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GIC need not worries about any “net outflows” of its fund

It was reported that CEO Maarten Slendebroek of Jupiter Fund Management, one of the “crown jewels” of UK asset management industry, was replaced last month. He was replaced by ex-Janus Henderson Investors’ boss Andrew Formica.

Slendebroek was being replaced at a time when Jupiter had reported a £7.5 billion drop in assets under management and net outflows of £4.6 billion over last year.

In the 12 months to 31 December 2018, the group saw assets under management fall by 15% from £50.2 billion to £42.7 billion, which included the net outflows of £4.6 billion.

Profit before tax was also down £13.7 million to £179.2 million. Earnings per share decreased by 2.5p to 31.7p.

In his farewell letter, Slendebroek said, “2018 was not an easy year for Jupiter as we faced outflows from a key strategy and declining market valuations. As a consequence, AUM went down from their record high.”

GIC has little to worry about “net outflows” of its fund

On the other hand, the fund managers at GIC would have little to worry about any “net outflows” of its fund.

According to its website information, GIC’s fund comes (indirectly) from Singaporean CPF accounts. It said:

GIC, along with the Monetary Authority of Singapore (MAS), manages the proceeds from the Special Singapore Government Securities (SSGS) that are issued and guaranteed by the Government, which the CPF Board has invested in with the CPF monies. So while the CPF monies are not directly transferred to GIC for management, one of the sources of funds for the Government’s assets managed by GIC is the proceeds from SSGS.

The “proceeds” from the sale of SSGS, of course, come from CPF monies of Singaporeans. Singaporeans have no say with regard to the purchase of SSGS. So, through the SSGS mechanism, monies are thus transferred from Singaporean CPF accounts to GIC indirectly.

And hence, “investment monies” would constantly go to GIC every month from CPF.

As for monies flowing back from GIC to CPF, and then back to CPF members, it can easily be “regulated” with legislation by declaring higher minimum sums, which forces CPF members to keep a large part of their monies with CPF/GIC. Only a small sum of money can be withdrawn by CPF members every month after they hit 65 years old, and if they forget to inform CPF Board, it will be after 70 years old.

So, GIC CEO would not have Slendebroek’s kind of worries and need not worries about ending up like Slendebroek.