Dollars

January 2011


January 25, 2011 7:46 AM PST

Amazon Web Services is taking aim at the business world with e-mail.


The new Simple Email Service integrates with the company’s existing Amazon Web Services tools and is designed to make it easier for companies to manage e-mail in their operations.

The focus of Simple Email Service is “marketing and transactional messages,” Amazon said today. The platform scans outgoing messages to ensure they meet ISP standards and won’t get caught up in a recipient’s spam folder. The service also boasts a notification system that alerts customers to “bounce backs, failed and successful delivery attempts, and spam complaints,” the company said.

Users of Simple Email Service will receive their first gigabyte of data for free. In addition, those who use Amazon’s EC2 cloud service or its AWS Elastic Beanstalk application-management service are allowed to send 2,000 e-mail messages for free each day. After that, Amazon charges 10 cents per thousand e-mail messages. The company will also charge customers 10 cents per gigabyte of data that’s transferred in through the e-mail platform. Pricing on data that’s transferred out through the e-mail ranges from 8 cents to 15 cents per gigabyte, depending on the amount of data used each month.

Amazon Simple Email Service is currently in beta. However, the company is allowing customers to sign up now
Sourced & published by Henry Sapiecha

Yahoo warns of weak 1st quarter

more cost cuts planned

A Yahoo billboard is seen in New York's Times Square October 19, 2010. REUTERS/Brendan McDermid

By Alexei Oreskovic

SAN FRANCISCO | Tue Jan 25, 2011 5:29pm EST

(Reuters) – Yahoo Inc warned revenue will again slide this quarter as traffic to the Internet portal drifts elsewhere and the company begins sharing search revenue with Microsoft Corp followed that with a declaration it is preparing its biggest year of hiring ever in 2011.

Yahoo has struggled to contain costs and jumpstart revenue growth while bleeding traffic to competitors such as Google and Facebook. It now ties up with Microsoft on search, hoping to keep a lid on expenses.

The company reported its third consecutive quarter of declining page views on its websites two years into the tenure of CEO Carol Bartz, who took over to try to revive its fortunes.

In October, Yahoo began outsourcing its search advertising service in the United States and Canada to Microsoft, in keeping with the 10-year search partnership the two sealed in 2009. Under the terms of the deal, Yahoo will share 12 percent of its search advertising revenue with Microsoft.

But Chief Financial Officer Tim Morse said Facebook competition was not hurting Yahoo’s display advertising business.

“All impressions aren’t created equal. With the big customers and branded advertisers, and the premium dollars being spent, we really aren’t seeing that kind of competition,” he said in an interview with Reuters.

MORE COSTS TARGETED

Morse told Reuters after Tuesday’s financial results were released that there were still more costs to come out of Yahoo in coming years.

Asked if that meant additional layoffs, Morse said: “Over the next few years, there will definitely be some more people who leave, there will be more people who are hired.”

Net revenue, which excludes revenue shared with website partners, totaled $1.2 billion in the three months ended December 31, compared with $1.26 billion in the year ago period. Analysts polled by Thomson Reuters I/B/E/S were looking for $1.19 billion in net revenue.

And it projected that net revenue in the first quarter will range between $1.02 billion and $1.08 billion, compared with the $1.13 billion expected by analysts.

Its fourth-quarter earnings also lagged targets.

Yahoo said its net income in the fourth quarter was $312 million, or 24 cents a share, compared with $153 million, or 11 cents a share in the year ago period. Analysts polled by Thomson Reuters I/B/E/S were looking for 22 cents a share.

Yahoo shares were down at $15.53 in extended trading after closing out the regular session at $16.02.

Sourcd & published by Henry Sapiecha

Apple’s iGod is no messiah

January 25, 2011 – 11:57AM
Steve Jobs is a revered figure among his own company. But is this really a healthy thing?
Steve Jobs is a revered figure among his own company. But is this really a healthy thing?

The cult of the chief executive facilitates their money-grab, writes Aditya Chakrabortty.

What happened the last time you called into work sick? A sympathetic sentence from a colleague, possibly. Some quality time alone with the television, certainly. In due course came re-entry, with the brackish waters of the office closing overhead as swiftly as if you’d never left.

When Steve Jobs announced last week that he would be spending some time away from Apple, he promptly knocked $20 billion off the value of his employer. News of his sick leave made front pages and even had Wall Street analysts bemoaning the loss of a “genius”.

Jobs has always been the best repackager in the technology industry. Over the past decade, he’s alchemised the plain old MP3 player into the iPod, turned the corporate road warrior’s mobile-email-browser-whatever into the iPhone and transformed the ugly tablet PC into the iPad.

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And last week, even as he took medical leave, the Apple boss did it again, setting the seal on the transformation of the chief executive into the figurehead of his own corporate cult.

The man business hacks call iGod has been playing this game for decades. Down the years photos show him in that unchanging Boomer outfit of black mock turtlenecks and stonewashed denim – instant recognisability in an anonymous industry.

Then there are his gnomic utterances and the annual religious convention, the Macworld Expo in San Francisco, where Jobs regularly turns up to lay hands on his devotees. This is free advertising for a company that needs to flog its products by the millions, of course – but the cult also numbers Apple’s own staffers. “It’s Beatlemania,” one former executive told the New Yorker in 1997 just as Jobs turned up on the company’s Cupertino campus again, after 12 years away. The saviour was back.

True, before Jobs rejoined the fold, the question most commonly asked about the company he co-founded was how long it had left before making the corporate obituaries. Yet that doesn’t make its turnaround solely the work of one heavily-stubbled mastermind, who saved a company through his singular vision, taste and liberal use of the i- prefix.

The messiah talk ignores the fact that Apple has around 46,600 full-time employees and another 3000 temporary staff – including some of the best designers and marketers in the business.

Far from being a semi-mystical software visionary, Jobs is a ruthless office politician (during his long campaign to take back his company, reported the New Yorker in that 1997 article, one Apple alumnus warned: “Steve is going to f..k Gil [Amelio, the former CEO] so hard his eardrums will pop.”)

Nor does it take into account the way in which global supply chains minimise the role of any one individual, no matter how powerful. Take, for instance, the iPad: the display panel is probably from a Korean contractor, the backlight will have been knocked up by a Taiwanese firm and the GPS is likely to have been made in Germany. Then there is the battery (Chinese, perhaps), the flash memory (which could well be from Japan’s Toshiba) and the case (Taiwan, again).

Jobs is part of a widespread trend among chief executives to put themselves forward not as managers, but as leaders. Follow the coverage of the Davos summit this week and count the number of times a corporate finance officer for some accounting-software company or other is described as a business leader. Elite MBA programmes boast of how they will turn students into “change agents”.

As I type, the January 2007 cover of Harvard Business Review stares back at me. “The Tests of a Leader”, it blares, under a photo of some shirt-sleeved young Turk doing push-ups on a boardroom table.

“Managers do things right, leaders see the right thing is done,” said Warren Bennis, founding father of Leadership studies. The implication was clear: a manager was good at painting by numbers, but a business leader was more akin to Turner.

The result has been a tremendous boost in chief-executive power, according to Dennis Tourish, an academic at Kent University in south-east England. He points out that just before Enron imploded it was run like a cult, with Jeff Skilling exercising huge control and influence over who was recruited, how they worked – and who got laid off. And while Enron was an exception, Tourish points out that Jack Welch as boss of General Electric had similar power.

“Business leaders typically only have yes-men – no one to stand up to them.”

In the end what the leadership talk appears to add up to is an alibi for bosses taking much more money out of the companies they run. There is John Thain who, even as he ran Merrill Lynch into the wall, demanded it pay $US1.2 million to redecorate his office, including $35,000 for a “commode on legs”.

Then there is Mark Hurd, who ruled Hewlett-Packard with the iron law of pay for performance – until he was himself drummed out of office last August for alleged corporate malfeasance and took a severance package of $34.6 million. And in Britain, there is BP’s Tony Hayward receiving millions for his role in turning the Gulf oil spill from a tragedy into a farce.

Set against that lot, Jobs looks like an exemplar. But he is really the best example of an unhealthy trend.

Guardian News & Media

Sourced & published by Henry Sapiecha


Margin squeeze in market

hurts Dick Smith

Michael Evans
January 25, 2011

WHEN your business is turning over $1 billion a week, a few issues in a small part of your portfolio exposed to discretionary spending is a nice problem to have.

With his supermarket and liquor businesses motoring on in a cosy duopoly, the boss of Woolies, Michael Luscombe, went out of his way yesterday to point out the electronics industry has bigger problems than those being emphasised by Gerry Harveys’ situation.

The Harvey Norman boss may argue the lack of a GST on online goods makes for an unfair playing field. But Mr Luscombe, who counts Dick Smith in the Woolies portfolio, pointed out that the hotly contested consumer electronics industry has a big problem with profit margins.

What is more, he underlined the threat to bricks and mortar retailers in the industry, saying the economics of selling goods online makes good sense.

Dick Smith, the one-time wunderkind of the Woolies empire, was the focal point of investor concern yesterday, reporting a rise in sales turnover but a fall in margins from heavy discounting that is eating away at the profits.

The high Aussie is making goods cheaper and combining with tough competition to hit margins. ”The Australian dollar means everything’s cheaper to buy,” Mr Luscombe said.

”There is intense competition to sell those products in the Australian market place and that has driven prices down even further and it’s just meant that the profit that you made out of selling a TV is less than you made even last year.

”The selling price is down by around 30 per cent. More and more they are only sold on special. There’s no doubt we are all finding it difficult to get that growth margin.”

Dick Smith is steadily building an online sales portal, he said, because ”that’s where people want to shop”.

Sales are up 75 per cent for the half, he said. And the economics are better. ”You don’t have to carry the stock. To sell one TV online you need one TV in stock but to sell one in 400 stores you need 400. So the mathematics of the working capital are far better. It’s the way that a lot of people want to shop.

”No doubt when the Aussie dollar returns to [the] historical level with the US dollar it will become less attractive to do it overseas.”

Mr Luscombe’s other discretionary business, Big W, faces a similar story from price deflation. ”We’re not getting the dollars out of [customers]. We are selling things much cheaper than last year, 6 or 7 per cent.”

Sourced & published by Henry Sapiecha

Billionaires say ‘I do’ to dating agency

A. Craig Copetas

January 20, 2011

PARIS: Billionaires need love, too. Inside a very elegant townhouse in Berkeley Square, London, eight executive matchmakers have spent the past 23 years quietly making a fortune coupling romance-starved millionaires and billionaires.

For fees that start at £10,000 ($16,000) and go to many times that, Virginia Sweetingham and her luxury love advisers at Gray & Farrar International will vet suitable partners for clients prepared to abandon the raunchier applications of money and love.

”There are a lot of wealthy single people out there ready to commit, looking for loyalty,” Ms Sweetingham, 53, says of her client base of 750 men and 750 women.

The median age is about 40 years old. The firm’s youngest client is an ”ambitious and focused” 22-year-old man, the oldest a gent ”over 70 with a great sense of intelligent humour”.

Even a private-banking house, Coutts & Co, hails Ms Sweetingham’s service as a splendid way ”to find love”, according to the British bank’s website.

”The pressure of work is the top barrier for them in finding a partner,” says Ms Sweetingham, a single mother of four, in her firm’s homey interview salon.

”Our clients want to meet new people, enter new social circles in a dignified way.”

The client requests are often daunting. ”We have one male client who has a particular look in mind, right down to the precise length of her cheekbones,” Ms Sweetingham says. ”That’s a specific brief that requires our bespoke service. Some of the tools we employ are the world’s lists of the most beautiful and available men and women.”

A computerised client database is forbidden for security reasons. Almost everything is done by hand.

”The men get blue folders, the women pink,” says Ms Sweetingham. As for the annual fee, Ms Sweetingham says ”the price is indicative of our clients’ commitment to find the right person and settle into a relationship; they’re individuals who wouldn’t think twice about paying even more to an executive headhunter to locate the right job candidate.”

Ms Sweetingham’s statistics over the past decade show a 20 per cent drop in divorced clients. ”Fewer than 40 per cent of our clients are divorced and the number continues to decline,” Ms Sweetingham says.

”The majority of our new clients have always been single and that’s a significant global generational statement.”

Bloomberg

Sourced & published by Henry Sapiecha


Google to give outgoing

CEO Schmidt $100 million

January 24, 2011 – 8:29AM
Google chief executive, Eric Schmidt.Google chief executive, Eric Schmidt. Photo: Reuters

Google is set to give Eric Schmidt a $US100 million ($101.1m) equity award handshake as he hands over the chief executive officer job to co-founder Larry Page.

The award, which will include stock units and options will vest over four years and is Schmidt’s first such award since joining the company in 2001, a spokesperson said.

News of Schmidt’s equity award was first reported by Bloomberg.

In a surprise announcement last week, Google said Schmidt will take on the role of executive chairman in April and will be replaced as CEO by Google co-founder Larry Page.

The news came on the same day that Google reported earnings and revenue that blew past expectations.

But while Google has dominated internet search, it has struggled with social networking and is facing stiff competition from companies like Facebook and Twitter, which are stealing web traffic and engineering talent.

Schmidt said in an interview with Reuters that his move was not a reaction to competitors but an effort to speed up decision-making at the Internet giant.

Schmidt sells shares

In a regulatory filing last week, Google said that Schmidt in December drew up a plan to sell some of his stock in the company.

“The pre-arranged trading plan was adopted in order to allow Eric to sell a portion of his Google stock as part of his long-term strategy for individual asset diversification and liquidity,” the filing said.

As of December 31, Schmidt had about 9.2 million shares of Google stock and controlled 9.6 per cent of the company’s voting power. Schmidt plans to sell about 534,000 shares of Class A common stock – meaning he would continue to hold 8.7 million shares of Google stock and control 9.1 per cent of the company’s voting power.

Sourced & published by Henry Sapiecha

Internet Armageddon

is all my fault:

Google chief says….

Asher Moses and Ben Grubb

January 21, 2011 – 4:55PM

Wow, what a title...Google's vice-president and chief internet evangelist Vinton Cerf.
Google’s vice-president and chief internet evangelist Vint Cerf.

The “father of the internet” says the world is going to run out of internet addresses “within weeks” – and it will be all his fault.

Google’s chief internet evangelist, Vint Cerf, who created the web protocol, IPv4, that connects computers globally, said he had no idea that his “experiment” in 1977 “wouldn’t end”.

“I thought it was an experiment and I thought that 4.3 billion [addresses] would be enough to do an experiment,” he said in group interview with Fairfax journalists.

The protocol underpinning the net, known as IPv4, provides only about 4 billion IP addresses – not website domain names, but the unique sequence of numbers assigned to each computer, website or other internet-connected device.

The explosion in the number of people, devices and web services on the internet means there are only a few million left.

The allocation of those addresses is set to run out very shortly but the industry is moving towards a new version, called IPv6, which will offer trillions of addresses for every person on the planet.

“Who the hell knew how much address space we needed?” Cerf said.

“It doesn’t mean the network stops, it just means you can’t build it very well.”

Google’s leadership shake-up

Cerf said Google’s surprise leadership shake-up was essential because the search giant was beginning to move too slowly.

Today the company announced that Google co-founder Larry Page would take over as chief executive from Eric Schmidt, who has become its executive chairman. Until this point Page and co-founder Sergey Brin ran the company with Schmidt as a “troika”.

“‘As we got larger it was harder for us to move as quickly as we would like so I think this is part of the whole practice of speeding up decision processes,” he said.

“Quick rapid execution is absolutely essential, especially in a highly competitive world like this.”

Recent ex-Googlers who left the company to join Facebook, including former Google Australia engineer Lars Rasmussen, have said Google has become too unwieldy as it has grown.

Schmidt gave similar comments in a blog post today, saying that, as Google had grown, managing the business had become “more complicated” and the trio had been “talking for a long time about how best to simplify our management structure and speed up the decision making process”.

Cerf said Schmidt, 55, had been chief executive for 10 years – “a nice round number” – and Page, now 37, was ready to lead the company well into the future.

“Larry and Sergey are 10 years older than they were when they thoughtfully hired Eric to be the CEO … so everybody’s growing up,” Cerf said.

“He was the only guy that stood up to them – these were two young, smart, incredibly brilliant guys who literally had just dropped their PhDs to go start this company.”

It has long been held that Schmidt was brought on at Google to counter the lack of business experience of Google’s founders, and Schmidt alluded to this in a tweet today.

“Day-to-day adult supervision no longer need!” he wrote after the leadership change announcement.

Taking on Facebook

Cerf would not be drawn on whether Google was developing a social networking site to compete with Facebook, as has been rumoured. But he said “our interest is less in the social networking aspect as it is in the patterns of behaviour”.

“We really don’t care about you personally we care about the patterns that you make. If we can match the patterns that you make with the patterns that the advertisers are trying to get in front of you, you benefit as well as the advertisers,” he said.

“This is quite independent of the sort of things that go on in Facebook, which is more about personal information and personal interactions.”

Praising the NBN

Cerf heaped praise on the National Broadband Network, saying Australia was making a long-term investment that would “serve you incredibly well in ways that even I can’t figure out”.

“The idea of being able to export your talents without having to export your people … this is a very attractive proposition,” he said.

“I honestly envy the political will to make this kind of long-term investment.”

Google as ISP?

But despite Google’s work in building municipal Wi-Fi and experimental fibre broadband networks in the US, he said it was unlikely Google would ever become an ISP.

“The intent is that as we build these [networks] out we will then turn them over to some other parties to operate and to make openly accessible,” he said.

“This is not our business model. Our purpose was to document what the costs and problems are … we’re not in the business of building physical infrastructure except for our internal operation.”

Asked whether recent privacy breaches at Sydney University and Vodafone – both of which kept detailed customer records online – highlighted the pitfalls of moving toward hosting everything in the online “cloud”, Cerf said the cloud was not at fault.

“Just because it’s sitting in an enterprise server doesn’t mean that you’re any better protected than you would be in the cloud,” he said.

“When you’re in the cloud business you better be good at protecting and securing your systems otherwise you lose all your customers.”

Sourced & published  by Henry Sapiecha

Google names Larry Page

new CEO in shake-up

as it announces

its fourth-quarter earnings

January 21, 2011 – 8:56AM

Google co-founder Larry Page is taking over as CEO in an unexpected shake-up that upstaged the internet search leader’s fourth-quarter earnings.

Page, 37, is reclaiming the top job from Eric Schmidt, who had been brought in as CEO a decade ago because Google’s investors believed the company needed a more mature leader.

Schmidt, 55, will remain an adviser to Page and Google’s other co-founder, Sergey Brin, as Google’s executive chairman.

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Google co-founder and now CEO, Larry Page, talks to reporters as former Google CEO Eric Schmidt (right) watches at the Sun Valley Inn in Sun Valley, Idaho in this July 9, 2009 file photo.Google co-founder and now CEO, Larry Page, talks to reporters as former Google CEO Eric Schmidt (right) watches at the Sun Valley Inn in Sun Valley, Idaho in this July 9, 2009 file photo. Photo: Reuters

The changes will be effective April 4.

“In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey for a long time to come,” Schmidt said.

Page praised Schmidt, too. “There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly,” Page said.

“Eric is a tremendous leader and I have learned innumerable lessons from him”

The change in command overshadowed Google’s fourth-quarter earnings, which soared past analysts’ estimates as the company cranked up its internet marketing machine during the holiday shopping season.

Net income rose 29 per cent to $US2.54 billion, or $US7.81 a share, from $US1.97 billion, or $US6.13, a year earlier, Google said on its website. Profit excluding some items was $US8.75 a share, exceeding the $US8.08 average of estimates compiled by Bloomberg.

Google benefited from its core search-engine business as advertisers stepped up efforts to reach consumers through the internet. Spending on search-based ads rose 23 per cent in the US during the quarter, with gains in retail and travel, according to Efficient Frontier, which manages more than $US1 billion annually in online advertising.

“The media buyers are more positive on the economy moving forward – and they want to participate,” said Mike Hickey, an analyst at Janco Partners in Greenwood Village, Colorado. He recommends buying the stock and doesn’t own it. “The dollars are going to the internet.”

Sales, excluding revenue passed on to partner sites, were $US6.37 billion, topping the $US6.06 billion average of estimates.

Android growth

Google, which gets most of its revenue by selling ads in its search business, is also gaining ground in the mobile-device market with its Android smartphone software.

Android topped Apple’s iPhone in US smartphone subscribers for the first time in November, accounting for 26 per cent of the market, compared with 25 per cent for Apple, according to ComScore BlackBerry maker Research In Motion had the top spot with 33.5 per cent.

While Google doesn’t charge for Android, it’s helping the company expand mobile-advertising sales. Google was projected to grab 59 per cent of the US mobile-ad market last year, according to research firm IDC. Google benefitted from its May 2010 acquisition of AdMob, which had 8.4 per cent of the market in 2009.

In October the company said it expects to exceed $US1 billion in annual mobile-ad sales and $US2.5 billion in display-ad revenue. The company noted there could be overlap between the businesses’ sales.

Google is maintaining its leadership in the search-engine business even as it faces a stronger challenge from rivals Yahoo! and Microsoft. In August, Yahoo! began using Microsoft’s Bing technology to provide online search results.

Google grabbed 66.6 per cent of searches in the US in December, up from 66.2 per cent in the previous month. Combined, Microsoft and Yahoo had 28 per cent, down from 28.2 per cent, according to ComScore.

Sourced & published by Henry Sapiecha


Cadadas pension funds splurge

$12bn on real estate in Australia

CANADA’S biggest pension fund has made investments worth about $6.7 billion in Australia in the past 1.5years.

The $137bn Canadian Pension Plan Investment Board is also committed to investing another $900 million with Goodman Group, including $595m for its share in the proposed takeover of the ING Industrial Fund (IIF) in a Goodman-led consortium.

It is the largest investor in Australia among global pensions, which have collectively put more than $12bn in Australian companies or assets in recent months.

Commenting on the IIF deal, Graeme Eadie, CPPIB senior vice-president, real estate investment, said the transaction was an opportunity to invest in a high-quality industrial property portfolio.

“It represents our largest real estate investment in Australia,” Mr Eadie said.

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This deal came within four weeks of CPPIB buying a 25 per cent stake in Westfield Stratford City for $700m. This is its second investment with the Australian shopping centre giant Westfield Group.

Its largest deal in Australia to date is toll road company Intoll, which it took over and delisted last month after shareholders approved its $3.5bn offer.

Intoll, the former Macquarie Infrastructure Group, was the second former Macquarie vehicle that CPPIB had acquired.

Its first acquisition was the former Macquarie Communications Infrastructure Group, for which it paid $2.2bn.

CPPIB, based in Toronto, is a professional investment management organisation that invests the funds not needed to pay current benefits. It has also invested with groups such as Dexus Property Group and Macquarie Global Property Advisers, a private equity group, and Colonial First State Global Asset Management.

It is thought to be close to acquiring an office tower in Lend Lease’s Barangaroo project, on Sydney’s waterfront.

CPPIB regularly co-invests with The Netherlands’ APG (Algemene Pensioen Groep, or “all pensions group”) such as in the Goodman consortium in which APG has a 25.2 per cent stake.

APG is also a 25 per cent owner of Westfield Stratford City in Britain and also has a third interest in the Westfield UK Shopping Centre Fund. One of APG’s first investments in Australia is a 40 per cent stake in a Valad fund, which owns Goldfields House, in addition to also owning an undisclosed stake in the unlisted Valad Core Plus Fund.

APG also has an investment in an unlisted GPT fund.

While APG declines to comment on specific investments, its head of strategic real estate in Asia, Daan van Aert, said Australia was an attractive area for real estate primarily due to the stable economic growth, strong regulatory framework and because it is a transparent market. “We are at our target exposure for Australia,” Mr van Aert said. “As such, we are currently more focused on asset management and recapitalisations of our existing portfolio.”

He said APG’s strategy was to set up local partnerships with the strongest real estate managers in the world, such as Westfield and Goodman Group from Australia.

Another Dutch pension fund, PGGM, last month invested $262m in the new Lend Lease Social Infrastructure Fund in Britain. PGGM holds $1bn in Westfield notes, secured on six shopping centres.

Global pension funds including those from Malaysia, Korea, Canada and Sweden have recently stepped up investment as they seek out countries with solid economic growth to invest in search of a stable future income stream.

While some chose to partner with the likes of Goodman Group, Colonial First State Global Asset Management, Westfield, Lend Lease or GPT Group, others opt for direct investment.

Korea’s National Pension Scheme, Malaysia’s Permodolan Nasional, Switzerland’s Swiss pension group AFIAA and Germany’s Deka Immobilien have all bought Australian office blocks.

Additionally, an unknown number of pension funds invest through global fund managers, like the Chicago-based LaSalle Investment Management; the Hong Kong-based CLSA Capital Partners; CBRE Investors; or Sweden’s SEB Asset Management.

As members’ contributions pile up around the world — just as in Australia — international property consultant DTZ recently estimated that $US281bn of new capital would be available for investments this year, up 22 per cent from a year ago.

China, Australia and India would attract about 15 per cent of that capital, said a recent DTZ report.

Jonathan Thompson, KPMG’s head of global real estate, who was in Sydney recently, said more pension funds would start to put their money in real estate. For instance, he said Norway changed its laws in March last year to allow the Norwegian Government Pension Fund, which manages $US520bn, to invest in real estate.

Alistair Meadows, regional director of international capital group Jones Lang LaSalle, said the next wave of investment would come from Asian pension funds.

By 2020, he said Asian pension funds were expected to have assets totalling $4.3 trillion.

Since 2009, South Korea’s National Pension Scheme, which invests the pension contributions of about 18 million people, had acquired $3.6bn of prime real estate in London; Tokyo, Berlin and Sydney, he said.

In Australia, NPS bought Aurora Place, a blue-chip CBD tower, for $635m.

On his recent visit to Seoul, Mr Meadows met several second-tier Korean pension funds — the equivalent to industry funds in Australia — that were keen to follow NPS’s footsteps overseas.

“We believe that most pension funds are underweight to real estate, especially in Japan and Korea,” Mr Meadows said.

“In 2011, we expect to see them in Australia looking for direct acquisitions; co-investment with an Australian partner or indirectly through unlisted Australian property funds.”

While the established pension funds will have between 5 per cent and 10 per cent of their investment in property, Mr Meadows said most Asian pension funds had no allocation or less than 5 per cent of their assets in property.

DTZ associate director Aurelo Dinapoli said pension funds were keen to deploy their capital in key Australian cities — Sydney and Melbourne.

“We represented Chinese pension funds looking for Australian assets,” Mr Dinapoli said.

“Money is not an issue for this group. They have  lots of money to invest.”

He said that typically a pension fund looked to invest between $200m and $300m on its first investment in Australia.

Rick Butler, senior managing director of CB Richard Ellis, has facilitated several sales, including most recently the $113m purchase of 737 Bourke Street by Malaysian pension group KWAP.

Mr Butler said these buyers were interested in direct assets or in “club” deals with small numbers of like-minded investors.

Some consultants believe that the high Australian dollar may reduce the flow into Australia.

APG’s Mr van Aert said: “The general policy is hedging currency exposures, and as such the hedging cost is factored into our investment returns and decisions.”

Sourced & published by Henry Sapiecha

Assange in crosshairs of Congress

Ewen MacAskill

January 5, 2011

Julian Assange ... in southern England last month.
Julian Assange … in southern England last month. Photo: Reuters

The Republican Party in the USA is planning a congressional inquiry into WikiLeaks and its founder, Julian Assange.

The party, which was due to wrest control of the house today, has included WikiLeaks in a list of high priorities for investigation.

The move is partly political, aimed at the Attorney-General, Eric Holder, who the Republicans claim has been too slow and too lethargic in reacting to the leaks. Last month he said the Justice Department was looking at what action could be taken against Mr Assange but that lawyers were struggling to find applicable legislation under which the Australian national could be prosecuted.

Darrell Issa, who will take over as chairman of the House of Representatives oversight committee and is calling for Mr Holder’s resignation, said of Mr Assange in an interview on Sunday: ”If the President says, ‘I can’t deal with this guy as a terrorist,’ then he has to be able to deal with him as a criminal. Otherwise the world is laughing at this ineffective paper tiger we’ve become.”

On Monday the Politico website published areas Mr Issa’s committee intends to investigate, including WikiLeaks.

The committee, whose remit covers fraud and waste, can subpoena witnesses from the highest reaches of political life. Hearings could begin in the next few weeks.

Mr Issa said his committee would investigate WikiLeaks ”so the diplomats can do their job with confidence and people can talk to & interact with our government in confidence”.

The new Congress would have to introduve legislature to try to prevent similar acts of whistleblowing.

Sourced & published by Henry Sapiecha

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