SANDTON, South Africa - The AECI Pension Fund will invest up to 10% of its 4.4 billion rand ($942 million) in assets abroad, said Louis J. van der Walt, deputy manager.
However, Mr. van der Walt said the chemicals company pension fund will eschew asset swaps, the vehicle South African funds now must use to gain significant foreign exposure.
(In an asset swap, a South African institution is required by law to exchange an equal amount of domestic securities for foreign securities, thus preserving the country's narrow currency reserves.)
Instead, fund officials will await easing of exchange controls by the South African Reserve Bank. Mr. van der Walt said he hopes controls will be liberalized by the end of this year or early next year.
AECI fund trustees have engaged TriStar International Consulting Ltd., Constantia, to advise on the fund's international diversification and selection of managers.
The fund's roughly 75% domestic equity exposure likely would be reduced to fund international equity investments, Mr. van der Walt said.