EPF to boost investments in syariah-compliant PE funds

The EPF bought nearly 20 million IOI Corp shares in early March

KUALA LUMPUR: The Employees Provident Fund (EPF) is prepared to increase its investments in syariah-compliant private equity (PE) funds, said investment deputy chief executive officer Datuk Mohamad Nasir Ab Latif.

He said, however, there were a limited number of such funds.

Mohamad Nasir said the pension fund has not met its full asset allocation target for its PE segment.

“We have allocated 10% of our investment in the alternative space which consists of infrastructure and real estate.

“Our PE investment is currently at four per cent and only half of which are in syariah-compliant funds,” he said, adding that there was a shortage of such funds in the domestic and international markets despite an increase in demand from Muslim countries.

He said the EPF would continue to invest in both syariah-compliant and conventional funds concurrently.

“The main challenge lies in finding syariah-compliant PE funds.

“We will keep increasing our investments in conventional funds, and we would like to encourage more syariah-compliant funds to be available in the market,” Mohamad Nasir told Bernama on the sidelines of AVCJ Private Equity Venture Forum ? Malaysia in Kuala Lumpur on Tuesday.

For the second quarter ended June 30, 2017, EPF's syariah-compliant savings accounted for RM820.71 million out of RM11.51 billion of its total investment income, while RM10.69 billion was generated from its conventional savings.  

Syariah savings derived its income solely from its portion of the syariah-compliant assets, while income from conventional savings was generated by its shares of both syariah-compliant and non-syariah-compliant assets.

As of Dec 31, 2016, the value of EPF investment assets rose by 3.92% year-on-year to RM759.78 billion from RM731.11 billion.

Of the total investment assets, 47.71% were syariah-compliant investments and the balance were invested in non-syariah-compliant assets. - Bernama
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