Malaysia's Employees Provident Fund, or EPF, and Kumpulan Wang Persaraan (Diperbadankan), or KWAP, are looking to acquire minority stakes in foreign-owned insurers in the country, Bloomberg News reported Oct. 4, citing "people with knowledge of the matter."
The two pension funds have sought approval from the Malaysian central bank to initiate negotiations with potential targets. The funds are each looking to acquire a minority stake in one of the foreign-owned insurance companies in Malaysia.
The report came as foreign insurers weigh options for part of their stakes in their Malaysian subsidiaries to comply with a 70% ownership cap imposed by the central bank. Singapore's Great Eastern Holdings Ltd. is evaluating possible options for a minority stake in its Malaysian subsidiary, Great Eastern Life Assurance (Malaysia) Bhd., while U.K.-based Prudential Plc is said to be considering an IPO or a stake sale in its Malaysian unit in order to pare down its stake. Japan's Tokio Marine Holdings Inc. has reportedly appointed a bank to advise on options for divesting its stake in its local unit.
The Malaysian pension funds may also explore possible deals with several different parties before making a decision on pursuing talks with an insurer. However, deliberations are still at an early stage and a deal may not materialize, the sources said.
EPF and the central bank did not respond to Bloomberg's requests for comment, while KWAP told Bloomberg in an email that it "is considering available options and will go through the required process and procedures based on the determined guidelines."
In August, KWAP CEO Wan Kamaruzaman Wan Ahmad said the fund was considering investing in foreign-owned insurers based in Southeast Asia and had asked banks for pitches.