MoF confident KWAP to grow RM200b fund by 2025

by ANIS HAZIM / pic source: kwap.gov.my

THE Ministry of Finance (MoF) is confident in Retirement Fund Inc’s (KWAP) plans to grow its gross fund size to RM200 billion by 2025.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that KWAP continues to deliver its mandate for the pension ecosystem in Malaysia as an extension of the government’s service to pensioners.

“I am pleased KWAP has achieved a record fund size of approximately RM159 billion as at end 2021 and today with the launch of Teras 5, KWAP intends to realise its vision to grow its gross fund size to RM200 billion by 2025,” Tengku Zafrul said in his keynote speech at KWAP Teras 5 launch today.

Since its inception in 2007, KWAP has tripled its investment portfolio from a fund worth RM9 billion in 2007 to around RM159 billion today.

The three-year Teras 5 programme will be elevating five enablers, namely structure, governance, people, processes and digital, that will drive eight workstreams including organisational structure, enterprise, investment, contribution and retirement services, digital, people and culture, corporate services, as well as risk, governance and oversight.

“Through Teras 5, MoF is confident that KWAP will be able to increase its total assets from 17 to more than 30, as well as over 35 subsidiaries by 2025,” he said.

The minister said that KWAP’s future journey will open up spaces and opportunities to advance Malaysia’s retirement fund ecosystem and create long-term sustainability.

Meanwhile, KWAP CEO Nik Amlizan Mohamed said that Teras 5 transformation plan aims to “fast track” in expanding the group’s fund size by 2025.

“The target to achieve RM200 billion by 2025 is via multiple prongs — first via diversification as we notice that currently, our asset allocation is towards the public market,” Nik Amlizan said in a press conference.

Currently, 90% of asset allocation is in the public market, while the remaining 10% represents the private market which KWAP targets to grow by 20% by 2025.

“Moving forward, our focus is very much on the private market side — there are three different asset classes as identified by KWAP, including private equity, infrastructure and property,” she noted.

Nik Amlizan announced that the fund has recorded its highest net income (unaudited) in 2021, amounting to RM10 billion.

“This (RM10 billion net income) is the amount that we intend and hope to emulate going forward,” she added.

Nik Amlizan is optimistic on the group’s performance and believes KWAP can achieve higher net income in 2022 as it has surpassed stellar net income last year during the Covid-19 pandemic and uncertain market conditions.