AsianInvestor's Top 20 pension executives in Asia list brings together an array of senior executives, from CEOs and CIOs to heads of responsible investing and equity chiefs -- change-makers who are leading the industry with their forward thinking and innovative practices.
As Asia faces a growing silver tide, it's imperative that the pensions industry takes steps to modernise and improve its operations to cater to increasing retirement demands. That will require skilled and talented professionals.
You can find more about the rationale for our Top 20 list here.
Today, we showcase top executives from Indonesia and Japan.
Director of Investment Development, BPJS Ketenagakerjaan
Indonesia’s social security fund, BPJS Ketenagakerjaan, has been making steady progress growing its assets under management – a testament to the increasing acceptance and accessibility of pension funds for workers in Indonesia.
Edwin Ridwan, director of investment development, is considered an apt choice to help the social security fund manage its investments more effectively.
Ridwan, who joined the social security fund in 2021, is considered a forward thinker by industry peers and investment consultants that AsianInvestor spoke to, with the ability to bring new ideas to the table to drive investments and generate better returns.
The $44.8 billion BPJS Ketenagakerjaan consists of five social security programs -- Work Accident Insurance (JKK), Death Insurance (JKM), Old Age Benefits (JHT), Pension Benefits (JP) and Job Loss Benefits (JKP).
When Ridwan joined the social security fund, there was a change in management and board.
The Board is appointed by the Indonesian president, usually for a five-year tenure.
And while incumbents can participate in the next selection process, a reelection to the positions will require going through the same selection process.
Ridwan, who is responsible for the investment side of the pensions, told AsianInvestor that the fund is looking at different ways to invest the money it receives as premia – something that independent experts AsianInvestor spoke to confirmed, noting that Ridwan is keen to be ensure better use of the funds the social security fund accumulates.
“Every month we receive about IDR7-8 trillion (about $470 million),” Ridwan said, adding that the fund is growing by 13%-15% every year, as a result of premia paid and investment returns.
And while increasing contributions are a heartening sign of a growing pensions industry, it’s also a challenge, said Ridwan.
“The challenge is to be able to deploy capital quickly enough because of the limited liquidity and growth in the local market,” he said, noting the social security fund could hit the IDR1,000 trillion-mark ($67 billion) in about three years.
Assets under management are mostly allocated to government and corporate bonds, said Ridwan.
He said the fund would like to invest more overseas – after getting the required approvals from the government.
If the approvals come through, the fund aims to up its private market allocations, especially private equity.
That’s in line with other regional asset owners who have lifted private market allocations over the past decade, as these assets have delivered double digit returns.
Like other developing countries, Indonesian social security programs are funded by participants limited mostly to workers in the formal sector.
“But that means only 20% of the total workers are under the scheme,” said Ridwan.
“About 80% of the workers still work for the informal sector. So we have to get them under the scheme and we are also keen to get gig workers under social security. These could be drivers, fishermen, etc, because universal coverage is our goal. That will be our next focus,” said Ridwan.
CIO & Executive Managing Director, Government Pension Investment Fund (GPIF)
One could argue that being in charge of investments at Japans’ Government Pension Investment Fund (GPIF), the world’s largest pension fund by assets under management, is probably one of the toughest jobs in the industry.
Even more remarkable is how Eiji Ueda, executive managing director and chief investment officer, is handling the role he took on in April 2020, when financial markets were in turmoil as COVID-19 was just turning into a global pandemic.
Ueda is credited with skillfully steering the fund's investments through the choppy financial markets of the past few years and a global pandemic, according to investment professionals AsianInvestor spoke to.
His steadying and improvement-oriented influence was confirmed in April 2022, when his term as CIO was extended for another two years until March 2024.
This time, his term kicked off with heigtened geopolitical tensions, rising inflation and climbing interest rates, creating a perfect storm for public markets where more than 98% of GPIF’s total AUM is invested.
After all its seven active foreign equity fund managers underperformed their benchmarks in the financial year ending March 31, 2022, Ueda, who was formerly co-head of Goldman Sachs’s Asia-Pacific securities division, spearheaded efforts to shake up the mandates.
The fund announced it had restructured its active manager lineup for foreign equities in January 2023, after awarding 19 new mandates heavily weighted to US-based money managers in October 2022.
AsianInvestor understands that there are further external manager changes and new mandate announcements in the pipeline.
Growing volatility in 2022 also prompted to undertake a rebalancing of various asset classes to manage risk.
Ueda is now maneuvering the fund so it has the liquidity and external managers at bay to rebalance especially passive investments on a monthly basis.
AsianInvestor understands that during the recent months of turmoil in markets, GPIF rebalanced its portfolio several times in a month - proving that while it is an investment behemoth, it remains fairly nimble.
Like many asset owners in the region, the pension fund has also diversified into alternatives.
While the fund has gradually accumulated alternative assets over the past few years to reach 1.43% of total assets, in absolute terms, that still represents ¥2.7 trillion ($19.47 billion) in investments.
Since the fund made its initial infrastructure investments in 2014, the scope of alternative investments’ has evolved from fund-of-funds mandates to direct investments via single fund vehicles and vehicles with other asset owners as limited partners.