KUALA LUMPUR: The Employees Provident Fund (EPF) is prepared to increase its investments in shariah-compliant private equity (PE) funds, said its Investment Deputy Chief Executive Officer, Datuk Mohamad Nasir Ab Latif.
He said, however, there was a limited number of the said funds.
Mohamad Nasir said the pension fund has not met its full asset allocation target for its PE segment.
“We have allocated 10 per cent of our investment in the alternative space which consists of infrastructure and real estate.
“Our PE investment is currently at four per cent and only half of which are in shariah-compliant funds,” he said, adding that there was a shortage of such funds in the domestic and international markets despite an increase in demand from Muslim countries.
He said EPF would continue to invest in both shariah-compliant and conventional funds concurrently. “The main challenge lies in finding shariah-compliant PE funds.
“We will keep increasing our investments in conventional funds, and we would like to encourage more shariah-compliant funds to be available in the market,” Mohamad Nasir told Bernama on the sidelines of AVCJ Private Equity Venture Forum – Malaysia here today.
For the second quarter ended June 30, 2017, EPF’s shariah-compliant savings accounted for RM820.71 million out of RM11.51 billion of its total investment income, while RM10.69 billion was generated from its conventional savings.
Shariah savings derived its income solely from its portion of the shariah-compliant assets, while income from conventional savings was generated by its shares of both shariah-compliant and non-shariah-compliant assets.
As of Dec 31, 2016, the value of EPF investment assets rose by 3.92 per cent year-on-year to RM759.78 billion from RM731.11 billion.
Out of the total investment assets, 47.71 per cent were shariah-compliant investments and the balance were invested in non-shariah-compliant assets.