Ã
BEIJING CHICAGO HONG KONGCAMBRIDGE DELHI DUBAI JOHANNESBURG
PARISLOS ANGELES MADRID MUMBAI MUNICH NEW YORKMOSCOW RIYADHLONDON
CASABLANCA
SAN FRANCISCO SÃO PAULO SEOUL SINGAPORE TOKYO TORONTO ZURICHSHANGHAI
“Braving the New World”
Sovereign Wealth Fund Investment in 2010
Victoria Barbary
May 2011
Copyright © 2011 by Monitor Company Group, L.P.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Monitor Company Group, L.P.
This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.
COMPANY CONFIDENTIAL
Direct Investments by SWFs Since 2000
In 2010, the number of direct investments by SWFs increased by more than 50% on 2009, but the reported value of these deals shrank by nearly a quarter.
169
192186
160
200
NumberValue ($Bn)
10996
113
146143
90
120
20
52
69
43
22
4634
4940
59656357
40
80
201115
6
2287354
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1
2010Q2 2010
2010 Q3 2010
Q4 2010
Note: Publicly available data for direct SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
2ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Value of SWF Investments by Target Sector
In 2010, SWFs returned to investments in financial services, and found investments in the commodity value chain attractive.
60 58 1US$ bn
5.950
60 58.13.6
EnergyCoal, Petroleum & Natural GasBanking, Insurance, TradingOther
5 01.71.5
40
31 0
10.2
Hotels, Restaraunts, MotelsConstructionSteel WorksMining
5.0
13.81.720
3031.03.4
21.614.9 Automobiles & TrucksTransportationRetailReal Estate
14.73.84.3
6.6
1 0
1.2
1.1
107.0
2.5
2.710.6
Other: Consumer Goods; Healthcare, Medical Equipment, Pharmaceutical Products; Recreation; Personal and Business Services; Printing & Publishing; Fabricated Products and Machinery; Communication; Aircraft ships and railroad equipment; Chemicals; Food Products; Beer and Liquor; Business equipment;
2.7 2.2 3.01.01.00
H2 2010H1 2010 H2 2009H1 2009
3ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Fabricated Products and Machinery; Communication; Aircraft, ships, and railroad equipment; Chemicals; Food Products; Beer and Liquor; Business equipment; Business Supplies and Shipping Container; Business Equipment ; Steel Works ;and Wholesale.Publicly available data for SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
SWF Investments in Financial Services, 2008-2010
SWFs’ direct investments in Financial Services are becoming more diverse
10.481.7100%
20.4
Banks
$bn
90%
80%
InsurancePrivate EquityBanks
Emerging Market Investment Funds
70%
60%
58.4%66.9%
76.6%OtherStock ExchangesOther Investment FundsAsset Managers
50%
40%
%
4.3%4.8%
8.2%
26.8%15.4%
3.1%4.9%
30%
20%
10%5.1%
1.5%4.1%5.6% 2.5%
10%9.7%
20080%
20102009
4ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Note: Publicly available data for SWF direct investments, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
Geography of SWF Investments in Financial Services, 2008-2010
Emerging markets are becoming more important destinations for SWF investment in financial services
100% 81.7 10.4 20.4 $bn
80%
90%
100% 81.7 10.4
35.0%
20.4
OECDBRICOther Emerging & Frontier Markets
60%
70%67.0%
49.0%
26.9%60.6%
30%
40%
50%
23.4%
10%
20%
30%
24.0%
0%2008 2009 2010
9.7%4.4%
Note: Publicly available data for SWF direct investments joint ventures and capital injections
5ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Note: Publicly available data for SWF direct investments, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
SWF investment in Real Estate 2005-2010
Since 2005, SWF investment in property has largely followed global market trends
12
$US Bn
10
11
1211.3
10.0EuropeAsia Pacif ic
MENANorth America
1 77
8
9 4.42.8
Other
5.9
1.7
2.44
5
6 5.5
3.72.7
0.55.9
3 4
0.92.5 2.4
1.9 2.2
1
2
34.20.5
0.8
3.4
0.91.0
0200720062005 2009 20102008
0.7 0.8 0.5
Note: Publicly available data for direct SWF equity & real estate deals joint ventures and capital injections
6ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Note: Publicly available data for direct SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
SWF investment in Real Estate 2005-2010
Breaking SWF real estate property purchases down by asset class, however, exposes the effect of the Global Financial Crisis
$US Bn
0.910
11
12
10.0
11.3
1.1
REITPropertyManagementDevelopers
7
8
92.6
REIT
0 1
0.2
4
5
60.6
2 5
5.9
6.03 7
5.5
9.3
2.7 2 3
0.1 0.30.1
1
2
3
43.42.53.7
3.5
5.2 0.7
1.42.3
0
1
2008 20102009200720062005
Note: Publicly available data for direct SWF equity & real estate deals joint ventures and capital injections
7ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Note: Publicly available data for direct SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
Value of SWF Investments by Target Region
Asia was the most attractive market for SWFs in 2010.
40Other
US$ bn
3031.1
3 9 North AmericaEuropeMENAAsia-Pacif icOther
1.52020.1
3.9
21.6
8.2
4.021.2
2.3
11 1
1.1 1.0
10
203.8
10.9
15.9
1.8
7.8
1.61.69.9
11.110
3.54.03 03.56.9
5.7
Other: Latin America, Sub-Saharan Africa, and Asia (Non-Pacific).Publicly available data for direct SWF equity & real estate deals joint ventures and capital injections
0Q4 2010
3.5
Q3 2010Q2 2010
3.0
H2 2010
3.5
H1 2010 Q1 2010
8ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Publicly available data for direct SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
Value of SWF Deals by Location of Target:
OECD vs. Emerging Markets
Reversing the trend of the last half-decade, SWFs turned their eyes to emerging markets in 2010.
5 752 768 8 20 2108 696 043 0 10 922 48 27 02 6 15 94 83 9 US$ bn100% 5.752.7
42%
68.8
10%
20.2108.6
27% 27%
96.0
14%
43.0
31%
10.922.48.2
9%
7.02.6 15.94.83.9
Emerging MarketsOECD
75%
69%
42%51%
58% 56%64% 61%
53%
75%
50%
73%
91%
69%
86%
73%
90%
25%
31%
58%
39%36%44%42%
49%
25%
47%
0%Q1
201020102009 Q4
2010200820072006 Q3
20102005200420032002 Q2
201020012000
9ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Note: Publicly available data for SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database
Investment Flows: Middle Eastern SWF investments in 2010
Middle Eastern Funds rediscovered Asia in 2010, and invested heavily in Europe.
MENA to Russia & Central Asia5 deals, $1 bn
MENA to Europe
MENA to Asia Pacific
MENA to North America6 deals $1bn
MENA to Europe14 deals, $7.5bn
Pacific17 deals, $13.5bn
Within MENA25 deals, $1.7bn
6 deals, $1bn
MENA to Latin
MENA t S b
America1 deals, $2.7bn
MENA to Sub-Saharan Africa3 deals, $0.3bn
10ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Investment Flows: Asia-Pacific SWF investments in 2010
By contrast, Asian SWFs sought out investments in North America, as well as looking to Asia.
Asia Pacific to Russia & Central Asia8 deals, $0.7bnAsia Pacific to Europe
11 deals, $1.7bn
Within Asia Pacific51 deals, $11.5bn
Asia Pacific to North America23 deals $8 6bn
11 deals, $1.7bn
51 deals, $11.5bn23 deals, $8.6bn
Asia Pacific to Sub-
Asia Pacific to Latin America3 deals, $0.6bn
Saharan Africa2 deals, $0.1bn
11ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Biggest spending funds of 2010
100% 52.7
QIA and CIC accounted for over 40 percent of our SWFs’ annual direct investment expenditure
23%75%
8%
Mubadala Development CompanyChina Investment Corporation
OtherQatar Investment Authority
75%
19%
National Social Security FundKuwait Investment AuthorityKhazanah Nasional BhdInternational Petroleum Investment CompanyTemasek Holdings
15%
50%
10%
Libyan Investment AuthorityGovernment of Singapore Investment CorporationNational Social Security Fund
4%5%5%
25%5%
Other: Future Fund; National Pension Reserve Fund; Government Pension Fund-Global; Abu Dhabi Investment Authority; Korea Investment Corporation; New Zealand Superannuation Fund; Abu Dhabi Investment Council; State Oil Fund of the Republic of Azerbaijan; State General Reserve Fund; Oman Investment
0%
2010
3%2%
12ZAD-EDP-SWFs 2011-May 2011-VCB Copyright © 2011 Monitor Company Group, L.P. — Confidential
Zealand Superannuation Fund; Abu Dhabi Investment Council; State Oil Fund of the Republic of Azerbaijan; State General Reserve Fund; Oman Investment Fund; and Istithmar World PJSC.Note: Publicly available data for direct SWF equity & real estate deals, joint ventures and capital injectionsSource: Monitor-FEEM SWF Transaction Database