State-run Social Security System (SSS) tapped nine (9) domestic fund managers to manage part of its Investment Reserve Fund (IRF) worth P7 billion to help improve pension fund’s earnings from investments.
SSS President and CEO Aurora C. Ignacio said the pension fund deployed P1 billion each for three Balanced Fund Mandates, three Pure Equity Fund Mandates, and one Pure Fixed Income Fund Mandate. An investment mandate is an instruction to manage the pool of capital or funds, using a specific strategy and within certain risk parameters.
Earlier, SSS opened the bidding to hire nine local fund managers to manage the P9 billion investible funds which are divided equally to three types of mandate namely: Balanced Fund Mandate, Pure Equity Fund Mandate, and Pure Fixed Income Mandate.
Ignacio said the local fund managers underwent an open and competitive bidding and transparent evaluation process. After the bidding process, only P7 billion was deployed to qualified fund managers.
Under the Balanced Fund Mandate, SSS selected the Rizal Commercial Banking Corporation, BPI Asset Management, and Trust Corporation and ATRAM Trust Corporation who will each manage P1 billion investible fund. For Pure Equity Fund Mandate, BPI Asset Management and Trust Corporation, Metropolitan Bank and Trust Company, and Philequity Management, Inc. will each handle P1 billion investible fund. Meanwhile, BPI Asset Management and Trust Corporation was entrusted to oversee P1 billion investible fund for the Pure Fixed Income Fund Mandate.
“The SSS management believes that it will benefit from the investment value-added services of the fund managers such as training, access to proprietary investment analysis and information and access to business analytics,” Ignacio said.
Under the old charter of the SSS, the pension fund is allowed to appoint local or foreign fund managers to manage the IRF.
SSS’ investment reserve fund as of the end of 2018 period stood at P495.6 billion wherein bulk of it, or 43 percent is invested in government securities, 19 percent in equities, another 19 percent in loans to members, 3 percent for bank deposits, 8 percent for corporate notes and bonds, 7 percent in real estate and 1 percent for mutual fund.
“The remaining P2 billion allotted for two local fund managers will be open for rebidding this year,” Ignacio said.