Complete Property Market Updates of Singapore

April 23, 2008

NUS: No conflict of interest in property deal

Filed under: General — Propertymarketupdates @ 4:04 am

WE REFER to the letter, ‘Should NUS be involved in properties?’ by Ms Jennifer Teo Hwee Ling (March 26).

The management of the National University of Singapore Endowment Fund (NUS Fund) is governed by an endowment investment policy that is laid down by the Investment Committee (IVC) of the university’s Board of Trustees. The investment policy is to preserve and enhance the NUS Fund’s real (that is, inflation-adjusted) purchasing power and to provide for the long-term priority needs of the university. This is done through a diversified investment programme, which is in line with the best practices adopted by endowments of leading universities around the world. Property and property-related investments have formed part of this portfolio since 2001.

Of the 607 units in Gillman Heights, the university owns 303 units. Although the university had been approached on a number of occasions by some of the owners of the other units to consider selling en bloc, the university did not do so. It was only after the majority of the owners of the other 304 units had voted in favour of the collective sale in 2006 that the university decided to go with the majority decision. The collective sale agreement was signed on June 23, 2006.

To maintain impartiality, the university decided not to be represented in the collective sales committee. The Sale and Purchase Agreement for the collective sale to Ankerite was signed on Feb 5 last year.

The decision to invest in Ankerite was made in May last year following a careful deliberation by the IVC and is in line with our investment policy. The other shareholders in Ankerite are reputable property developers and a private fund.

The possibility of a potential conflict of interest was also considered before the university acquired its 15-per-cent stake in Ankerite. The university was satisfied that its investment in Ankerite does not give rise to a conflict of interest for a number of reasons. The agreement for the collective sale was concluded before the opportunity to invest in Ankerite arose. The university was already committed to supporting the sale of its units pursuant to the agreement negotiated by the collective sales committee, which did not include university representatives. The financial interests of the university are aligned with those of the Gillman Heights owners who signed the agreement and were seeking the best sale price for their units.

We thank Ms Teo for sharing her concerns and for giving us an opportunity to clarify this matter.

Nicholas Kong
Chief Investment Officer
National University of Singapore
 
Source : Straits Times – 2 Apr 2008

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