The state-run Government Service Insurance System (GSIS) has abandoned plans to build up its offshore investments.
The Inquirer learned that the GSIS board, chaired by Rolando L. Macasaet, this month issued a resolution veering away from the multi-asset strategy approved late last year, and instead shifting to more domestic investments. The pension fund has altogether stopped the hiring of two foreign fund managers.
Some officials expressed concern that by doing so, the GSIS would lose institutional credibility since it was set to announce the names of the two external fund managers that won the bidding for the $800-million foreign investment. The two fund managers were Deutsche Asset Management International GmbH and Schroder Investment Management Ltd., sources told the Inquirer.
GSIS senior vice president for the fund management group Gracita Gilda V. Bocanegra did not provide further details, saying only the firms would be informed of the developments within the month.
Because of this, the GSIS could miss a higher 2018 return on investment (ROI) target of 9 percent imposed by the Governance Commission for Government Owned or Controlled Corporations (GCG), GSIS president and general manager Jesus Clint O. Aranas told the Inquirer.
Last year, the GSIS’s ROI reached 8.7 percent, exceeding the pension fund’s internal medium-term target of 7 percent.
Under its multiasset strategy, the GSIS had said tapping external fund managers would allow the pension fund to “take advantage of diversification and opportunities for higher returns.”
Adopting this plan was paramount, he said, noting the GSIS could not just rely on domestic investments. He cited, for example, the “roller coaster” at the stock market.
The GSIS was planning to increase its initial investment in the Macquarie Asia Infrastructure Fund 2 (MAIF 2).
The GSIS was also planning to sell this month all of its shares in state-run Philippine National Construction Corp. (PNCC) at a minimum of P50 million and divert the amount to other investments.