In Taiwan, Bureau of Labor Funds (BLF) has been known as one of the largest asset owners with total assets nearly US$ 200 Billion (exhibit 1). BLF is the most active pension institution and has been recognized as the pioneer of sustainable investing. The most iconic Fund managed by BLF, Labor Pension Fund (LPF), grows its asset steadily and announces public mandate at least once a year. However, in terms of alternative investment, only real assets and slight investments on private credits were deployed by BLF. As the most well-known asset owner in Taiwan, BLF has not yet delved into private equity investment.
Exhibit 1 – Pension Fund Total Assets (in US$ Million)
Source: BLF & PSPF, as of 2023/06 Navigate consolidate.
*LPF(Labor Pension Fund), LRF (Labor Retirement Fund), LIF (Labor Insurance Fund), NPIF (National Pension Insurance Fund), Public Service Pension Fund (PSPF)
In Fact, both BLF and another pension fund, Public Service Pension Fund (PSPF) aim to increase alternative investments by launching alternative investment mandates, in recent years. Although the proportion of allocation in alternative investment gradually increases (Exhibit 2), the guideline of the mandates still confine asset managers to invest in listed market (listed Infrastructure equity & listed REITs). Given the sophisticated nature of the PE strategies, public institutional investors remain cautious with PE investing.
Exhibit 2 – Mandate Asset Allocation 2016 – 2023/06 (in US$ Million)
Astonishingly, Public Service Pension Fund (PSPF), which is viewed as the follower of BLF in investment management, takes a huge step ahead in PE Investing. Besides a small portion of PE investments and mandates to alternative assets such as listed REITs and infrastructure, to complement its allocation in alternative investments and avoid volatility of the listed market, PSPF will be announcing private equity fund of fund mandate in early 2024.
Coincidentally, another largest asset owner, Chunghwa Post, is planning to launch a global equity mandate in 2023Q4, which is the first offshore mandate after a decade. Although it manages over US$ 250 Billion assets, unlike BLF and PSPF, Chunghwa Post does not actively seek for offshore investment opportunities but deploy most of its assets domestically with money market instruments and bonds. The incoming global equity mandate will be a rarely seen chance for offshore managers to lure its eyes.
Exhibit 3 – Chunghwa Post Total Assets (in US$ Million) 2018 – 2023/06
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