KUALA LUMPUR: The Retirement Fund (Incorporated) (KWAP) plans to achieve RM200 billion target in total gross fund size by 2025 from RM159 billion currently through increasing its investments in the private market, which include equity, infrastructure and property domestically and internationally.
KWAP CEO Nik Amlizan Mohamed said it is seeing double-digit growth of return in the private market space while the return from the public market has not been on a high trajectory.
“Currently our asset allocation is towards the public market, that is listed equity as well as the fixed income space. Moving forward our focus is very much on the private market side,” said Nik Amlizan at the launch of KWAP’s three-year programme Teras 5 today, which was officiated by Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
Currently, KWAP’s public and private investment portfolios are at 90% and 10% respectively. Through Teras 5, it plans to increase its private investments to 20% by 2025.
Nik Amlizan disclosed that KWAP intends to stretch the total return to 7% in three years from 6%, which was its return a year for the past 10 years.
“Teras 5 is part of our long-term plan to increase the size of the fund more effectively and sustainably and further strengthen KWAP's capability to benefit government retirees at present and in future,” she said.
The programme is based on elevating five enablers, namely structure, governance, people, processes and digital to drive eight workstreams, including organisational structure, enterprise, investment, contribution and retirement services, digital, people and culture, corporate services, and risk, governance and oversight.
Nik Amlizan shared that the programme was entirely developed by the KWAP team with no involvement from external consultants.
Earlier, Tengku Zafrul said its ministry is confident that KWAP can increase its number of property assets to over 30 from 17 and have more than 35 subsidiaries by 2025.
KWAP was appointed by the Public Service Department in November 2015 as the agency to process post-retirement services. They include payment of pensions, rewards and other benefits to retirees.
