UK PRESS: China Close To Investing Pension Fund Overseas
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NEW YORK (Dow Jones)--China has asked foreign institutions to apply to manage its holdings overseas, bringing closer formal approval for billions of dollars of pension funds to be invested in foreign stocks and bonds after nearly six years of debate on the issue in China, the Financial Times reported Monday on its Web site.
The National Social Security Fund, established in 2000 by the central government as a kind of pension fund of last resort, said in a notice on its Web site that foreign managers could apply for mandates to invest its money by the end of June, the FT reported.
The fund had total assets of $26.5 billion by the end of 2005, with only a small proportion, $1.57 billion, held overseas, the newspaper said.
Much of the NSSF's assets have been raised through a government policy which directs state-owned enterprises listing overseas to set aside 10% of the proceeds to go into the fund's coffers.
Although the NSSF's funds overseas are relatively small at the moment, they are expected to grow gradually in coming years to become a much-sought mandate for investment managers.
According to the FT, the fund has laid out a series of rules for investing its money offshore, stipulating that any approved managers must have had at least $5 billion under management for the past year, a relatively small amount, and have been operational for six years.
For the first time, the rules posted on the NSSF's Web site also lay out in detail the rates of return that the fund expects its managers to achieve through its investments in both stocks and bonds.
(END) Dow Jones Newswires
May 01, 2006 13:49 ET (17:49 GMT)
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