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LTAT to raise public equity allocation to 50 pct as it eyes overseas investments

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KUALA LUMPUR, May 12 (Bernama) — The Armed Forces Fund Board (LTAT) aims to increase its public equity exposure to 50 per cent through the realignment of its asset allocations as it plans to make a foray into international markets.

Chief executive officer Datuk Ahmad Nazim Abdul Rahman said the retirement fund targets to increase its public equity allocation to 50 per cent from 44.1 per cent, with 30 per cent to be dedicated for foreign investments.

“So, we will see 30 per cent allocated for investments abroad while the remaining 20 per cent would be for the domestic market.

“We are also looking at investing (overseas) in the third or fourth quarter of this year after getting the necessary approval from the Ministry of Finance and Bank Negara Malaysia,” he said during the MIDF Conversations session with MIDF group managing director Datuk Charon Wardini Mokhzani today.

Ahmad Nazim also said LTAT is looking at reducing its exposure in the real estate sector to 10 per cent compared with 27.3 per cent previously and increasing its exposure in the fixed income segment to 20 per cent compared with 8.4 per cent previously.

“We also plan on reducing our exposure to private equity to 10.0 per cent from 13.3 per cent previously. Our strategy is to provide a sustainable return to the armed forces rather than a high dividend,” he explained.

Meanwhile, to a question on the financially-stressed Boustead Naval Shipyard Sdn Bhd (BNS), Ahmad Nazim said LTAT is in the midst of restructuring the company, putting in the right framework so that the littoral combat ships project can be continued.

LTAT has a direct exposure through its majority stake of 59.4 per cent in Bursa Malaysia-listed Boustead Holdings Bhd (BHB) as well as a 61 per cent effective stake in BNS, which is 82 per cent owned by BHB.

“There is an idea to take out the defence business from the listed entity. The existence of the defence business within the group has created a lot of uncertainties, especially for the analysts and fund managers, so by taking it out, other businesses (under the group) such as Pharmaniaga and Affin Bank can run as usual,” he added.

LTAT is a government statutory body that provides retirement savings and benefits for officers and members of other ranks of the Malaysian armed and volunteer forces.

As of December 2021, the fund had assets under management of close to RM9.7 billion. With an investment portfolio that spanned various asset classes and industries since 2019, the fund has embarked on a five-year transformation plan, with the aspiration to be a world-class retirement fund that delivers competitive and sustainable dividends, and excellent customer service, with the ultimate objective of enhancing the wellbeing of the Malaysian armed and volunteer forces.

The immediate result of the transformation could be seen in the declaration of a 4.1 per cent dividend to over 110,000 members for the fiscal year 2021, an increase from 3.5 per cent in 2020 and the highest since 2018. 


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