ASIA-PACIFIC - Malaysia's largest pension fund, the Employees Provident Fund (EPF), has formed a joint venture with Goodman to buy a portfolio of prime logistics assets in Australia.
The acquisition of a AUD400m (€317m) seed portfolio, comprising of six assets already owned by Goodman or its unlisted Industrial Australian Fund, is intended to be the first phase in the creation of what will eventually be a global portfolio.
The deal will use up some of the AUD500m of equity the joint venture can deploy, split 60/40 between EPF and Goodman. Goodman, which has assets under management of AUD18.9bn, will manage the partnership's assets.
In a statement issued on Tuesday, Dato' Shahril Ridza Ridzuan, deputy chief executive at EPF, said the agreement was part of a strategy to increase the RM488.5bn (€122.5bn) pension scheme's exposure to global real estate via agreements with sector specialists in possession of high quality portfolios. He indicated that alignment would be a criterion for similar partnerships in other markets.
Meanwhile, the EPF this week confirmed that it had increased its investment in global real estate and equities by $1.2bn (€960m). Posting investment income of RM7.74bn for the first quarter, up 18.5% from Q1 2011, chief executive Tan Sri Azlan Zainol said he planned to step up investment in overseas real estate and infrastructure "taking into consideration the right opportunities, market movements and directions". He said overseas investments would make between 18% and 19% of the portfolio by the end of 2012.
Zainol attributed the pension fund's first quarter investment performance to profits taken on equities early in the year. However, he cautioned that the portfolio's weighting in low-risk, low-yielding fixed income assets would make it difficult to maximise performance in future without an increase in global exposure.
"Diversifying our investment strategy globally has become essential given the domestic constraints in terms of limited investment products and liquidity to trade in large volumes with the home market simply being too small to absorb all our investments," he said in a statement. |A balance needs to be achieved between what is lucrative and what is safe given our risk-return appetite as a retirement fund."