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English > Interactive > Pages > KWAPplansmoreoverseas.aspx
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KWAP Plans More Overseas
Source of Publication : The Malaysian Reserve
Date: 18 January 2012
Retirement Fund Inc, or Kumpulan Wang Persaraan (KWAP), plans to increase its overseas investments to 10% from the current 3% in the next three to five years.
Its director for portfolio strategy Nazaiful Affendi Zainal Abidin, said the overseas investments will include equity and fixed income investments, depending on opportunities.
“We don’t simply want to increase it for the sake of increasing, but we have three to five years to do it based on our target allocation. Certainly, we have to look at our options and weigh them. Clearly, this requires indepth research and understanding of the risks involved before we do so,“ he told The Malaysian Reserve in an interview.
“At the moment, 96% to 97% of our current portfolio is still pretty much domestic. As part of our evolution, the game plan is for us to transition the portfolio from where we are now to include more international asset classes and bring it in line with our target Strategic Asset Allocation which was approved back in 2010.”
Currently, the fund holds two commercial properties in Australia, namely the newly acquired ASX Building in Sydney and the 737 Bourke Street office building in Melbourne.
The retirement fund is allocating 4% of its entire fund or approximately RM3.2 billion for both local and international property investments.
Besides Australia, the retirement fund is eyeing Britain as another major property investment destination.
“We are actively looking. They are not necessarily confined to Australia. The opportunity is in the global real estate space. Naturally, if you look at the market in general, Australia and the UK are the markets that people are looking at, but there are opportunities elsewhere too,” he said.
The federal government contributes 5% of the total annual budgeted emolument of government employees while statutory bodies, local authorities and agencies contribute 17.5% of the basic salaries of their pensionable employees to KWAP on a monthly basis.
KWAP is optimistic that its fund size will increase to between RM80 billion and RM85 billion this year in view of higher gross investment income as well as the federal government's and employers’ contributions.
He expects the macro environment to remain difficult and volatile in 2012 given the fluid situation in Europe and the US.
Still, he believed that opportunities do emerge in distressed environments and that the fund should not be too deterred by such scenarios given its longterm investment horizon and its conviction on fundamentals.
He also said that the fund is looking to enhance its investment returns, apart from diversifying its investments, including venturing into asset classes in the Asian region.
“Of course, the preference now is to make sure that the fund position itself and seize the opportunities in this part of the world, specifically in emerging Asia and Asia ex-Japan,” he said. |
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1/18/2012
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