KWAP may invest in three foreign-owned insurance firms

KUALA LUMPUR: The Retirement Fund Inc (KWAP) has narrowed its options to three foreign-owned insurance companies and it is appointing an adviser on the matter, according to chief executive officer Datuk Wan Kamaruzaman Wan Ahmad.

“We are at the point of appointing an investment bank as our adviser... The companies are Great Eastern, Prudential and AIA," he said.

KWAP, Malaysia’s second-largest pension fund, also has the option to partner other institutional investors as the percentage of shares that must be owned in these insurance companies will be relatively big.

“It (stake acquisition) depends on valuation. We might also be looking at partnering with institutional investors but it depends because the stake is quite sizeable.

“We may buy smaller stakes in the companies, let’s say 10% in each of the companies,” he told Bernama on the sidelines of the Bumiputra Agenda Steering Unit’s super series II event.

Wan Kamaruzaman said KWAP would appoint an adviser to conduct the selection process on its behalf so that it would not be deeply involved in the task.

KWAP will make the final decision after the process is completed and the result of the selectionis expected to known by year-end, according to Wan Kamaruzaman.

KWAP’s fund size grew 200% from RM42bil in 2007 to RM125bil in December 2016, and of the amount, RM53.6bil resulted from increased in investment income which would be used to fund pension liabilities.

Bank Negara has instructed foreign insurers namely Tokio Marine Holdings Inc, AIA Group Ltd, Great Eastern Holdings Ltd and Prudential to comply with the foreign ownership rule which requires overseas insurers to increase local shareholding to at least 30%.

They have until June 2018 to comply with the ruling. — Bernama