M’sia pen­sion fund aims to boost per­for­mance

> KWAP to re­view as­set al­lo­ca­tion strat­egy by putting more money for for­eign deals

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: Malaysia’s Re­tire­ment Fund Inc aims to lift the over­seas por­tion of its in­vest­ment port­fo­lio to as much as 15% from 12%, as the US$30 bil­lion (RM125 bil­lion) pen­sion fund looks to boost per­for­mance while do­mes­tic re­turns slow, its chief ex­ec­u­tive told Reuters.

Kumpu­lan Wang Per­saraan (KWAP) will re­view its as­set al­lo­ca­tion strat­egy in the new year, Wan Ka­maruza­man Wan Ah­mad said at Reuters Global In­vest­ment 2018 Out­look Sum­mit. Its international in­vest­ments in­clude US ride-hail­ing firm Uber Tech­nolo­gies Inc, he said.

With US$29.83 bil­lion worth of as­sets un­der man­age­ment, a three per­cent­age point in­crease means a shift of US$900 mil­lion into for­eign deals, a Reuters cal­cu­la­tion showed.

The state-linked pen­sion fund re­ceived board ap­proval in 2013 to in­vest up to 19% of as­sets abroad.

But a 23% dive in the ring­git in 2015 saw the gov­ern­ment urge funds to repa­tri­ate cap­i­tal and limit for­eign ex­po­sure.

As do­mes­tic in­vest­ment in­creased, how­ever, the main share price in­dex con­tin­ued a de­cline that be­gan in 2014.

The in­dex is up 6% in 2017 but is still one of the re­gion’s worst per­form­ers. Re­turns on many do­mes­tic in­vest­ments are there­fore lower than global in­vest­ments even though the ring­git is weaker than three years ago, Wan Ka­maruza­man said.

“The tar­get is to in­crease by 7% (to 19%) but we might look at 15%, which is more re­al­is­tic,” the ex­ec­u­tive said, de­clin­ing to elab­o­rate on re­gions or sec­tors of fo­cus.

KWAP put US$30 mil­lion into Uber last year as its first for­eign, dis­rup­tivetech­nol­ogy in­vest­ment, and was con­sid­er­ing more tech­nol­ogy-re­lated deals.

Wan Ka­maruza­man said the Uber in­vest­ment was long-term, and that the fund was wait­ing for po­ten­tial in­vest­ment from Ja­panese con­glom­er­ate SoftBank Group Corp – which has said it is con­sid­er­ing in­vest­ing – to es­ti­mate any gains.

“Let’s see the val­u­a­tions. If it does (in­vest), we will know whether our in­vest­ment is in the money or not,” Wan Ka­maruzan said.

KWAP is con­sid­er­ing par­tic­i­pat­ing in a fund that Alibaba Group Hold­ing Ltd aims to raise. The Chi­nese e-com­merce firm plans to in­vest in re­gional small busi­nesses in the Dig­i­tal Free Trade Zone, which it launched with Malaysia’s gov­ern­ment. Wan Ka­maruza­man said talks were at an early stage.

He also re­it­er­ated an end to talks over buy­ing a stake in AMMB Hold­ings Bhd (AmBank) from Aus­tralia and New Zealand Bank­ing Group Ltd, which owns 24%.

“KWAP has al­ways been a fi­nan­cial in­vestor,” he said.

“We don’t want to ac­quire any con­trol­ling stakes in any com­pany.

“If there’s a smaller (AmBank) stake to be sold, we might consider it, but the bank needs a driver.”

The fund is now in talks to buy stakes in the Malaysian units of Great East­ern Life As­sur­ance Com­pany Ltd and Pru­den­tial PLC, as the in­sur­ers seek lo­cal share­hold­ers to sat­isfy cen­tral bank own­er­ship reg­u­la­tions.

“We have re­ceived cen­tral bank ap­proval to be­gin talks and we have started but it is very pre­lim­i­nary,” Wan Ka­maruza­man said.

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