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(Bloomberg) — The head of the Philippines’ largest pension fund, which manages 1.7 trillion pesos ($30.3 billion) in assets, wants to pump more money into stocks while seizing opportunities to boost returns through investments and acquisitions. There is.
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The Government Service Insurance System, which provides pensions and benefits to more than 2 million public sector employees, is one of the largest in other states, according to GSIS President Wick Veloso, who previously served as CEO of HSBC Holdings’ Philippines unit. The company is reportedly considering partnering with the institution or even acquiring part of it. From 2012 to 2018.
Veloso, 57, who worked at HSBC for more than 20 years, has a wide-ranging commitment to transforming the nation’s top pension fund into an institution that maximizes government assets and helps improve public infrastructure, including transportation, in the process. We discussed plans.
“We want to review our investment policy guidelines so that we can flexibly take advantage of market opportunities,” Veloso said in an interview in Manila on Tuesday.
He plans to leverage his years of banking experience, including heading the Philippine National Bank, to take advantage of government idle land. He said improved incomes should increase benefits for government employees, including low-paid teachers, who make up half of GSIS members. Many of them rely on loans from loan sharks to make ends meet.
It also plans to acquire government companies and increase investment in listed companies. Veloso said these initiatives have been discussed internally and are embraced by the rest of the GSIS board.
Investment composition
He said he expects investments in infrastructure, power businesses, artificial intelligence and data centers to lead to higher profits. The fund also focuses on mid-sized gaming and consumer companies. GSIS can only buy shares in companies with a market capitalization of more than his P15 billion.
GSIS invests about one-third of its assets, or more than P500 billion, in bonds. About P250 billion is invested in stocks and another P250 billion in exchange-traded funds. Approximately P300 billion has been lent to state employees and P200 billion has been deployed in real estate.
Veloso said there was room to put more money into stocks, including foreign companies, without providing further details. “Our investment strategy is flexible. This approach has allowed us to diversify our portfolio,” he said.
Approximately one-fifth of the Fund’s investments are held in international assets.
GSIS reported a 70% increase in net profit to P113.3 billion and a 33% increase in revenue over the past year. And Veloso is confident the strong performance can continue.
He said the Federal Reserve is likely to start cutting key interest rates as early as the third quarter, and the Philippine central bank could follow suit.
“Once the market starts to feel some easing, everyone will be looking for yield. Players may push the PSE index to 8,000,” he said, referring to the Philippine Stock Exchange index.
–With assistance from Manolo Serapio Jr., Clarissa Battino, Cliff Venzon, and Andreo Calonzo.
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