Survey: Pensions and PE Have Misaligned Interests

A survey from IE Consulting shows a majority of pensions believe misalignment of interests with their private equity managers (GPs) had become more apparent during the crisis.

(May 18, 2010) — A new survey by IE Consulting shows a majority of pension funds believe misalignment of interests with their private equity managers (GPs) has become more blatant during the crisis.

While two-thirds of the schemes surveyed thought the crisis had caused fund managers to act at odds with limited partners’ interests, three-quarters of the pension funds felt their private equity managers had tried to blame the financial crisis for their own investment mistakes.

Additionally, 61% of respondents said they will or have already declined to invest in a new private equity fund vehicle launched by certain managers with whom they had previously invested, as a direct result of poor communication or lack of transparency during the crisis.

Looking ahead, respondents to the survey said the fundraising environment would become increasingly tough, when private equity managers (GPs) will face more difficulties raising a new fund in the next two years.

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To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

1Malaysia Development Bhd (1MDB) and Qatar Investment Authority (QIA) will pursue a partnership to capitalize on opportunities in the energy and real estate sectors in Malaysia's Klang Valley.

(May 17, 2010) — The Qatar Investment Authority (QIA), one of the largest sovereign wealth funds in the world with an estimated $60 billion or more in assets under management, plans to invest $5 billion in projects located in Malaysia.

Following Malaysia’s first recession in a decade, the country is looking to increase foreign investment. “Malaysia is an attractive investment destination with plenty of opportunities to consider and explore,” Qatar Prime Minister Sheikh Hamad Jassim, who is also chief executive officer of Qatar Investment Authority, said to Bloomberg.

A memorandum of understanding between the QIA and 1Malaysia Development Bhd (1MDB), a Kuala Lumpur-based wealth fund, to explore potential ventures, was signed Friday. The projects will include energy and real estate in Malaysia.

Meanwhile, in a reported $2.3 billion deal, the investment arm of Qatar’s sovereign wealth fund last week announced the purchase of London’s luxury department store Harrods from Mohamed al-Fayed, a 77-year-old Egyptian-born businessman. The deal represents the biggest deal in UK retailing since the 11.1 billion-pound takeover of Alliance Boots Plc in 2007, Bloomberg reported.

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QIA’s additional investments include some skyscrapers in London’s financial district, Canary Wharf, and stakes in British lender Barclays, supermarket chain J Sainsbury and the London Stock Exchange.

QIA, chaired by the country’s prime minister, was founded by the State of Qatar in 2005 to strengthen its economy by diversifying into new asset classes.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742