GIC Opens Brazil Office

(April 1, 2014) — GIC, one of Singapore’s sovereign wealth funds, has opened an office in São Paulo, Brazil.

The new location is its 10^th regional office, and will be headed by Dr Wolfgang Schwerdtle.

In a statement, GIC said the new opening reflected its commitment to Latin America. In particular, the sovereign wealth fund was interested in opportunities in real estate, healthcare, financial and business services, natural resources, and infrastructure.

“Our presence in Brazil will enable our partners to engage early and interact closely with the GIC team, which is very beneficial for complex and sizeable investments,” said GIC Group Chief Investment Officer, Lim Chow Kiat.

“We believe our partners will gain from having access to GIC’s global network of business contacts and market insights. Although emerging markets remain volatile, we are confident of the long-term Latin America growth story.”

Group President Lim Siong Guan added: “GIC’s presence in Brazil is another step in our strategy to be present in key financial capitals around the world. Local partners and insights add to our global understanding of value investment opportunities.

“To stay ahead in an increasingly competitive landscape, we will continue to leverage our ability to invest on a multi-asset class basis, respond quickly to investment opportunities both large and small, and adopt a long-term view in our investment commitments.”

Investors establishing regional bases was highlighted in the February edition of aiCIO. The Canada Pension Plan Investment Board, which already had offices in Hong Kong and London, opened its São Paulo office in February, and the Alberta Investment Management Corporation revealed it had opened a London office at the beginning of the year. Dutch investment giant APG also has offices in New York and Hong Kong.

Not all of the world’s largest investors are jumping on the bandwagon however: the California Public Employees’ Retirement System and California State Teachers’ Retirement System (CalSTRS) have considered opening regional offices several times, but have ultimately been hamstrung by the bureaucracy of being a governmental fund.

Chris Ailman, CIO of CalSTRS, told aiCIO: “There’s just no way, given the governance structure. Virtually all of the large public funds in the US were set up in the 1970s as divisions of governmental agencies. Smart business decisions such as setting up global offices are common sense for a money manager, but nearly impossible for a governmental agency.

“If you look at us through the lens of a governmental entity and compare us with the department of licensing, our structure and operation look expensive. That’s because we are not a state entity in that way—we’re a money manager, a global money manager who has to compete with global entities. If you look at us through the lens of a Wall Street money management firm, you would be shocked the other way at how inexpensive and frugal we are.”

Separately, reports of GIC’s former CIO Ng Kok Song receiving seed money for his new hedge fund from the sovereign wealth fund have appeared in the press.

Song, who remains an advisor to the fund, is believed to be rolling out a macro hedge fund later this year. GIC’s press office could not be reached for confirmation at the time of writing.