How Thailand’s GPF leverages tech and data to invest
Thailand’s Government Pension Fund (GPF) has seen its investment portfolio offer promising returns after it adopted a new data technology platform. The pension fund’s move is in tandem with other institutional investors such as Ping An Group and Malaysia's Permodalan Nasional Berhad, which are also ramping up efforts in building data infrastructure.
GPF recently deployed the new analysis tool, known as cross-asset valuation model tool (Cram), which enables the pension fund to make investment decisions based on data and insights from internal teams as well as external asset managers in a more convenient way, Srikanya Yathip, secretary-general of GPF, said in a webinar hosted by AsianInvestor in partnership with BNY Mellon on Thursday (September 24).
“The good news is [since] we’ve been using the tool, our portfolio looks better," she said. We make positive returns from asset classes and asset allocations that we have overlooked or disregarded before, she added. However, she declined to give numerical figures on how much the performance of its portfolio has improved since adopting the tool.
GPF had Bt382.12 billion ($12 billion) of assets under management as of the end of 2018.
Cram aggregates views and data from multiple sources onto one platform. It essentially forms an ecosystem based on the macro picture, external data, the micro view from the inside and proprietary data — all of which GPF uses to make investment judgements, Yathip said.
The platform can also provide an analysis of the markets based on three types of inputs, namely the fundamentals of the macroeconomy, the valuation of assets and the dominant market sentiment of the asset class in which we are investing. The last one is a model to identify the greed and fear environment of the market, representing how investors might behave, she said.
Before using the tool, achieving a “return had been a little bit tricky,” she said
The Thai pension fund is not alone in striving to improve performance by leveraging data, Rohan Singh, global head of asset owners and Asia Pacific head of asset servicing at BNY Mellon, said in the same webinar discussion.
“We see a tremendous amount of uptick both in terms of just aggregation, mastery, sourcing of data, and then taking it to the next stage, which is information and insights,” Singh said.
There are challenges. Some organisations move at a greater speed than others, but they are looking at solving problems through data and recognising that legacy infrastructure is in the way. It’s becoming a strategic priority and getting onto the agendas of chief executives, chief investment officers and investment boards, he said.
COLLABORATION AND CULTURE
Yathip also believes that adopting technology to digitise investment operations require a collaborative environment and a tech-driven culture.
"While we pay attention to being digital-first, in my view, it has to be embedded in the working culture and behaviour, she said, adding that the pension fund is now using technology as a tool for collaboration.
“If you want to be digital-first, you should not rely merely on advanced technology. You have to build on collaboration, a technology-driven culture, and then technology will better serve its intended function,” Yathip added.
GPF recently included a technology-driven collaborative platform in its three-year plan. The platform, which has been in use for three months, functions similarly to Microsoft Teams and results in more efficient and interactive discussions.
"Instead of sending emails and then check the mail as they arrive, we use the platform for collaborative meetings," Yathip said.
RETAINING TALENT
During the webinar discussion, the experts also shared their views on how to retain and engage the best technology talents.
GPF assigns them challenging jobs and offer them career paths and opportunities. Besides, the staff feel proud to work for the biggest pension fund in Thailand, Yathip said. GPF is continuing to expand its in-house team, as part of its ongoing efforts to diversify its investment portfolio better.
Yathip’s view was echoed by Jonathan Larsen, chief innovation officer of Ping An Group, and Encik Muzzaffar Othman, chief technology officer of Permodalan Nasional Berhad (PNB).
“People [who] work for us, they all know that they’re going to be working on something that’s going to get notched and delivered. We don’t succeed every time we create something new. But in any case, we do, I think, create an exciting environment for people,” Larsen said.
PNB is one of the biggest asset managers in Malaysia. It provides scholarships to students who go to prestigious universities abroad. This social corporate responsibility initiative also helps PNB recruit talents, Othman said.
Please look out for a recording of the webcast 'The Investment Processes of the Future', to appear very shortly. If you have not yet registered for the event, you can do so here to receive the on-demand recording, once available.