Side Letter: Aus SWF rallies troops for inflation battle; $83bn pension’s new CIO

Australia's $139 billion sovereign wealth fund is nearly doubling its investment team in anticipation of rising inflation. Plus: the UN's $83 billion pension has named a new CIO and HarbourVest is setting up shop in Singapore. Here's today's brief, for our valued subscribers only.

They said it

“It wouldn’t have been Lehman Sisters that would have run it into the ground.”

Speaking at PEI Media’s Impact Investor ForumSV Health Managers veteran Kate Bingham jokes about the importance of a having teams from different backgrounds. Full story on affiliate title New Private Markets (registration required).

Just happened

Future Fund’s inflated team
Australia’s Future Fund is taking drastic steps to prepare for the possibility of a significant rise in inflation. The A$179 billion ($139 billion; €114 billion) sovereign wealth fund plans to hire 150 additional staff, including 70 investment professionals, in Melbourne to brace for a more challenging returns environment, reports the Australian Financial Review (paywall). The move would nearly double its 80-strong existing investment team.

“To continue to be successful and to continue to be able to meet what is an increasing challenging investment mandate with interest rates at zero around the world, we needed more staff,” chief executive Raphael Arndt said during a senate hearing on Wednesday.

Future Fund’s caution is at odds with its LP peers, some of whom are upbeat on potential opportunities arising from inflation, as Private Equity International reported on Monday. Given Future Fund’s recent form when it comes to making prescient investment decisions, fellow LPs may want to follow its next steps closely.

UN’s new CIO
The $83 billion United Nations Joint Staff Pension Fund has a new CIO. Toru Shindo was promoted from deputy director for global equities, a position he’d held since 2009 and which covered both public and private investments (press release here). UNJSPF had $3.7 billion of PE AUM as of December 2019, representing about 5 percent of its assets at the time, according to PEI data. The pension could become a more familiar face in PE, having been advised that year to increase its strategic asset allocation to 9 percent.

HarbourVest’s new digs
Yesterday, PEI broke the news that HarbourVest Partners is establishing an office in Singapore. The move will help build relationships with up-and-coming GPs in the growth and VC markets of South-East Asia, and to grow in line with Indian and Chinese firms that are expanding their footprints in the region. Singapore will mark HarbourVest’s fifth office in Asia, building on a reputation which saw it named Fund of Funds Manager of the Year in Asia in the latest PEI Awards.

They did the maths

Lots ventured, lots gained
VC has had a storming year. The asset class generated a 53.9 percent one-year net return, more than double that of expansion or growth equity and buyouts, according to the latest quarterly report from analytics firm Burgiss.

Essentials

Helios nets NBA deal
PE’s love of live sports has reached Africa. On Monday, the National Basketball Association said it had formed a $1 billion entity on the continent with backing from Africa-focused private equity firm Helios Investment Partners. Live sports generated $144 billion of revenue in 2019, and the rapid growth of smartphones in Africa represents a tantalising prospect for those generating direct-to-consumer content. If you haven’t already done so, read PEI’s Deep Dive into sports investing here.

Dig deeper

Institution: Fubon Life Insurance Company
Headquarters: Taipei, Taiwan
AUM: NT$4.40 trillion

Fubon Life Insurance has confirmed a $65 million commitment to KKR North America Fund XIII, according to a filing from the insurer. The fund, which closed at $18.5 billion, is the latest North American buyout vehicle managed by KKR.

Fubon Life Insurance Company’s recent private equity commitments have been made through venture capital and buyout vehicles across several regions.

For more information on Fubon Life Insurance, as well as more than 5,900 other institutions, check out the PEI database.


Today’s letter was prepared by Alex Lynn with Carmela Mendoza and Michael Baruch.