Nasfund turnaround due to improved investment performance: Tarutia


PNG’s largest superannuation fund, Nasfund, released improved annual results earlier this month. Business Advantage PNG spoke with its Chief Executive Officer Ian Tarutia to find out how they were achieved.

NNasfund's investment portfolio

Nasfund’s investment portfolio

Papua New Guinean superannuation fund Nasfund had a good year in 2012, turning its K9.4 million (US$4.4 million)) loss into 2011 into a K220.8 million (US$102.8 million) profit, and returning 10% interest to its members.

Chief Executive Officer Ian Tarutia attributed the strong result to improved income from direct investments and an improved valuation of the fund’s property and equity portfolios.

‘Cashflows have also been strong, with an increase in both employer and employee contributions,’ he told Business Advantage PNG. (The fund now has 172,190 active members and 2296 contributing employers.)

NASFUND’s 2012 results in brief

Net assets: K2.798 billion

Net profit: K220.8 million

Interest credited to members: 10%

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Active members: 172,190

Active employers: 2296

Employer and employee contributions: K402.6 million

Gross income from investments: K367.5 million

While there was a strong positive change in the fund’s listed investments, Tarutia reported significant improvements also in its unlisted investments.

‘There were positive contributions across our unlisted portfolio,’ he said.

A revaluation of the fund’s 2.9 million units in the Pacific Balanced Fund added K25.2 million (US$11.7 million) to its bottom line, while the fund’s subsidiary companies, NAS Aviation, NasMel Ltd (which holds its 60% share of agribusiness Mainland Holdings) and Tumuru Holdings (which holds 66% of Brian Bell) between them contributed a further K45.9 million (US$21.4 million).

The fund invested in Mainland Holdings in late 2010 and, while the business has been undergoing a restructure, Tarutia sees the investment as a long-term one:

‘Food security in the medium to long term is important.’

While its modest investment in mobile phone company Bemobile remains unlikely to deliver a significant return, Nasfund’s investments in property have historically proved more successful. However, Tarutia says the bulk of its investments in this sector have been made:

‘We are already over weight in terms of our exposure to property. We’re just completing all the projects we started in 2006 in Harbour City and Town [Port Moresby’s CBD], plus one or two more. There’s still demand for commercial buildings but the high-end residential market is softening. It’s a renter’s market now.’

Tarutia doesn’t expect the downturn in rentals to affect Nasfund unduly, because its properties are brand new, fully leased and in good locations.