SSS plans overseas investments to boost profit

To further raise revenues, the state-run pension fund Social Security System (SSS) is looking at investing overseas, similar to the strategy of the Government Service Insurance System (GSIS).

SSS president and chief executive Emmanuel F. Dooc noted that while the SSS was allowed to undertake foreign investments, they have yet to actually do so.

“Based on the experience of the GSIS, which reported good returns, we will also consider that,” Dooc said.

Dooc said the SSS already got in touch with some investment advisers from abroad.

“For diversification purposes, we don’t like to restrict our investments in one basket, in the local economy, in domestic investment,” Dooc pointed out.

As early as four years ago, the SSS had planned to hire local fund managers as part of its move to increase its exposure in the domestic capital market.

However, the plan to tap two to three fund managers to manage P1 billion in investments each did not materialize.

Last month, the GSIS announced that it was 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 its rate of investment returns.

Based on its multiasset strategy, GSIS said that tapping external fund managers would allow the pension fund to “take advantage of diversification and opportunities for higher returns.”

The external fund managers will acquire, manage and dispose the assets of the multiasset strategy fund in accordance with an investment management agreement consistent with the guidelines for the multiasset mandate, GSIS said. Except as otherwise provided in their agreement, GSIS said the fund manager would have full discretion over the management of the fund.