Private Pension Fund 2015: Jardine Matheson
AsianInvestor’s second annual Institutional Excellence Awards were introduced to highlight best practice, with awards handed out in 17 categories.
Hong Kong's Jardine Matheson demonstrated the ability to find appropriate instruments to access opportunities including considered moves into alternatives to be named private pension fund of the year.
The winners were announced on October 30 and received their awards at an exclusive ceremony and dinner on December at The South Beach hotel in Singapore.
We thank all those who contributed their thoughts to these awards. The full list of write-ups appears in the December issue of AsianInvestor magazine, and more details of our decision-making process can be found here.
Pension fund, private sector
Jardine Matheson
The world of private-sector pension funds in Asia is small, and best practices are often shared at a local level.
Jardine Matheson is responsible for the pensions of 35,000 employees in Hong Kong, of whom most are still in defined-benefit plans. It has gone the extra mile in terms of education, investment capabilities, plan organisation and governance.
The fund’s executives admit that at times the structure doesn’t lend itself to fast decisions when, perhaps, one is required to take advantage of market conditions. They have reacted by finding appropriate instruments, such as exchange-trade funds, to access opportunities without breaching the fund’s mandates or basic protections.
More gradually the conglomerate has made considered moves toward alternative investments. It is not a pioneer among Hong Kong investors, nor among private-sector funds at a regional level, but it has made concrete steps in the past few years toward ensuring its investment strategy is built for purpose in a world where traditional securities markets are not providing sufficient returns on investment.
The nature of employees across Jardine Matheson’s many businesses, which range from fast-food restaurant franchises to hotels to construction and engineering companies, calls for a more sophisticated approach than lumping everyone in the same type of plan.
The executives have been addressing this in order to increase suitability. They have also embarked on training for older employees nearing retirement, to get them thinking about how to manage their pension proceeds.
The heart of what enables Jardine Matheson to manage the complexity of both its corporate structure and its investment policy is its reliance on an outsourcing model. The management realises it is not a professional investor, and so it relies on partnering fund managers, custodians, administrators and trustees.
This, in turn, can create a complexity of its own, because the company must engage with more than a dozen counterparties. It is here where the executives’ time is mostly spent: ensuring the platform is sound, the governance is appropriate, and freeing their time to be more nimble when markets demand a response.
Winners previously unveiled:
Reserves manager: Monetary Authority of Singapore