According to a Bloomberg report out this morning by Janet Ong, Taiwan’s Finance Ministry is studying the possibility of setting up a new SWF akin to Singapore’s Temasek. And while it’s still early days, the Straits Times is already reporting some specifics:
“The planned unit will be in charge of the government’s direct or indirect investments in a total of 419 companies…The purpose will be to more efficiently manage the government’s resources.”
Interestingly, it appears this fund will not be financed out of foreign exchange reserves (though the Bloomberg and MarketWatch accounts do contradict one another on this point). Rather, the underlying capital will come from existing state assets. The objective will be to transform these assets and render them more efficient to boost returns.
In a way, then, the announcement of this fund seems to parallel with the recent announcement of Guoxin Asset Management – also known to some as CIC 2.0 – in China, which will consolidate the country’s SOEs in a bid to make them profitable.
Anyway, a group of experts have been tasked with drawing up a proposal that will be submitted and considered by year end. Until then…