Malaysia's EPF says outsources RM114.56b to external portfolio managers

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KUALA LUMPUR (April 17): The Employees Provident Fund (EPF) has outsourced a total of RM114.56 billion to external portfolio managers as at Dec 31, 2017, an increase of 9.8 per cent from RM104.37 billion in 2016.

This allocation, invested in both equity and fixed income instruments, represented 14.5 per cent of the EPF’s total investment assets, it said in a statement here today.

 Chairman Tan Sri Samsudin Osman said as the EPF geared up towards becoming a trillion-ringgit fund, it would continue to outsource a portion of its funds as part of the diversification initiative.

This was also to suitably leverage on the knowledge and skill sets of external fund managers that complemented the pension fund’s own internal fund management capabilities, he said.

“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,” said Samsudin.

He said about 45 per cent of investment assets were shariah-compliant, and the EPF expected to grow these assets by at least RM25 billion a year on average to meet the demand of its members.

Samsudin 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 shariah mandate,” he added.

Meanwhile, at the EPF External Portfolio Managers Annual Awards 2018 held yesterday, a total of 14 awards were presented to the top-performing external portfolio managers.

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

“The EPF sets high standards on performance and we would like to express our appreciation to all fund managers for their good performance over the past year, which contributed to the success of the EPF and, by extension, to the retirement well-being of our members,” said Samsudin.