6th February, 2024
A coalition of state-owned investors from across the world has thrown its weight behind Generate Capital in a US$1.5 billion fundraise, which boosted the sustainable infrastructure frontrunner’s funding for new projects and technologies. Existing state-owned investors from Australia, QIC and Australian Super, boosted their existing investments, while new investors included the California State Teachers' Retirement System (CalSTRS) and Australia’s HESTA. The fundraise brings the total raised since 2014 to US$10 billion. It is not unusual for Australian pension funds to co-invest, as well as draw in peers from other countries. The renewables and sustainability sector is notable in seeing a high level of convergence of state-owned investors (SOIs) in transactions. Generate Capital claimed it produced over 320GWh of sustainable power by September 2023. It is heavily concentrated in the US, particularly California, which may have drawn CalSTRS’s interest. Yet, the significant weight of Australian SOIs, acting together, suggests a potential domestic interest. Australia’s green hydrogen sector has already attracted billions of SOI capital and Generate Capital could focus increasingly on Australia’s resources. However, its ethos chimes well with the long-term objectives of a large section of the SOI universe and the platform could see other heavyweight investors pile capital into its projects. Alliances in green energy have been led by Singapore’s GIC while its sister organization Temasek focused on start-ups with new technology to advance renewables, batteries and low carbon industrial processes. Gulf funds also focused both on strategic investment in domestic renewables capacities and on yield-generating assets abroad, with Mubadala leading the way through the Masdar platform as well as directly. The interest in green hydrogen is high, as it could provide the feedstock for ammonia and methanol production and revive the chemicals chain, while being de-linked from the oil and gas sectors. GIC backed a major green ammonia plant in India, partnered with co-investors in Australia’s hydrogen sector, snapped up a stake in InterContinental Energy, and joined Copenhagen Infrastructure Partners in backing a green bond issue by TagEnergy of up to US$ 0.6 billion to fund renewables and battery storage in Australia, the UK and Europe. Bio-based fuels also drew interest, with OTPP committing US$ 0.3 billion to a JV with Sevana Bioenergy to develop renewable natural gas projects utilizing organic waste; and Mubadala’s Acelen using its Mataripe refinery site in Brazil as host to an innovative US$ 2.5 billion push into cleaner aviation fuel from oils derived from soybean, palm and macauba oils. Instead of simply divesting carbon intensive assets, Canadian PPFs have looked to greening them. CPP partnered with IKAV to acquire Aera Energy, which represents 25% of California’s oil and gas production with a view to expanding its renewable energy portfolio. All in all, Sovereign Investors invested, once again, more in the so-called green assets than in the so-called black assets in 2023, reaching a historical maximum of US$ 26.1 billion in the support to companies related to the energy transition, including renewable energy, battery storage and electric vehicles. Gulf SWFs were responsible for almost half of that figure, and are pushing the energy transition agenda and recycling revenues from black assets into green impact investments, particularly in their own backyards. Canadian, European, Singaporean, and Australian funds are also freeing up plenty of dry powder to plunge capital into achieving their net zero ambitions, with the rest of the funds set to join them in co-investments.
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8th June, 2023
A slew of public pension fund giants have swung their weight behind Just Climate’s Climate Assets Fund I (CAF1), which has exceeded its US$1 billion target by 50% and marks the latest of several sovereign-backed billion-plus funds.
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8th June, 2022
Global SWF has taken stock of portfolio losses in local currency terms and finds that the value of state owned investors' AUM has taken a hammering since Russia’s military action in Ukraine with hundreds of billions of US dollars wiped off their portfolios - yet, there is still a chink of light in the gloom.
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2nd May, 2022
Comparing returns across State-Owned Investors is never easy and it always takes a lot of assumptions and disclaimers. Yet, most funds have now reported their FY21 results, and we have looked at the average investment returns for the past six years (which we consider a fair investment cycle) across 20 major SWFs and 20 major PPFs in an apples-to-apples analysis.
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8th March, 2022
Today is International Women’s Day and, once again, we have studied in detail the female representation at State-Owned Investors, including SWFs and PPFs. Diversity and inclusion are becoming key parameters in ESG reporting, and funds are putting a lot of effort in recruiting and retaining people of all genders, races and backgrounds. We observe large disparities in the composition of the workforce of the world’s major SOIs
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1st March, 2022
CalSTRS is the world’s largest educator-only pension fund, and the world’s second largest state PPF, only behind its stablemate CalPERS. For the fiscal year 2020-21 the educator-only fund scored an impressive 27.2% return, which will improve its funding ratio by 300 bp. In the past few years, it has built a successful collaborative model and become a frequent partner of other SOIs. We had the immense pleasure of talking with Scott Chan, its Deputy CIO, about the challenges and opportunities ahead.
2nd February, 2022
US-based public pension funds have benefitted from the boom in equity markets and have been reporting extraordinary results for the 2021 fiscal year. But what has this meant for other funds and states, and what is the current situation across the US – which remains the world’s largest country in terms of sovereign capital?
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27th August, 2021
Recent annual returns by state-owned investors have demonstrated that the rally in public equities has boosted portfolios, but long-term returns suggest private markets generate stronger yield.
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20th August, 2021
The formation of a US clean energy firm Arevon Energy by APG, CalSTRS and ADIA this week comes hot on the heels of US Senate approval of a US$1.2 trillion bipartisan infrastructure bill that underscores the Biden administration’s renewable energy agenda.
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27th July, 2021
Last Friday, GIC reported its best results in a long time, with rolling returns improving significantly and implying an annual yield for FY21 of 37.5%. Yesterday it was BCI who reported a 16.5% (FY ending on March 31) and CalSTRS who announced a record of 27.2% (FY ending on June 30).
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18th March, 2021
The US’s second largest PPF, the US$287 billion California State Teachers’ Retirement System (CalSTRS), is ramping up its exposure to the US real estate through its model of fostering co-investment platforms.
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9th March, 2021
Zafer Sönmez, the CEO of the Turkey Wealth Fund, was abruptly replaced today, 3.5 years after he took office.
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