This article first appeared in The Edge Financial Daily on April 18, 2018

KUALA LUMPUR: The Employees Provident Fund (EPF) outsourced a total of RM114.56 billion to external portfolio managers as at Dec 31, 2017, an increase of RM10.2 billion or 9.8% from RM104.37 billion in 2016.

This allocation, invested in both equity and fixed income instruments, represented about 14.5% of EPF’s total investment assets, it said in a press release yesterday.

“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 said at the EPF External Portfolio Managers Annual Awards 2018 held on Sunday, according to the press release.

“We will continue to increase our exposure in the markets we invest in, 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.

The EPF also said that with about 45% of investment assets being syariah-compliant, it now expects to grow these assets by at least RM25 billion a year on average to meet the demand of its members.

“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,” Samsudin said.

The EPF External Portfolio Managers Annual Awards 2018 saw 14 awards presented to the top performing external portfolio managers.

The EPF said in the statement that the objective of the annual award is to recognise the outstanding performance of external portfolio managers in managing EPF’s investment portfolio.