EPF to expand investments into infrastructure projects

KUALA LUMPUR: The Employees Provident Fund (EPF), which is acquiring a 40% stake in the operator of Duta-Ulu Kelang Expressway (DUKE), aims to expand its investment in infrastructure.
"EPF's investments are quite diversified and one of the areas that we are trying to grow is in the area of infrastructure because the nature of infrastructure investments are something that is very long term, it meets our risk return profile," said deputy CEO (Investment) Datuk Mohamad Nasir Ab Latif.
"These sort of investments have the potential to give us a real rate of return...our target is always to at least meet 2% real rate, meaning inflation plus 2%," he told reporters at the signing of a conditional share sale agreement (SSA) with Ekovest Bhd today.
EPF currently has RM690 billion worth of assets with a strategic asset allocation of 51% in fixed income, 36% in equities and 10% in alternatives, which includes private equity, infrastructure as well as real estate. It also has some amount in cash.
"We are always looking for opportunities in the infrastructure space. When you talk about infrastructure space, it is not just toll roads, it may be airports, ports or power plants," said Mohamad Nasir.
On whether EPF is keen to invest in the High Speed Rail project, he said it is always open to any proposition.
"We'll have to look at the economics of it and see what the returns are. We've not seen anything yet," he said.
EPF senior general manager of private markets department Mohamad Hafiz Kassim said the assets that EPF looks at typically have cash flow visibility and are brownfield in nature.
"Meaning, it is fully operational and has a track record in terms of traffic as well as regulatory framework in terms of payment and others," he said.