EPF to double property investments

In a bid to diversify its assets, the Employees Provident Fund (EPF) plans to increase its property investments by two-fold over the next few years, reported Bloomberg.

According to its CEO Shahril Ridza Ridzuan, the fund is currently planning to acquire more real estate in continental Europe to add to its existing overseas properties, including the Battersea Power Station project and 11-12 St James Square in London.

“Our real estate exposure is very small, less than four percent, at this point in time,” he said. “It’s the fastest growing part of our business. The goal is for private market assets to take about 10 percent of the total fund size in five to seven years.”

With this uptick in foreign property acquisitions, the EPF joins other sovereign wealth funds with a similar strategy. The world’s largest wealth fund Oslo-based Norges Bank Investment Management plans to spend S$8 billion annually to acquire such assets, while Singapore’s GIC has set its sights on real estate in gateway cities and major markets.

On average, the EPF’s investments in offshore properties and infrastructure projects have surged by over 50 percent per year, revealed its 2014 annual report. Notably, it has been purchasing real estate since 2009 to protect its money against inflation.

As for the rest of its portfolio, 42 percent of its investments consists of equities as of December 2014, while fixed income instruments account for 51 percent.
The EPF oversees the retirement savings of over 13 million Malaysians.

Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story.