<article>The <a href="http://www.kwsp.gov.my/portal/en/web/kwsp/home" target="_blank">Employees Provident Fund (EPF)</a> is in talks to cash in on one or two of its property assets in the UK, the fund said.</article>

The <a href="http://www.kwsp.gov.my/portal/en/web/kwsp/home" target="_blank">Employees Provident Fund (EPF)</a> is in talks to cash in on one or two of its property assets in the UK, the fund said.
CEO Shahril Ridza Ridzuan said the potential disposals will enable the pension fund to reap benefits of the massive yield compression in the UK property market due to the quantitative easing stimulus introduced by the European Central Bank.
The proceeds from the disposal would be used to invest elsewhere, The Star <a href="http://www.thestar.com.my/Business/Business-News/2015/04/11/EPF-cashing-in-on-UK-property/?style=biz" target="_blank">reported</a> added.
&#8220;It is probably a good time for us to start looking at disposal of one or two assets,&#8221; Shahril told local media after presenting the EPF 2014 annual report last Friday.
Shahril did not divulge other details of the potential disposals and did not identify the parties involved, although he noted that the process will be on a tender basis.
&#8220;We will make the appropriate announcements when the time comes,&#8221; The Edge Financial Daily <a href="http://www.theedgemarkets.com/en/article/epf-talks-divest-1%E2%80%932-properties-uk" target="_blank">quoted</a> him.
Malaysia’s pension fund owns about 20 properties in the UK, including several office buildings in London and 12 hospitals, which were acquired in 2013 for MYR3.28bil ($880 million).
The total value of properties it owns in the UK is estimated at £2bil ($2.88 billion).
EPF has been aggressively expanding its portfolio overseas in the past five years. Foreign investment accounted for 6 per cent of the fund’s total asset in 2009, and now stands at approximately 23 per cent, at the end of last year.
Over the next three years, assets overseas is projected to make up 26 per cent of the fund’s total assets. “Investing overseas is not inherently riskier than investing in Malaysia. What we have to look at is the actual assets that you invest in and the risk returns that one expects from it,” Shahril said.
“Today we have a spread of over 20 to 30 different markets, fixed income, hybrid corporates and loans and equities, retail and development assets, among others,” he said of EPF’s diversified portfolio.
The bulk of its assets overseas are in the equity markets. Strong returns from these investment in the US and Europe last year helped the fund to declare its highest dividend payout since 2000.
On EPF&#8217;s local joint venture (JV) with <a href="http://ecoworld.my/" target="_blank">Eco World Development Group Bhd</a> and <a href="http://uda.com.my/" target="_blank">Uda Holdings Bhd</a> to develop the Bukit Bintang City Centre, Shahril expects the development order for the project to be submitted and approved this year.
Once approved, he said the JV can proceed with constructions works next year.
For this year, Shahril said the EPF will make minimal changes to its overall investment strategy as the fund operates on a long-term investing basis.
The fund will continue to focus on a well diversified portfolio of investments across multiple asset classes, but will continue to be &#8220;overweight&#8221; on the equity market similar to last year, as part of its overall investment strategy.
Shahril noted that the fund’s added focus on equities in 2014 buoyed the fund’s overall performance. “I think for 2015 we are still likely to be overweight for equities given the poor outlook for fixed income yield,&#8221; he said.
Moving forward, Shahril maintained his stand that the EPF will adopt a &#8220;shareholder perspective&#8221; in any future mergers in the banking and financial sector. &#8220;We will adopt a shareholder perspective on whether there is any value creation for shareholders. But the decision is up to the management and the board,&#8221; he said.
Last year, the EPF&#8217;s total dividend credited to members&#8217; account jumped 17.5 per cent to an all-time high of MYR36.66 billion from MYR31.2 billion in 2013.
Its growth of investment assets averaged between 10 per cent and 11 per cent annually, outstripping the growth of the local capital market.
The EPF&#8217;s total annual contributions amounted to MYR57.17 billion last year, with a net inflow of RM23.39 billion after accounting for total amount withdrawn of MYR33.78 billion.
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The Employees Provident Fund (EPF) is in talks to cash in on one or two of its property assets in the UK, the fund said.

Malaysia's EPF looking to divest from UK properties

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