Kumpulan Wang Persaraan (KWAP), the second largest pension fund in Malaysia with RM125 billion assets under management, is poised to invest in the US property market, reported the New Straits Times.
“We have received board approval and have a mandate to invest in the US, especially in the technology and real estate sectors,” said KWAP’s Chief Executive Datuk Wan Kamaruzaman Wan Ahmad on Monday (23 April).
“We’re not in a hurry. We’re selective in our investment as the US tax structure is quite complicated.”
He noted that KWAP’s international exposure currently stands at 13 percent, so if it wants to provide higher returns to it stakeholders if needs to make more investments in major overseas markets, particularly the US.
Five years ago, 54 percent of the fund’s assets comprised fixed income investments, 36 percent were allocated in equity, while the remaining 10 percent went into alternative investments.
But over the years, the fund decided to increase its investments in higher-yielding and riskier assets. Hence, KWAP’s portfolio in fixed assets has been reduced to 46 percent. On the other hand, allocation to alternative investments and equities were increased to 14 percent and 40 percent respectively.
“In 2016, we sold a property in the UK and last year, we sold another in Australia. As of now, we’re under-invested in terms of international exposure,” he added.
Notably, KWAP’s plan to expand into the US is similar to those announced by Malaysia’s sovereign wealth fund Khazanah Nasional and the Employees Provident Fund (EPF).
Image sourced from KWAP
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