Offshore investment block frustrates FNPF

October 19, 2009 10:19:30 AM

• A⁺ 
• A^-
• |
• 
• |
• 
• |
• 

The Fiji National Provident Fund (FNPF) is still unable to diversify its investment portfolio into the overseas financial market and there are indications that it may not happen in the immediate future. 

This has been confirmed by FNPF chief executive officer Aisake Taito, who confirmed to FijiLive that repeated efforts with the authorities to allow the fund to invest offshore has not been successful. 

“In terms of offshore investments, that’s a question you probably should ask the Reserve Bank.  We have made presentations to them many times but we have not been successful,” Taito said when asked if FNPF has made any progress since it was required by the Reserve Bank of Fiji in 2005 to repatriate over $300 million in offshore investments to bolster critically low foreign reserve levels .

While this saved the pension fund from being skinned as global financial markets began crashing in 2006, it now limits it to a narrowly diversified domestic investment market. 

“I am sure we are just like other institutional investors at the moment, you know, it’s a difficult environment, but I am sure that in the next couple of months or so, we will be able to weather that and know the opportunities that are available and we can be invest,” Taito said, when asked how tough it has been for FNPF to put its $3 billion-plus investment portfolio into the domestic markets.

“We have invested in government bonds, government papers, treasury bills, also quasi-government.  We’ve also put money in the bank - fixed deposits, where we can get reasonable returns for our members,” he added. 

The FNPF’s attempts to diversify into the hotel industry have burnt its hands, and it is now trying to sell off three non-performing hotel projects. 

The Reserve Bank has yet to indicate whether it will, in the foreseeable future, allow FNPF to diversify its investment portfolio overseas, after it recalled FNPF’s offshore holdings in 2005.