GSIS eyes $1.1 B offshore investments

MANILA, Philippines — State-run Government Service Insurance System(GSIS) plans to invest about $1.1 billion abroad as it aims to diversify its fund placements, in a bid to cushion it from volatile domestic market conditions.

In a forum Wednesday, GSIS president and general manager Jesus Clint Aranas said the fund is studying ways to diversify its investment assets, particularly through offshore investments.

“We are looking out to the world. You cannot put all eggs in one basket,” Aranas said, adding that foreign investments could offset potential losses in the local stock exchange.

He said the GSIS is looking at the global market considering that the local bourse is not performing up to par.

“So we have to make sure that the fund will remain liquid because if it drops, like the valuations of the stocks we have right now, it reflects on our financial statements,” Aranas said.

He said they are still keen on investing an initial $800 million in a multi-asset global strategy program overseas.

Aranas said they are still in the process of evaluating fund managers for the investment, particularly selecting those with a proven track record and a global presence.

He said about 40 potential fund managers have submitted applications.

“We want to invest, but we’re looking at the resumes right now. We want to make sure that they are really qualified,”Aranas told reporters on the sidelines of the forum.

Aranas said the GSIS aims to finish the evaluation process within the year, but emphasized that it does not mean the $800 million investment will be deployed right away.

In the same forum, Aranas disclosed that the GSIS has also committed to invest $300 million in an Asia infrastructure fund.

“Basically the fund that we invested in is a commitment at this point. It’s called Macquarie Asia infrastructure fund and it is committed to invest in Asia infra assets,” GSIS senior vice president for the financial management group Gracita Gilda Bocanegra said.

The $3.3 billion Macquarie Asia Infrastructure Fund (MAIF2) is a private fund vehicle intended to finance infrastructure projects in Asia.

Bocanegra said like in any private equity fund, it starts as a commitment, then the general partner would survey and consider the potential investment opportunities.

“They will only ask us to invest when there is investment opportunity. I think we deployed some already,” Bocanegra said without specifying how much was deployed.

As of May 2018, GSIS has total assets amounting to P1.8 trillion.

The GSIS chief said $800 million only amounts to less than 10 percent of the pension fund’s total investible fund.

At present, the GSIS has deployed around P500 billion worth of multi-asset investments, which were accumulated over a period of time.

This includes investments in local securities, bonds, infrastructure, among others.

Asked if the GSIS will invest in public private partnership (PPP) projects, Aranas said they are open to it.

“[It] depends on the terms of the contract. But we have the appetite for investment,” Aranas said.

“Any project that comes our way that will bring returns, quantifiable returns, we will invest,” he added.