KUALA LUMPUR (July 13): Lembaga Tabung Angkatan Tentera (LTAT) launched a multi-year strategy through 2025, aiming for an asset under management (AUM) of RM15 billion, growing the fund with sustained 5% returns for members, as well as recovering RM3.3 billion cost of investment in beleaguered Boustead-related businesses.
The Armed Forces Fund Board said in a statement on Thursday (July 13) that its AUM stood at RM9.3 billion as at May 2023.
The fund also hopes to diversify its concentration of asset allocation on Boustead-related investments, from 39% currently to 15% by 2025.
In his speech during the launching of the strategy, LTAT's chief executive Datuk Ahmad Nazim Abd Rahman said this will be done through rebalancing and reinvesting exercises within each asset class, the restructuring and eventual re-listing of Boustead Holdings, after privatising it via a RM703.2 million or 85.5 sen per share deal.
"We hope to transform LTAT into a provident fund from an investment fund today, by maintaining liquid assets of over 60% from 30% currently," he said.
Additionally, over the two-and-a-half year period, LTAT hopes to lower its assets allocation for private equity to 12% from 19%; real estate to 10% from 20%; while seeking to increase allocation in public equity to 38% from 11%; and fixed income and money market to 25% from 11%.
“With the launch of LTAT Strategic Plan 2023-2025, providing clarity for its way forward, LTAT will now be in a better position to withstand headwinds and protect the social well-being of its members, catalysing the transformation into a sustainable provident fund,” said Defence Minister Datuk Seri Mohamad Hasan, after attending the launch of the strategy here.
To achieve these targets, LTAT will carry out strategies like expanding voluntary contributions, cost optimisation for organisational growth, pursue active investment strategies with total return objectives, optimise asset and liability matching, as well as rebalance and reinvest within each asset class.
At present, LTAT, a statutory body which manages pension funds for members and veterans of the armed forces, has a total of 116,456 Malaysian armed forces members, of which 110,792 are active.
Under the LTAT scheme, contributors are required to contribute 10% of their monthly salary, with the government as their employer contributing 15%.
LTAT declared a 5% dividend for 2022, 4.1% in 2021, 3.5% in 2020, 2.5% in 2019 and 2.0% in 2018.
The fund is a major shareholder in several listed companies like Affin Bank Bhd, Boustead Heavy Industries Corp Bhd, Boustead Plantation Bhd and Pharmaniaga Bhd.
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