Chile's private pension-fund managers, or AFPs, reduced their investments abroad 22.8% to $46.95 billion in the third quarter, versus the prior three-month period, government regulator SAFP said Tuesday.
AFPs, Chile's largest institutional investors, decreased their exposure in overseas equities and fixed-income markets as concerns about Europe's sovereign debt crisis battered global markets.
"Uncertainty created by Greece's rescue plan and by the risk of insolvency in countries like Ireland, Portugal, Spain and Italy had a negative impact on equities markets, especially considering the risk of contagion in the rest of the euro zone and its negative impact on global economic activity," SAFP said.
Overall, the AFP funds held $132.66 billion at the end of September, of which 35.4% was invested abroad.
After recent regulatory changes, AFPs can now invest up to 80% of their assets abroad.
Of the AFPs' consolidated investments abroad, some 67% are in equities, while the remainder is in fixed-income, SAFP said.
Of the overall investments abroad by AFPs, only 6.4% are in "developed Europe," 27.6% in the U.S., and 26.7% in emerging Asia.
The largest group of funds managed by the AFPs, known in Chile as the Type C-fund and which includes both fixed-income and equity instruments, held 30.3% of its assets, equivalent to $16.47 billion, abroad at the end of September.
Among individual funds, the highest-risk A Funds had 64.9% of their assets, or $15.94 billion, invested overseas as of Sept. 30; the B Funds had 44.9% of total assets abroad, or $11.07 billion; the D Funds had 17.4% of overall assets, or $3.4 billion, in international markets; and the lowest-risk E Funds had 1.8%, equal to $178 million, abroad.
AFP Provida SA (PVD, PROVIDA.SN), which managed the largest portfolio at the end of September, had 34.7% of assets invested abroad, equal to $13.47 billion. Provida is 51.6% owned by Spanish bank Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC).
AFP Habitat (HABITAT.SN), Chile's second-biggest AFP, held 33.6% of its assets, or $11.29 billion, overseas at the end of September.
Number three AFP Capital had 34.1% of total assets, equal to $9.96 billion, invested in international markets. Capital was created in 2008 after Dutch banking group ING Groep NV (ING, INGA.AE) bought Banco Santander SA's (STD, SAN.MC) AFP Bansander and merged it with its AFP Santa Maria.
-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; [email protected]