Taipei, March 11 (CNA) — The impact of exposure by Taiwan’s banks, insurance and securities firms to US-based financially troubled private equity firm Blackstone Group has been limited, with lending to and investments in the American company total NT$122.85 billion (US$3.99 billion), according to the Financial Supervisory Commission (FSC).
Earlier this month, news that Blackstone had defaulted on 531 million euros ($562 million) in Commercial Mortgage Backed Securities (CMBS) due to rising interest rates in the current rate-hike cycles shook global financial markets.
At a time of heightened concern over local banking, insurance and securities industry exposure to Blackstone, data compiled by the FSC, Taiwan’s top financial regulator, showed that no local banking and insurance industry companies owned CMBS issued by issued the US private equity firm and that no Taiwanese securities and futures firms used their own funds to invest in marketable securities sold by Blackstone.
However, a total of 19 Taiwanese banks had NT$61.85 billion in exposures to Blackstone, including NT$61.45 billion in loans, while a total of nine Taiwanese insurance companies had NT$61.0 billion in exposures at Blackstone, which accounted for just 0.2 percent of local insurers, had available industry capital, the FSC said.
At the end of January, the total exposure of the local banking, insurance and securities companies was NT$122.85 billion, and based on that figure, the FSC said the impact was small.
The FSC said no Taiwanese banks served as agents to sell Blackstone’s CMBS to investors here, while about 10 banks sold NT$7.136 billion worth of other US firm financial products to local investors.
As for investment in mutual funds, the FSC said public and private equity funds owned by the local investment trust sector invested NT$684 million in funds in Blackstone’s products, accounting for just 0.01 percent of Taiwan’s total mutual fund investment.
Blackstone is the world’s largest alternative wealth manager with approximately $975 billion in assets under management (AUM) and real estate-backed funds are its largest businesses, including real estate funds and real estate investment trusts (REITs) in the Americas, Europe and Asia.
Meanwhile, the FSC cited its data as saying that the local banking, insurance and securities industry had no exposure through their own funds to Silvergate Bank and Silicon Valley Bank (SVB), two troubled US banks, while only mutual funds were managed by Taiwanese investment trusts. Firms invested about NT$300 million in the two banks.
Global financial markets were also hit by Silvergate Bank’s announcement that it would cease operations, which had been banking heavily on serving the burgeoning crypto economy, and its battle with SVB, which has long provided funding to venture capital-backed startups, a company to find to buy its assets to raise funds.
According to the FSC, banks in Taiwan had NT$3.32 trillion in exposure to the United States at the end of January, while the local insurance industry had a total exposure of NT$8.55 billion to the US market.
At the end of January, the exposure of mutual funds managed by local investment companies and the exposure of mutual funds managed by overseas firms and bought by local investors reached NT$1.43 trillion and NT$1.75 trillion, respectively.
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