8 foreign fund managers vie for GSIS’s upcoming $800-M global investment

The state-run pension fund Government Service Insurance System moved a step closer to its planned $800-million global investment with eight foreign firms deemed qualified to be hired as fund managers.

In a July 9 advisory, Gracita Gilda V. Bocanegra, senior vice president at the GSIS’s fund management group, said that the top eight proposers were the following: Alliance Bernstein Singapore Ltd.; American Century Investment Management Inc.; Columbia Threadneedle Investment Advisers LLC; Deutsche Asset Management International GmbH; Pacific Investment Management Company LLC; Schroder Investment Management Ltd.; State Street Global Advisors Singapore Ltd.; and Wells Fargo Asset Management-Wells Capital Management Inc.

Bocanegra, who chairs the GSIS’s investment bids and awards committee, said that these eight external fund managers will “proceed to the next stage of the selection process.”

The technical proposals of up to 45 applicants were evaluated by the GSIS from April until last month, president and general manager Jesus Clint O. Aranas earlier said.

The schedules for post-technical evaluation, the opening of management fee proposal, notice of award, and contract award date were still undetermined and will be announced later, Bocanegra had said in an advisory last March.

To recall, Aranas announced in January that the GSIS will hire two foreign fund managers to each invest $400 million overseas in order to diversify the pension fund’s portfolio and almost double the rate of investment returns.

Aranas was optimistic that they would be able to choose the two external fund managers before yearend.

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

As such, the GSIS was also mulling to increase its initial investment in the Macquarie Asia Infrastructure Fund 2 (MAIF 2), even as Aranas declined to disclose how much the pension fund already 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,” according to Macquarie.

“We have the appetite to invest more” in MAIF 2, according to Aranas, as he had cited that the GSIS has “reliable” partners in the fund.