AUSTRIA – APK, the Austrian multi-employer pension fund, is looking to increase its allocation to emerging market equities and bonds “step by step”.
Head of investments Guenther Schiendl said on today’s IPe-symposium that he was “very much convinced of the Asian growth story”.
This has led to an allocation toward the region of about 30%-35% within the overall equities portfolio. APK structures emerging markets equities within its regional basis.
“We are optimistic about a continuation of the emerging markets equity story,” he said – adding there were economic and strategic grounds for investing. “We like central and eastern Europe – it’s likely our allocation will increase.”
And he said the current 10% exposure, within the bond portfolio, to emerging market debt would “increase further step by step”.
“This strategy more of a fundamental part of bond strategy. So I think both allocations, both equities and fixed income will increase step by step.”
Schiendl told the online event that he was motivated by “capturing the long-term population dynamics that will lead to economic dynamics". This is our main driver for allocating to emerging market equity.”
He saw less risk in emerging markets as countries and economies mature.
Schiendl also discussed other emerging market areas such as commodities and real estate. For the former, APK was ‘ate to the commodities party” and real estate had issues with accessibility and vehicles.
But infrastructure was a possibility, as it had some private equity-like characteristics and had some connection to the underlying economics.