At a time when Asia Pacific’s pension funds need to modernise, expand and improve, having high calibre professionals in key roles will be vitally important.
For that reason, AsianInvestor has consulted leading pension fund experts, consultants, custodians and fund managers to put together a list of 20 pension executives who stand out in their field. The list, which has been rolled out online over the last couple of weeks,is not ranked. Nor is it intended to be exhaustive. But hopefully it highlights why these particular executives in the region have so impressed their peers, business partners and colleagues.
You can also find out more about the rationale for our list. Today, we move on to executives from China and Malaysia.
Chairman, National Council for Social Security Fund, China
In 2016 China’s National Social Security Fund (NSSF) saw annual returns collapse to a paltry 1.73% from 15.19% in 2015, amid lacklustre domestic stock market performance. Lou Jiwei (pictured), the former finance minister who was newly appointed to chair its governing body, the National Council for Social Security Fund, reacted swiftly. Under his leadership, the fund has sought to gradually diversify into overseas investments.
Given Lou’s history with China Investment Corporation (CIC)—he chaired the sovereign wealth fund from September 2007 to March 2013—it’s no surprise he is pushing for investments such as private equity. CIC had about 37% of its portfolio in alternative assets at end-2016. Lou also said the pension fund would explore fund of funds and high dividend domestic stocks, and boost its global bonds portfolio. NSSF’s annual report showed overseas investments made up 6.6% of total investable assets in 2016, up from 5.9% the year earlier.
Lou has presided over greater externalisation of NSSF’s assets too. In August, it selected four asset managers to manage its Rmb15 billion ($2.23 billion) equity portfolio under the new Public Pension Fund (PPF) scheme. The fund is also embracing factor investing; in June 2017 NSSF published a report on China’s stock market, arguing index-based factor investing would become a trend for asset owners with lower risk appetites, such as pension funds.
SHAHRIL RIDZA RIDZUAN
Chief executive officer, Employees' Provident Fund, Malaysia
The drive to keep progressing is one of the notable features of Malaysia’s Employees’ Provident Fund (EPF), according to industry observers.
One of the visible ways in which it has done that is by whole-heartedly embracing technology to streamline its internal operations and processes as well as to interact with members.
Much of the credit goes to CEO Shahril Ridza Ridzuan, who has been aggressively driving EPF towards becoming a digital-savvy organisation—no mean feat in an industry where even many large global pension funds have been slow to adapt to technological developments.
Today, close to 70% of EPF’s transactions are carried online, according to Ridzuan.
Indeed, he believes one of his most notable accomplishments since he took over as CEO in 2013 is to transform EPF from a stodgy, old-world institution into Malaysia’s largest digital organisation.
The biggest challenge has been to align employees with the new way of doing work as well as interacting with members, he told AsianInvestor.
Close to half of its total assets are currently sharia-compliant, said Ridzuan.
He also views sharia as a subset of the broader environmental, social and governance (ESG) arena, and is quite conscious about the issue of sustainability in investing.
“We are very engaged with the companies we invest in and in finding out what their approach is to sustainability,” he said.
On January 1, 2017, EPF became the first pension fund to offer sharia-compliant savings options to its members.
The pension fund is also very committed to diversity—it has four women on its board and one on its investment panel—in an industry that has traditionally been dominated by men.
It has also focused on improving its governance by creating a corporate risk scorecard methodology. The system assesses and details the risk of management actions, senior individuals and divisions.
Before joining EPF, Ridzuan served as managing director of Malaysian Resources Corporation Berhad, a construction company and property developer.