Friday, April 1, 2011

EPF takes a bigger bite overseas

The Employees Provident Fund’s (EPF) attempts to enter the Vietnam healthcare market via Columbia Asia Group comes on top of a series of recent overseas acquisitions that aim to boost the fund’s returns and diversify its investments.

Earlier this month, EPF made the news with its continued property acquisition blitz in the United Kingdom with the purchase of its third commercial property in London.

EPF’s latest buy is a 225,000 sq ft office block on London’s Fleet Street from Germany-based fund Union Investment to the tune of £148 million (RM717.8 million).

This comes after EPF’s announcement last August that it would invest a whopping £1 billion in UK properties. To date, EPF has already spent £485 million of its allocation for UK property purchases.

The provident fund’s two other acquisitions are One Sheldon Square in Paddington Central and 40 Portman Square near Oxford Street for £156 million and £180 million respectively.

These form part of EPF’s strategy to diversify its investment instruments and income from its mainstay of equities, which contribute over 45% of its total gross investment income.

The push to venture beyond Malaysian shores came after the Budget 2011 announcement last year by Prime Minister Datuk Seri Najib Razak that EPF will be allowed to raise its overseas investments to 20% of the total assets under management from the current 7%.

EPF chief executive officer Tan Sri Azlan Zainol was recently quoted in news reports as saying that EPF was looking to increase its exposure to the international market in a bid to diversify the fund’s investment portfolio.

Currently, EPF has about RM40.53 billion invested in overseas markets, representing 9.2% of its overall RM440.52 billion investment last year, Azlan said.

With the global markets still reeling from the recent turmoil in the Middle East and North Africa region as well as the Japan tsunami tragedy, it remains to be seen what EPF’s next move overseas will be. - by Chua Sue-Ann of theedgemalaysia.com

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