Private companies outperformed National Bank in asset management in Kazakhstan

According to the Unified Accumulative Pension Fund (UAPF), in 2023, private asset management companies such as ВCC Invest, Centras Securities, Halyk Global Markets, Jusan Invest and Halyk Finance outperformed the National Bank in terms of earnings.

Last year, the National Bank reported a 10.11% return on UAPF pension assets, while inflation was at 9.8%. Public debt accounts for almost half of the regulator’s portfolio (46.5%); public debt of other countries – 0.13%; deposits in the National Bank – 4.92% and bonds issued by quasi-public entities – 9.1%.

As of January 1, 2024, the weighted average return for BCC Invest assets was at 13.05%. The company supervises $6.4 million of the UAPF assets. BCC Invest invested the biggest part of this money (24.69%) in bonds by quasi-public entities in Kazakhstan, while bonds by international financial organizations accounted for 12.58%. Bonds issued by commercial banks were the smallest share of the company’s portfolio at 0.96%.

In January 2024, Centras Securities reported $2.2 million in pension assets in its portfolio management. Since January 2023, these assets reported 10.67% in return. The company mainly invested in public securities (33.89%) and equity instruments of foreign companies (ETF).

Halyk Global Markets is managing $7.1 million in the UAPF assets with a return rate of 15.55% in 2023. Reverse repos and bonds by Kazakhstani quasi-public entities accounted for 38.35% and 12.98%, respectively.

As of January 1, 2024, Jusan Invest reported $13.4 million of pension assets under its trust management. These assets had 13.48% in returns. The share of Kazakhstan’s public debt and the public debt of other countries in the company’s portfolio reached 45.91% and 5.55%, respectively. The share of investment funds is 28.16%.

Halyk Finance supervised $30.8 million of pension funds with a profitability of 17.2% in 2023. Reverse repo accounted for the lion’s share of the company’s portfolio (66.7%), while the share of Kazakhstan’s public debt and notes by the National Bank was at 3.65% and 3.12%, respectively.

This means that Halyk Finance outperformed its private competitors and has become the leader in terms of profitability of pension assets.

As of January 1, 2024, the UAPF controlled $39.9 billion of pension assets. In 2023, the fund reported a 21.8% increase ($7.1 billion) in these assets.

In 2021 and 2022, private assets management companies were dragged behind the National Bank in terms of returns on pension assets. In 2022, the National Bank reported profitability of these assets at 6.55% or $2 billion. At the time, the regulator had $32.6 billion of pension assets in its trust management compared to $20.9 billion under the supervision of private companies. In 2021, the National Bank reported profitability at 11.13% ($2.9 billion) versus 17.37% for private managers combined. According to private asset management companies, this difference in results was caused by different approaches to accounting.