equity Investments: A Comparison of the UK, the EU and the US.” The brief is a bit of a flashback to the national security debates of 2008, but it’s worth reading to get up to speed on where things have settled on this issue. Here’s a blurb: “This policy brief examines how Western nations respond to investment by sovereign wealth funds (SWFs). It sets out two polar positions on such investment: that it is an issue of national security, as it presents important dangers for Western countries; or that it is an economic governance issue, in which SWF investment can be beneficial to Western countries or its problems have been greatly exaggerated. The paper then compares the policies of the UK, EU and US towards equity investment in company equities. The EU and UK have treated SWF equity investment as a matter of free trade and movement of capital, and imposed few specific restrictions; indeed, they have often accepted and welcomed SWF equity investment. On the other hand, the US has often seen strong debates about whether SWF investment is a free trade or a national security issue, and has imposed much stronger legislative monitoring and restrictions.”
- Richard Eccleston of the University of Tasmania has a new paper entitled, “Australia's Future Fund: a future beyond the GFC”. Here’s the abstract: “Australia’s Future Fund (FF) was created in 2006 as a long-term savings fund designed to meet the Australian Government’s future public service pension liabilities. With the onset of the ﬁnancial crisis, few commentators thought the Australian Government would have the capacity or interest to continue investing in the FF. However, in the context of Australia’s rapid, commodity-driven recovery from the crisis there is a growing case that the FF should play a central role in a new ﬁscal policy framework designed to manage the risks associated with the current resources boom. The paper explores these arguments and the politics associated with implementing such a framework and in so doing highlights the political constraints associated with implementing SWFs in advanced democracies.”
Have a nice weekend!