KUALA LUMPUR (Sept 24): An uncertain Brexit backdrop notwithstanding, the Employees Provident Fund (EPF) is positive on the United Kingdom's long-term prospects, given its well-developed infrastructure and large talent pool, said EPF chief executive officer Tunku Alizakri Alias.
“From EPF's perspective, we are still quite positive about the UK. Whether they will be able to meet past performance... we are still not quite sure what is the real impact of Brexit, whether it is going to be a hard or soft exit, nobody knows the answer at this point of time,” Alizakri told reporters after the launch of the pension fund's digital investment platform, i-Invest.
“I have been in a lot of discussions with many people, both in Europe and the UK, about what Britain's role is (going forward). (In conclusion,) the UK will still be a very relevant financial capital of the world, not only because they have been a financial capital since ages ago, but because they have the infrastructure, resources and talents in place,” he added.
He went on to say that many global players' knee jerk response to the Brexit vote in 2016 was to move away from the UK. “But many of them now say their strategy will be in duality, in that they will still maintain their hub (headquarters) in the UK, while looking to develop a second one (in Europe)," he said.
“For me, it is a great opportunity. Not only do you diversify away from a concentration risk, you are creating more hubs. Competition creates excellence. I would like to think that when you have a European hub, you will force other players in the UK to up their game to ensure they remain relevant," Alizakri added.
He also said the EPF sees opportunities in the country despite market prospects being clouded by uncertainties like the Brexit and trade diversions, as the EPF is a fund that looks at long-term investments.
“It is usually in times of uncertainty that people want to get rid of assets. For the EPF, which has a deep-pocket and a long time horizon, this is a great time for us to get quality assets from those who are unable to withstand the uncertainties presented by current global developments,” he added.
Just in end-May, the EPF announced it had bought a warehouse facility from Sports Direct International Plc in the UK for £120 million or RM562 million.
As at end-2018, EPF's investment in the UK makes up 3% of its total investment assets, which amounted to RM833.76 billion then, up 5.34% from RM791.48 billion in 2017.