The Public Pension Agency (PPA), Saudi Arabia's second-largest pension fund, plans to boost its investments in real estate and has no immediate plans to exit any of its holdings in Saudi companies, the PPA's governor said on Tuesday.
The agency manages retirement schemes for Saudi nationals. It is one of the major investors in the local equity market, with 32 percent of its investments in listed equities and about 12 percent in real estate. It is also a major fixed income investor.
The PPA's governor Mohammad Al Kharashi said the fund paid out an average of SR4 billion ($1.1 billion) a month to about 1.1 million retirees and their dependants.
"We are open for more investments in real estate. We are open for any good investment opportunity," Kharashi told reporters on the sidelines of a conference in Riyadh.
On the stock market, he said: "We believe the market is a strong one and there is good support for some of the companies whether in the petrochemical sector, cement, banking.
"We are a long-term strategic investor and we look at these investments as attractive for us."
While some of the PPA's investments are made for dividends and others are for capital appreciation, "we are not under pressure to divest any of our stakes," Kharashi said.
On Monday the kingdom's Shoura Council, a body that advises the government on policy, suggested raising the retirement age for government employees to 62 from 60, a step which could reduce financial pressure on the PPA.
However, it is not clear if the suggestion will be adopted, and Kharashi said he did not know when the change might be implemented.
The PPA has not recently disclosed figures for its size but in its annual report published in May 2013, it said its local stock market holdings in 2012 reached SR41.8 billion.
The agency is the major backer of the King Abdullah Financial District, a huge real estate project, in Riyadh; Kharashi said total investment in the project had reached SR31 billion and that the first phase should be completed by the end of this year, after which leasing could begin.
"We expect payback (through rents) may be within 12 years," he said.
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