|
|
|
Temasek
and GIC eye Australia
Florence
Chong
The Australian
18 Feb
08
http://www.news.com.au/business/story/0,23636,23231373-462,00.html
Australia
has attracted sizeable investments from some of the world's
biggest and most established sovereign wealth funds.
The
most active are arguably the Singapore twins - Temasek and the
Government of Investment Corporation - both of which have long
been players in key sectors of the Australian economy.
Neither
Temasek nor GIC publish the value of assets by locations, but
collectively they easily own more than $20 billion of holdings in
Australia.
Combined, the two Singapore investors
represent the world's second-largest sovereign wealth fund, with
assets totalling $US489 billion ($539 billion), according to
Morgan Stanley.
But in coming years, the Singapore
investors may be overshadowed by the new "financial
superpower" - China Investment Corporation, China's
sovereign wealth fund formally launched last year.
CIC
currently has assets of $US200 billion, but will ultimately be
responsible for managing China's $US1.5 trillion foreign
reserves.
Since the late 1990s, Australia is said to be
one of several key countries targeted for Chinese investment -
mainly to secure long-term supply of raw commodities.
CITIC
(the former China International Trust and Investment Company)
became the first of the cashed-up Chinese state-owned enterprises
to invest when it took a 10 per cent stake in Portland Aluminium
Smelter in Victoria in 1987.
Since then, Chinese
government-backed enterprises have invested in a diverse range of
sectors, from cotton fields to infrastructure and iron ore and
coal mines.
In the past 12 months alone, the FIRB has
approved Chinese investments totalling almost $5 billion in
Australian companies.
Two existing Chinese investors,
Anshan Iron & Steel and Shougang Steel, have pledged to
co-invest in expanding infrastructure and mines, totalling almost
$4 billion, in their respective investments.
Wealth funds
have come into their own in the past two years, and especially in
the past few months, when they rode to the rescue of the world's
largest financial institutions, crippled by the fallout from the
US sub-prime mortgage crisis.
So far, the SWFs, including
Temasek, have injected $US69 billion into the likes of Merrill
Lynch, Citigroup and UBS.
Morgan Stanley economist
Stephen Jen, who monitors 29 SWFs worth $US2.9 trillion, says
over the next five years funds under management may grow by about
$US1 trillion annually. He estimates that SWFs will have some
$US12trillion under their control by 2015.
Temasek's
landmark investment in Australia is through its subsidiary
Singapore Telecom (SingTel), which paid $14 billion in 2001 for
Optus, then owned by Cable & Wireless.
Last July,
another Temasek subsidiary, CitySpring, bought underwater
electricity cables BassLink for $1.2 billion.
CapitaLand,
also associated with Temasek, which owns 55 per cent of the
listed property company AustraLand, is said to be looking over
the portfolio of shopping centres owned by the troubled listed
trust, Centro.
Since 1996, the real estate arm of GIC,
known as GIC RE, has spent almost $3 billion building a portfolio
of prime Australian assets located mostly in Sydney and
Melbourne.
Last year, GIC RE joined a consortium that
paid $600 million for the Melbourne Myer store, earmarked for
redevelopment, costing $1.2 billion. It also acquired a half
share in Westfield Parramatta for $717.5 million.
Childcare
company ABC Learning was Temasek's first direct investment in
Australia, for which it paid $401 million for a 12 per cent stake
last year.
|
|
