HONG KONG: Malaysia's largest pension fund is looking to diversify its investment portfolios in a bid to boost returns, according to chief executive officer Datuk Shahril Ridza Ridzuan.

The Employees Provident Fund (EPF) planned to invest more in private equity, property and infrastructure, said Shahril on the sidelines of the Bloomberg Markets Most Influential Summit, here, yesterday.

In the next three to four years, the fund was aiming to boost investments in the three segments so they accounted for about 10 per cent of total assets, compared with more than six per cent currently, he said.

"From our last six to seven years of experience looking at these assets, we're now fairly convinced that they are viable asset classes, which will help us to meet our inflation-hedging targets.

"Our long-term plan, our long-term target is to really provide a real rate of return. In order for you to do that, you need to have inflation-hedged assets."

Investors the world over are struggling to generate returns with interest rates near record lows hurt bond returns, and elevated volatility in stock markets. Singaporean investment firms GIC Pte Ltd and Temasek Holdings Pte Ltd are both bracing for lower returns amid global uncertainties and modest growth.

EPF has almost US$170 billion (RM700.6 billion) of assets. Fixed income accounted for almost 52 per cent of its investment assets as of June, while equities represented 41 per cent.

Shahril said EPF was constantly on the lookout for property assets in the United Kingdom as other investors sought to exit after the country voted to withdraw from the European Union. The fund, which had a UK property portfolio worth more than £2 billion (RM10.7 billion), was particularly keen to acquire real estate assets in the logistics and healthcare sectors, he said.

"For a long-term investor, you sometimes have to be counter-cyclical, that's what we tend to be. Typically, when markets suffer major corrections, we come in and buy heavily," he added. Bloomberg