‘EPF EVALUATING STAKE ACQUISITION’
CEO says pension fund open to investing in insurance firms as sector offers huge growth potential
THE Employees Provident Fund (EPF) is evaluating stakes that can be acquired in foreign insurance companies operating in the country.
The pension fund is eyeing up to 30 per cent stake in foreign insurers, and the evaluation is vital to meet its investment profile and returns risk appetite.
“We are open to exploring this acquisition. We look at the insurance industry as a huge growth sector in Malaysia.
“We know that Malaysians are under-insured at this point in time ... (and) insurance firms have good infrastructure,” said chief executive officer Tunku Alizakri Alias after a briefing on EPF’s 2018 financial performance, here, yesterday.
He, however, did not divulge details pertaining to potential acquisitions nor did he reveal the finalisation of any deals. “It is all about negotiations at this point of time. We will inform (the results) soon.”
Alizakri said EPF normally would not go into a big bang approach, but would rather undertake a strategic acquisition.
“We don’t believe in management control. A 30 per cent stake has been put up for sale by foreign insurance firms.
“We will definitely take a portion of the stake that is being offered to the market,” he said
Bank Negara Malaysia has instructed foreign insurers to comply with the foreign ownership rule, which requires them to increase their local shareholding up to 30 per cent.
According to EPF, any investment will involve negotiations and due diligence, guided by strategic asset allocation, to ensure the fund optimises its returns within the risk-tolerance levels.
“We undertake governance and due diligence processes before investing,” said Alizakri.