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from Breakingviews:

Sovereign fund chiefs not created equal

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By Una Galani

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

China Investment Corporation finally has a new boss. But compared to most companies, a change of the top at a sovereign wealth fund doesn’t always mean a change of tack. A sovereign fund’s proximity to the government and its investment approach are critical when it comes to determining the importance, or relative unimportance, of who sits at the top.

Ding Xuedong, a career bureaucrat, may be relatively unknown in global financial circles. That needn’t matter. His predecessor Lou Jiwei, who was promoted to finance minister in March, also lacked experience when he took charge of CIC when it was established in 2007.

But that didn’t stop CIC from growing; the fund has more than doubled in size and now manages roughly 15 percent of China’s $3.4 trillion foreign currency reserves. CIC’s domestic portfolio is dominated by legacy stakes in the country’s biggest banks and the fund outsources most of its overseas investments to external money managers. Unless the fund gets a big injection of new money, it’s unlikely Ding will get a chance to create waves.

from Breakingviews:

Barclays bet lives up to rich billing for Qatar

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own

A massive bet on Barclays is living up to its rich billing for Qatar. The complex 3.4 billion pound investment in the UK bank has earned a 19 percent internal rate of return for the sovereign fund, according to a Breakingviews calculation. That's pretty good, factoring in the huge risk of propping up a universal bank at the height of the financial crisis. But it will grate for Barclays shareholders who resented the deal in the first place.

from Global Investing:

Norwegians piling into Korean bonds

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One of the stories of this year has been the stupendous rally on emerging local currency debt, fuelled in part by inflows from institutional investors tired of their zero or negative-return investments in Western debt.  Norway's sovereign wealth fund said last week for instance that it was dumping some European bonds and spending more of its $600 billion war chest in emerging markets.

Quite a bit of that cash is going to South Korea. Regulators in Seoul recently reported a hefty rise in foreigners' bond holdings (see here for the Reuters story) and  Societe Generale has a note out dissecting the data, which shows that total foreign holdings of Korean bonds are now worth around $79 billion -- back at levels seen last July.  Norwegians emerged as the biggest buyers last month,  picking up bonds worth 1.5 trillion won ($1.3 billion) , almost double what they purchased in the entire first half of 2012. Norway's holdings of Korean Treasuries now total 2.29 trillion won, up from just 190 billion won at the end of 2011.

from Breakingviews:

Sovereign funds still hungry for Western banks

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Sovereign wealth funds are still hungry for Western banks. Even though an early-crisis wave of financial investments mostly ended badly, Credit Suisse’s latest 3.8 billion Swiss franc cash call shows rich states still have faith in global lenders.

from Breakingviews:

Temasek’s triple personality bodes well for returns

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Temasek is turning into a financial chimera. Where that mythical beast was part lion, goat and serpent, the Singaporean fund combines aspects of a hedge fund, private equity house and investment bank. That combination sounds good for returns, though it might not sit well with Temasek’s political ties.

from Breakingviews:

Qatar plays merger-maker at Glencore-Xstrata

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Qatar is playing merger-maker for Glencore-Xstrata. The Gulf state’s sovereign wealth fund has already proved it can act as a successful arbitrageur in M&A situations. It hasn’t revealed its intentions for the 5.5 percent stake in Xstrata built in the two months since Glencore agreed to merge with the Anglo-Swiss miner in a $90 billion deal. But the bold $2.7 billion investment could be another win.

from Breakingviews:

Prestige and power fuel Qatar’s frantic shopping

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Investors searching for financial logic to Qatar’s raft of high profile foreign investments risk coming unstuck. Within recent weeks the tiny Gulf state’s sovereign fund has made moves on France’s Total, conglomerate Lagardere and luxury house LVMH. The Qataris’ rapidly expanding pick n’ mix portfolio has led bankers to compare the strategy to the one that led Dubai into crisis.

from Global Investing:

A scar on Bahrain’s financial marketplace

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Bahrain's civil unrest -- which had a one-year anniversary this week -- has taken a toll on the local economy and left a deep scar on the Gulf state's aspiration to become an international financial hub.

A new paper from the Sovereign Wealth Fund Initiative, a research programme at Center for Emerging Market Enterprises (CEME) at the Fletcher School at Tufts University, examines how the political instability of 2011 is threatening Bahrain's efforts in the past 30 years to diversify its economy and develop the financial centre.

from Breakingviews:

Is Hugo Chavez ahead of the investment curve?

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Venezuelan President Hugo Chavez plans to move billions of dollars of cash reserves from developed to developing countries, according to media reports. This may reflect politics, or the need to keep creditors sweet. But given the budget and bank woes afflicting the United States and the European Union, Chavez may not be alone seeking alternatives.

from MacroScope:

Sovereign wealth fund under discussion… in Rwanda

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A number of African nations have established or are having debates about establishing sovereign wealth funds to manage their mainly resource-based wealth.

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It may be surprising however to hear Rwanda -- an aid-dependent nation racked by the 1994 genocide -- is considering one. Its foreign minister Louise Mushikiwabo says a sovereign fund would help develop its economy and ease dependency on aid.

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