5 sovereign wealth funds to keep an eye on in Asia

In recent years, sovereign wealth funds have made headlines for a variety of reasons. In Malaysia, corruption allegations stemming from 1Malaysia Development Berhad thrust Prime Minister Najib Razak’s administration into an uncomfortable spotlight while funds from the Middle East and China were accused by the United States of acting unfairly in the market. In light […]

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This Picture taken on November 11, 2016 shows a child (C) standing behind a placard reading "Please Step Down Najib" as members of civil-society alliance Bersih posing for pictures ahead their demonstration in the capital Kuala Lumpur to demand Najib's resignation in Malaysia's northern town of Ipoh. With yellow flags waving and vuvuzelas blaring, a convoy of two dozen cars snakes into this sleepy Malaysian town, breaking the rural calm with warnings of corruption and national decay. / AFP PHOTO / MOHD RASFAN / TO GO WITH AFP STORY: Malaysia-politics-Najib-demonstration-1MDB-corruption, FOCUS

February 1, 2018

In recent years, sovereign wealth funds have made headlines for a variety of reasons. In Malaysia, corruption allegations stemming from 1Malaysia Development Berhad thrust Prime Minister Najib Razak’s administration into an uncomfortable spotlight while funds from the Middle East and China were accused by the United States of acting unfairly in the market.

In light of recent events, here are five important wealth funds from around the region.

1Malaysia Development Berhad

Perhaps the most infamous sovereign wealth fund in Asia, 1Malaysia Development Berhad (1MDB) was created by current Malaysian Prime Minister Najib Razak in 2009 to further develop the country’s economy in a sustainable manner through foreign direct investment and strategic global partnerships. The company was involved in a number of large-scale projects, including the multi-billion-dollar Tun Razak Exchange and urban development project Bandar Malaysia. In 2015, 1MDB made headlines around the world for the alleged misappropriation of funds.

China Investment Corporation (CIC)

The second largest sovereign wealth fund in the world according to SWFI rankings, China Investment Corporation was created in Sept 2007 to diversify the country’s foreign exchange holdings. CIC currently has three subsidiaries: CIC international, which manages overseas assets, CIC Capital, which focuses on making direct investments to enhance the company’s portfolio, and Central Huijin, which makes equity investments in state-owned financial institutions in China, as stated on the company’s official website.

According to the New York Times, the company places a particular emphasis on infrastructure, and its portfolio includes major projects such as Heathrow Airport and the Port of Melbourne. The investor has not always received a warm welcome, however, with the United States preventing it from making similarly large investments within US borders last year amid fears of growing Chinese influence.

Temasek Holdings – Singapore

Established in 1974, Temasek holdings is a large investment company which focuses primarily on investments within Asia. Although it is headquartered in Singapore, it has an additional 11 international offices and owns a portfolio worth S$275 billion as of 31 March 2017. Its portfolio spans a wide range of industries.

Crown Property Bureau – Thailand

While not technically a Sovereign Wealth Fund, Thailand’s Crown Property Bureau is a wealth fund belonging to a sovereign. It manages the royal family’s real estate and investments and is thought to control billions of US dollars’ worth of assets, according to The New York Times. Established in 1936, the agency is under the control of a board appointed by the monarchy and the government. Its governing board comprises Thailand’s Minister of Finance and an additional six members appointed by the King. It holds shares in Siam Cement group, the largest building material company in Thailand, and Siam Commercial Bank, the country’s oldest bank and holds a minority stake in Kempinski Hotels Group.

Korea Investment Corporation

Korea Investment Corporation is a sovereign wealth fund created in 2005 to preserve and increase South Korea’s national wealth by investing public funds in various international financial assets, according to The International Forum of Sovereign Wealth Funds. Assets that the company invests in include public equities, bonds, commodities, private equity, real estate, and hedge funds. It is headed by the Steering Committee, which includes the chairman, CEO, six private sector professionals, the Minister of Strategy and Finance and Governor of the Bank of Korea.

 

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