China's ＄14.9 Billion Pension Fund Seeks Overseas Mangers
05-23 17:00 Caijing Magazine

The National Social Security Fund eyes overseas equity after domestic stock markets shrank by half since October.
By staff reporter Wang Zhen

China's national pension fund is looking for managers of ＄14.9 billion in overseas assets, which make up one fifth of its ＄74 billion portfolio.

Last year, the National Social Security Fund (NSSF) reported earning more than 100 billion yuan (＄14.4 billion), mainly from the domestic A-share market. Because the domestic market has shrunk to half of its October peak, the Council May 23 said it would diversify its investment portfolio.

According to the job posting, the new hires will manage five different active equity portfolios. These will include overseas, Asia-Pacific (excluding Japan), European, global, and emerging markets. Applicants should have at least ＄5 billion in assets under management and more than six years of investment experience.

The vast majority of NSSF investment goes into domestic equity and fixed income at a ratio which it does not disclose.

But over the past year and a half, the Council has expanded its overseas portfolio in stocks, funds, derivatives and bonds. The fund first awarded ＄1 billion to 10 overseas asset managers in November 2006.

These institutions include major global players such as Allianz, Invesco, AXA Rosenberg, State Street Global Advisors, Alliance Bernstein, BlackRock and Pimco.

In April, NSSF Chairman Xianglong Dai said that the NSSF achieved annual returns of 10.7 percent from 2003 to 2007. The Council continues to value low risk more than high returns, he added.

Overseas investments are handled by three government entities: the NSSF, China Investment Corp. with ＄90 billion of the nation's sovereign wealth fund and the State Administration of Foreign Exchange with ＄1.68 trillion in foreign reserves.