EPF out­sourced RM114.5bil to ex­ter­nal man­agers last year

The Star Malaysia - StarBiz - - Front Page -

PETALING JAYA: The Em­ploy­ees Prov­i­dent Fund (EPF) out­sourced RM114.56bil to ex­ter­nal port­fo­lio man­agers last year, an in­crease of al­most 10% from 2016.

The prov­i­dent fund said the al­lo­ca­tion was in­vested in eq­ui­ties and fixed in­come in­stru­ments, rep­re­sent­ing 14.5% of its to­tal in­vest­ment as­sets in 2017, al­most dou­bling the amount from five years ago.

“As we gear up to­wards be­com­ing a tril­lion-ring­git fund, we will con­tinue to out­source a por­tion of our funds as part of our di­ver­si­fi­ca­tion ini­tia­tive, and to suit­ably lever­age on the knowl­edge and skill sets of ex­ter­nal fund man­agers that com­ple­ment our own in­ter­nal fund-man­age­ment ca­pa­bil­i­ties,” EPF chair­man Tan Sri Sam­sudin Os­man ( pic) said in a state­ment.

He said the prov­i­dent fund would also con­tinue to in­crease in­vest­ments, es­pe­cially in al­ter­na­tive in­vest­ments and in­fras­truc­ture.

“How­ever, tak­ing into ac­count the pre­vail­ing mar­ket volatil­ity and sub­dued growth, our ex­pan­sion will be done grad­u­ally and in a pru­dent man­ner,” Sam­sudin added.

As at Dec 31, 2017, the size of the EPF’s in­vest­ment as­sets had in­creased 8.25% to RM791.48bil.

The EPF said it had paid al­most RM310mil in man­age­ment fees last year, which rep­re­sents a 6.5% in­crease from RM291mil a year ear­lier due to higher out­sourc­ing of funds to ex­ter­nal fund man­agers.

The coun­try’s sec­ond-largest pen­sion fund, Re­tire­ment Fund Inc (KWAP), last year also al­lo­cated about 15% of its in­vest­ment as­set amount­ing to RM17­bil to ex­ter­nal fund man­agers.

Sam­sudin said about 45% of the EPF’s in­vest­ment as­sets are syariah-com­pli­ant and the fund ex­pects to grow this as­set class by at least RM25­bil a year to meet the de­mand of its mem­bers.

He noted that the com­pe­ti­tion for high-qual­ity Is­lamic as­sets was not only con­fined to in­vestors in the Mus­lim world, but to the West­ern pen­sion funds as well, given the at­trac­tive­ness of Is­lamic as­sets as an al­ter­na­tive and eth­i­cal source of fi­nanc­ing.

“The EPF needs more qual­ity Is­lamic as­sets to in­vest in, and we wel­come ex­ter­nal man­agers to join us in our com­mit­ment to grow­ing our syariah man­date,” he added.

On Mon­day, the EPF dished out 14 awards to its ex­ter­nal fund man­agers in recog­ni­tion of their per­for­mance.

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