GLOBAL - Malaysia's Retirement Fund (KWAP) is reviewing its strategic asset allocation and studying the feasibility of commitments to the UK market, according to IPE sister publication IPA.
Speaking at the Pacific Pension Institute's annual forum, co-hosted in Kuala Lumpur with KWAP, chief executive Azian Mohd Noh said: "Definitely, we have to look into more diversification. We are very mindful of the global economic condition, the fluctuation in local currencies and the risks that come with it.
"We are looking at it, but we are taking baby steps. We are a pension fund, so we have a rather conservative investment strategy."
KWAP has MYR77bn (€18bn) in assets under management, of which 90% is in domestic assets - the rest is overseas.
It has invested in real estate and private equity funds in London, Australia, Indonesia, Thailand and India.
Mohd Noh said: "About one-third of KWAP's assets are invested in equities, and the majority in fixed income, including government and private debt securities.
"It needs to have a bigger allocation for fixed income because it relies on the coupon payments to finance pension liabilities."
The pension fund may consider boosting equities "if there is a need to do so".
"This is the challenge we are facing now because the equity market and the fixed income market are moving in the same direction," Mohd Noh said.
"We're starting with the London market first, and eventually we would probably cover Europe as well.
"This is the best time to start thinking about it because the market is very volatile now. If we can put infrastructure in place now, we will be ready when the market is more palatable for us to enter."