GSIS wants only experts to handle offshore investment

The state-run Government Service Insurance System (GSIS) on Monday issued stricter requirements for external fund managers aiming to manage the pension fund’s upcoming $800-million foreign investment.

In a Feb. 19 advisory, Gracita Gilda V. Bocanegra, senior vice president of the GSIS’ fund management group, said the potential fund manager must have a strong asset portfolio and at least three years track record.

“Performance may be broken down by main categories of funds, but the GSIS requires Global Investment Performance Standards-compliant performance reports. Returns and volatilities should be annualized, except for year-to-date figures,” said Bocanegra, who also chairs the GSIS investment bids and awards committee.

The potential fund manager must also be keeping in its portfolio fixed income securities highly rated by credit agencies, she said.

“The investment grade requirement applies only to fixed income and no longer to equities. The investment grade requirement refers to issue rating for fixed income. The fixed income instruments must be rated investment grade by at least one of the following: S&P, Moody’s and Fitch,” Bocanegra explained.

Last week, the GSIS announced that the new deadline for submission of proposals was moved to March 16.

The evaluation of technical proposals was also moved to March 19 to April 30.

The schedules for post-technical evaluation, opening of management fee proposal, notice of award and contract award date would be announced much later.

GSIS president and general manager Jesus Clint O. Aranas had said they were eyeing to raise to 15 percent the share of foreign investments to total assets from 10 percent at present in order to diversify revenue sources.

In January, Aranas announced the GSIS would be hiring two foreign fund managers to invest a total of $800 million overseas in order to diversify the pension fund’s portfolio and almost double the rate of investment returns.