GSIS seeks fund managers for its $400-M global investment program

The Government Service Insurance Service (GSIS) said it would tap fund managers to manage its $400-million global investment program.

The state-run pension fund manager said over the weekend that it would hire one or two fund managers to handle what is left of its $1-billion investment fund intended for offshore investments.

GSIS president and general manager Winston Garcia said the fund managers would be handing the remaining $300 million to $400 million portion of its $1 billion global fund.

According to Garcia, GSIS is accepting proposals from fund managers until Aug. 1 which would be evaluated by the Bids and Awards Commission.

Garcia said that for GSIS’ global investments, the fund wants to obtain consistent positive investment returns with capital preservation and sufficient liquidity over a three-year period.

Garcia said the return on the fund in dollar terms should be at least an average of eight percent per year and should have an average volatility of not more than seven percent.

Under the GSIS criteria, bidders should have assets under management of at least $100 billion and its portfolio managers and analysts must have a minimum of 20 years cumulative professional experience in managing an absolute-return portfolio.

GSIS had already tapped ING and Credit Agricole Asset Management last year to manage an initial $300 million each from GSIS’s global funds for investments outside the Philippines. 

Garcia said GSIS wants to diversify its portfolio and invest a portion of its funds in foreign currency denominated investment instruments. This strategy would help mitigate risk, maintain a long-term outlook on the exchange rate, as well as take advantage of the opportunities in the global financial market.

Garcia said GSIS’s offshore investments allowed the pension fund to limit the losses from its equity investments despite the 30 percent drop in the equities market.

“Equities here have gone down by 30 percent but our investments abroad have gone down by only one percent,” Garcia said.

GSIS earlier decided to sell its shareholdings in a number of blue-chip companies and generated over P25 billion after unloading its interests in San Miguel Corp., Philippine Long Distance Telephone Co., and conglomerate Ayala Corp.

GSIS then increased its shares in the Lopez-controlled utility giant Manila Electric Co.