State-run Government Service Insurance System ( GSIS ) is planning to invest $800 million overseas to diversify its investments and take advantage of good returns.
In a press briefing, GSIS president and general manager Jesus Clint Aranas said the state pension fund is planning to further increase its overseas investments to about five percent of its assets from the current one to two percent share.
In line with this, the GSIS intends to invest in a Multi-Asset Strategy, deploying about $800 million of its portfolio into foreign currency denominated instruments this year.
Aranas said the GSIS is currently looking for two external fund managers to handle the investments.
“This is really testing the waters in investment so it’s not so big, we want to see how they handle our funds also,” Aranas said.
According to Aranas, investing overseas would help the GSIS meet its return-on-investment target of nine percent per year. Currently, he said the GSIS investments in fixed income only yields about 5.5 percent.
“Global market is performing very good these days. Our return-of-investment average of 5.5 percent is below our ideal rate of nine percent per annum. We want to beat that, the index, that’s why we have a risk conservative approach,” he said.
Aside from foreign-currency instruments, Aranas said the GSIS also intends to increase its investment in infrastructure.
“We really want to be part of the government’s massive infrastructure program, preferably equity. We are looking for the right partners,” he said.
Gracita Gilda Bocanegra, of the GSIS’ Fund Management Group, said the state pension fund plans to optimize investments in real estate and private equity.
As of November 2017, Bocanegra said the GSIS’ net income jumped 52.52 percent to P84.15 billion from P55.17 billion in the same period in 2016.
M.G. Padin, PS