Taiwan’s LIF takes back outsourced mandates
13 August 2013
By Asia Asset Management
Taiwan’s Labor Pension Fund Supervisory Committee (LPFSC) has decided to transfer up to NT$26 billion (US$866 million) of domestic mandates from outsourced managers to the Labor Insurance Fund’s (LIF) in-house investment division upon expiration of the contracts this year, according to a report from Economic Daily News.
The directive comes on the heels of a raft of recent scandals relating to the external asset managers of pension funds in Taiwan. Last November, allegations emerged that former ING Securities Investment and Trust management employees were making significant amounts of illegal money manipulating stock prices with assets managed for the Labor Pension Fund (LPF) and LIF.
Meanwhile, the LPFSC has also decided to bring to a halt the launch of new mandates to outsourced managers this year.
The LIF initially planned to build up a position of approximately NT$144 billion in Taiwanese equities, with NT$40 billion of the investments carried out through external fund managers. But, the LIF has already taken back NT$4 billion and NT$2 billion from Fubon and Allianz Global Investors, respectively, in April.
There remains another NT$20 billion worth of contracts for domestic mandates, overseen by Cathay, Uni-President, ING, SinoPac, and Fuh Hwa, that are poised to expire by the end of the year. The LPFSC said the committee may consider renewing the contracts if they manage to deliver returns of more than 7%.
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