GSIS hiking investment in regional fund

Government Service Insurance System (GSIS) is looking at raising its investment in a regional infrastructure fund to diversify its global assets and counter a volatile local stock market.

GSIS president and general manager Jesus Clint O. Aranas said in an interview on Thursday that the state-run pension fund was also giving prospective foreign fund managers until next month to prove themselves eligible to bid for the upcoming $800-million global investment.

Aranas announced in January that the GSIS would be hiring two foreign fund managers to each handle $400 million on behalf of the pension fund. The investment overseas is aimed at diversifying the pension fund’s portfolio and almost double the rate of investment returns.

But Aranas said that due to the GSIS’ “stringent requirements,” only “very few” qualified so far out of up to 45 applicants.

“For those who did not meet the criteria, we’re giving them a chance to explain. We’re just making sure that we’re not losing out on the best one,” Aranas explained.

Aranas was nonetheless still optimistic that they would be able to choose the two foreign fund managers before the end of the year.

GSIS is also planning to increase its initial investment in the Macquarie Asia Infrastructure Fund 2 (MAIF 2), Aranas said, although he declined to disclose how much the pension fund invested late last year.

MAIF 2 was the second Asian regional infrastructure fund of Macquarie Infrastructure and Real Assets, which in April generated $3.3 billion in investor commitments, according to Macquarie’s website.

“More than $1.7 billion of MAIF 2 capital has already been committed across toll roads, renewables and petrochemical storage assets in India, the Philippines, Singapore and China,” Macquarie said.

Aranas said that the GSIS could invest an additional amount in MAIF 2 to fund “reliable” projects in the region.

“We have the appetite to invest more,” Aranas said, adding that the GSIS also has “reliable” partners in the fund.

Aranas noted that while the Philippine stock market reached its heyday last year, it was currently like a “roller coaster,” hence the GSIS could not rely only on its domestic investments.