Malaysia’s $30bln pension fund to allocate more money

KUALA LUMPUR: Malaysia´s Retirement Fund Inc aims to lift the overseas portion of its investment portfolio to as much as 15 percent from 12, as the $30 billion pension fund looks to boost performance while domestic returns slow, its chief executive told Reuters.

Kumpulan Wang Persaraan (KWAP) - the fund´s local name - will review its asset allocation strategy in the new year, Wan Kamaruzaman Wan Ahmad said at Reuters Global Investment 2018 Outlook Summit.

Its current international investments include U.S. ride-hailing firm Uber Technologies Inc, he said. With 125 billion ringgit ($29.83 billion) worth of assets under management, a 3 percentage point increase means a shift of $900 million into foreign deals, a Reuters calculation showed.

The state-linked pension fund received board approval in 2013 to invest up to 19 percent of assets abroad. But a 23 percent dive in the ringgit in 2015 saw the government urge funds to repatriate capital and limit foreign exposure. As domestic investment increased, however, the main share price index continued a decline which began in 2014. The index is up 6 percent in 2017 but is still one of the region´s worst performers.

Returns on many domestic investments are therefore lower than global investments even though the ringgit is weaker than three years ago, Wan Kamaruzaman said. "The target is to increase by 7 percent (to 19 percent) but we might look at 15 percent which is more realistic," the executive said, declining to elaborate on regions or sectors of focus.