The Employees Provident Fund of Malaysia (EPF) is looking to diversify across geographies and sectors, as it moves away from investing in traditional asset classes in some of the gateway cities in Europe.
Speaking to PERE on the sidelines of the PERE Global Investor Forum in Hong Kong, Kamarulzaman Hassan, head of global real estate, private markets department at EPF, said that with low returns in cities such as London, the firm is now branching into other regional cities overseas.
“There is a lot of capital chasing assets in Tier 1 cities. [So] to achieve our investment returns, we need to be competitive and move beyond our comfort zone and look at diversification,” he said. “You haven’t seen us in the headlines in the past 24 months. We are now looking at other parts of the world to find our returns.”
This strategy is being employed in Asian markets too. Hassan spoke of how the EPF has been investing in core markets like Tokyo, but, at the same time, also moving into regional cities like Osaka and Fukuoka in search for higher returns. And he added that diversification in real estate is also being led at a, with the firm actively seeking investments in specialized sectors.
He went further: “When we look at non-gateway cities, we are shying away from office buildings…,” he said. “A lot of people will start with [investing in] offices, but we are very comfortable with our investments in hospitals, where you can get better returns without high risk. We also have a big portfolio in logistics and hypermarkets.”