Top Malaysia pension fund EPF to invest more in PE, realty to boost returns

Malaysia’s largest pension fund is looking to diversify its investment portfolios in a bid to boost returns, according to Chief Executive Officer Shahril Ridza Ridzuan.

The Employees Provident Fund plans to invest more in private equity, property and infrastructure, Shahril said in an interview on the sidelines of the Bloomberg Markets Most Influential Summit in Hong Kong on Wednesday. In the next three to four years, the fund is aiming to boost investments in the three segments so they account for about 10 percent of total assets, compared with more than 6 percent currently, he said.

“From our last six to seven years of experience looking at these assets, we’re now fairly convinced that they are viable asset classes, which will help us to meet our inflation-hedging targets,” Shahril said. “Our long-term plan, our long-term target is to really provide a real rate of return. In order for you to do that, you need to have inflation-hedged assets.”

Investors the world over are struggling to generate returns with interest rates near record lows hurt bond returns, and elevated volatility in stock markets. Singaporean investment firms GIC Pte and Temasek Holdings Pte are both bracing for lower returns amid global uncertainties and modest growth.

The Kuala Lumpur-based EPF, which has almost $170 billion of assets, reported earlier this month that its second-quarter investment income dropped 26 percent to 8.44 billion ringgit ($2 billion) from a year earlier. Fixed income accounted for almost 52 percent of its investment assets as of June, while equities represented 41 percent.

The EPF is constantly on the lookout for property assets in the U.K. as other investors seek to exit after the country voted to withdraw from the European Union, Shahril said. The fund, which has a U.K. property portfolio worth more than 2 billion pounds ($2.6 billion), is particularly keen to acquire real estate assets in the logistics and health-care sectors, he said.

“For a long-term investor, you sometimes have to be counter-cyclical, that’s what we tend to be,” Shahril said. “Typically, when markets suffer major corrections, we come in and buy heavily.”

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.