GIC led Q1 sovereign investor deals

Total first qtr deal valve falls 62% to $9bn

LONDON, April 11, (RTRS): Singapore’s $344 billion GIC led the sovereign investor pack in the first three months of 2017, sealing two of the biggest investments of the quarter.

Wealth funds and state pension funds participated in a total $9 billion of deals in January-March.

GIC teamed up with private equity firm Hellman & Friedman in a $1.9 billion deal for a 75 percent stake in Spain’s Allfunds Bank, and paired with Paramount Group to acquire 60 Wall Street, a “trophy asset” in downtown Manhattan, for $1.04 billion. The 47-storey tower serves as the US headquarters of Deutsche Bank.

GIC, which was involved in at least 12 deals over the quarter, was also part of an investment with the Canada Pension Plan Investment Board (CPPIB) and property owner Scion Group for three US student housing portfolios worth over $1 billion.

The Singaporean fund has been very active in the last six months, having secured the biggest real estate deal of the fourth quarter of 2016, when it paid $2.7 billion for P3 Logistic Parks, a European warehouse company.

In GIC’s last annual report, chief investment officer Lim Chow Kat said the fund would look for bargains during periodic spikes in market volatility. It continued to see opportunities in private equity, real estate and infrastructure, Lim said.

GIC is funded from government budget surpluses generated from trade rather than commodities, so it has been less constrained over the last two years compared with some of its oil-backed peers, hit by plunging prices.

“Given the high competition for assets, especially in private markets, it makes sense that Middle East funds are losing some of these deals,” said Javier Capape, a director at the Sovereign Wealth Lab research centre at the IE Business School.

He added that oil price uncertainty had encouraged some sovereign investors to be more prudent and deploy more capital at home, although these deals weren’t always publicised.

At $9 billion, total deal value for the first quarter was down 64 percent from fourth quarter 2016, with fewer of the chunky infrastructure and real estate deals that boosted the overall value in the previous quarter.

However, the number of deals was almost unchanged at 33, versus 34 in the fourth quarter of 2016.