KUALA LUMPUR – Permodalan Nasional Bhd (PNB) plans to accelerate the diversification of its portfolio by meaningfully increasing the percentage of global investments across all asset classes going forward.
Chief executive officer Datuk Abdul Rahman Ahmad said having formulated PNB’s Strategic Asset Allocation Framework in 2017, it continued to judiciously redeploy surplus cash into fixed income securities and global assets in 2018.
“Our portfolio’s allocation to global assets rose to 3.3 per cent as at end-2018 from 2.4 per cent in 2017, with approximately RM2 billion being invested outside the country during the year,” he said in PNB’s 2018 Annual Report released today.
On the private investment front, he said PNB built upon the foundations of its Private Investment Framework to focus on constructing a robust plan to significantly deploy into private equity assets through a structured outsourcing programme.
“By having a clear and effective structure for identifying, evaluating and selecting the best global private equity fund managers operating in the market segments that suit PNB’s risk appetite and return expectations, we believe that we can optimise the returns that we expect to generate from this asset class.
“We have identified six highly reputable global fund managers for the first phase of this programme, and we anticipate that deployment into global private equity assets through these funds will be well under way and further expanded in 2019,” he said.
In 2018, PNB managed to deploy more than RM3 billion into additional fixed income investments, increasing its allocation to 6.5 per cent of the total portfolio from 5.8 per cent in 2017.
Furthermore, he said, PNB’s diversification strategy this year includes enhancing its property investments, as it believes that the opportunity in real estate lies globally and in certain segments such as logistics.
He said in 2019, with the Real Estate Investment Framework in place, PNB plans to enable its unit trust funds to gain exposure to the real estate asset class by investing into global property funds.
“Just as with Private Investment, PNB will be guided by a robust framework and process to ensure that we are able to select the best global managers with solid track records and deep expertise in the risk strategies and geographies that fit our investment profile.
“By investing in these funds or similar real estate-based investment vehicles, our funds will be able to access a sound potential source of recurring yields, whilst also benefiting from future capital gains in buoyant markets,” he added.