The state-run pension fund Government Service Insurance System again extended by another month the deadline for submission of proposals from prospective external fund managers for its planned $800-million offshore investment.
In a text message Friday, GSIS president and general manager Jesus Clint O. Aranas said he ordered the further extension to April 13 “for transparency.”
“The initial postings were confusing for some” of the interested foreign fund managers, Aranas explained.
Since January, the GSIS already issued eight supplemental bulletins clarifying the terms and conditions of its request for proposals.
In a March 15 advisory, Gracita Gilda V. Bocanegra, senior vice president at the GSIS’s fund management group, said that instead of March 16, the new deadline for submission of proposals was moved to next month.
The previous deadline was Feb. 16, which was also extended by the GSIS last month.
As such, the evaluation of technical proposals was also moved to April 16 to June 1 instead of the previous schedule of March 19 to April 30, said Bocanegra, who chairs the GSIS investment bids and awards committee.
The schedules for post-technical evaluation, opening of management fee proposal, notice of award, and contract award date were still undetermined and would be announced later, Bocanegra said.
Aranas had said that the GSIS was eyeing to raise to 15 percent the share of foreign investments to total assets from 10 percent at present in order to diversify their revenue sources.
In January, Aranas announced that the pension fund would hire 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.
“The global market is performing very good these days. The returns of our domestic investments in fixed-income assets average 5.5 percent, below our ideal rate of 9 percent per annum. We want to beat that, that’s why we have a risk-conservative approach,” Aranas had said.
Bocanegra had said they were hopeful they could award the contracts to the two fund managers this year.
Based on its multi-asset strategy, the GSIS said tapping external fund managers would allow the pension fund to “take advantage of diversification and opportunities for higher returns.”
“For this purpose, the GSIS sets aside $800 million of its portfolio in foreign currency-denominated instruments in line with its plan of hiring two external fund managers for the multi-asset strategy, who will be given a mandate of up to $400 million each,” it said.
“The external fund managers shall acquire, manage, and dispose the assets of the [multi-asset strategy] fund in accordance with an investment management agreement (IMA) that is consistent with the guidelines for the multi-asset mandate. Except as otherwise provided in the IMA, the fund manager will have full discretion over the management of the fund,” according to the GSIS.