GSIS evaluating managers for $800-M fund

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GSIS is currently evaluating the applications of fund managers. — BW FILE PHOTO

By Karl Angelo N. Vidal, Reporter

THE GOVERNMENT Service Insurance System (GSIS) is evaluating the external asset managers that applied to manage $800 million worth of its investments — a move to diversify its funds.

“We’re looking at the resumes of the external fund managers. We want to make sure that they’re really qualified. We have to be able to trust them,” GSIS President and General Manager Jesus Clint O. Aranas said in a press conference on Wednesday. “We’re now in the evaluation stage. We’re evaluating which of the fund managers will qualify [based on] our scorecard.”

The state pension fund said more than 40 fund managers applied for the trust fund. It will hire two external firms to have an allocation of $400 million apiece.

Napaka-stringent ng scorecard namin (Our scorecard is very stringent) in rating these managers. We have more than 40 applicants,” Mr. Aranas said.

Qualifications for the pension fund’s wealth managers include a proven track record, global presence and experience of at least 10 years in the financial markets, Mr. Aranas said.

He added that the GSIS wants to place $800 million in foreign-currency instruments to diversify its asset portfolio.

“We adapted the multi-asset strategy which is the global trend. We do not want to put our eggs in the local basket all the time so that if ever it corrects, our funds will not be that much affected,” Mr. Aranas said in a mix of Filipino and English.

GSIS earlier extended its search for external asset managers by a month until April 13 as it wanted to receive more applicants.

As of November 2017, 62% the pension fund’s assets were invested in financial assets, 24% in loans to its members, 6% in investment properties, 4% in cash and another 4% in property, equipment and other assets.

Aside from this, Mr. Aranas said the pension fund will commit at least $300 million in a fund vehicle to finance private infrastructure projects in Asia.

“The fund that we invested in is just a commitment at this point. Nag-umpisa pa lang. (It just started),” GSIS Senior Vice-President Gracita Gilda V. Bocanegra explained. “It’s called Macquarie Asia Infrastructure Fund and it is committed to invest in Asian infrastructure assets.”

She said GSIS committed along with other foreign investors, gathering a pool of funds amounting to more than $3 billion.

The investment vehicle stemmed from the state pension fund’s P16.8-billion commitment in the Philippine Investment Alliance for Infrastructure (PInAI) in 2012.

The alliance is managed by global asset manager Macquarie Infrastructure and Real Assets, while investors include the Asian Development Bank, Algemene Pensione Groep (APG) of the Netherlands and the Macquarie Group.

As of end-2017, Ms. Bocanegra said, the fund was almost fully deployed.

Like its $800-million multi-asset investment program, Ms. Bocanegra said the move seeks to diversify the portfolio of GSIS.

“The fund seeks to diversify. As the same principle, we don’t want them to all invest in the Philippines. We want them to invest also in other countries,” Ms. Bocanegra said, adding that some of the fund will flow back in the Philippines to finance infrastructure projects.

Currently, the pension fund’s actuarial life is at least 35 years, Mr. Aranas said.