EPF applies US sovereign status for investment opportunities

Securing a sovereign status will allow EPF to be more effective in investing in the US


The Employees Provident Fund (EPF) has applied for sovereign status in the US, to enable the pension fund to further penetrate investment opportunities into the developed economy.

EPF CEO Datuk Shahril Ridza Ridzuan

EPF does not want to predict the outcome as it is solely dependent on the Us administration, says Shahril Ridza (Pic by Muhd Amin Naharul/TMR)

EPF CEO Datuk Shahril Ridza Ridzuan said the government had submitted an application on behalf of EPF for the pension fund to be accorded a sovereign fund-status in the US.

“The Malaysian government has been talking quite closely to the US counterparts about our application to be a secure sovereign status which will allow us to be more effective in investing in the US,” he told reporters on the sidelines of the Invest Malaysia 2018 conference yesterday.

Shahril Ridza said a sovereign status will enable EPF to enhance activities in the US, including to add infrastructure and real estate investments.

Infrastructure and real estate investments fall in favour of EPF’s current appetite, he said.

“Global assets account for about 30% of our total assets under management, and the US is obviously one of the biggest markets that we have.

“The US market is very deep, so we are ready to do a lot more in this market, especially in infrastructure projects which is a major priority for the current US administration, as well as in the property space,” Shahril Ridza explained.

While the application was made sometime ago, Shahril Ridza said the government had highlighted the application to the White House during Prime Minister Datuk Seri Mohd Najib Razak’s working visit to the US last September.

“It was a matter that was raised in the (government’s) last trip to Washington DC and we are now waiting for that to be resolved.”

Shahril Ridza said the EPF does not want to predict the outcome as it is solely dependent on the US administration.

“It is not in our hands. It is in the hands of the US government and we are waiting just like everyone else,” he said.

As EPF is focused on efficient investor returns, he said the fund is looking at inflation-adjusted assets in the US.

“At the same time, we are also working with our counterparts in the US who are interested in investing in South-East Asia.

“We have actually been working with them to bring money into this part of the world. I think, the world for institutional investors today is very much about forming partnerships with co-investors and similar- minded funds as a way of spreading risk and finding more opportunities.”

Prior to this, Shahril Ridza had expressed interest for EPF to invest in the US, particularly in infrastructure projects, keeping its investments in Tenaga Nasional Bhd and PLUS Malaysia Bhd as benchmarks.

The only hindrance faced by EPF to acquire assets in the US is the current tax structure that could be unfavourable to the pension fund.