Pension funds eye long-term viability in new equity target

THERE were two shareholder exits from Junior Market companies which made big splashes in the last 18 months. Both exits were by brokerage houses which secured significant returns on their initial investment. Representatives of local pension funds – entities which invest in listed companies at any point, including the initial public offer – say they are not likely to duplicate this performance, but are instead focused on investment for the long term.

In December 2014, Mayberry Investments Limited exited Junior Market company Access Financial Services Limited after a bitter court battle and a buyout by fellow brokerage firm Proven Investments Limited. And late in 2015, Proven exited Knutsford Express Transport Limited, another Junior Market firm. Both exits were lucrative, if not equally surgical, extractions with Proven doubling the investment it made in 2014 and Mayberry posting a nominal gain of 2,400 per cent.

Mayberry sold its 39 per cent stake in the microlender for $935 million after initially investing $38.4 million in Access in September 2006. For Proven Investments, the gain made was $98 million in December 2015 when it sold its 20 per cent shareholding in the transport company to NCB Capital Markets for $213 million. It had purchased the shares in November 2014 for $115 million.

Rohan Miller, president and CEO of Sagicor Investments Jamaica Limited – which has more than $100 billion in managed pension funds or just about under one third of the total pensions market – told the Jamaica Observer that positions are taken with a view to long-term outcomes. No five-year exit plans are on the table, he indicated.

http://www.jamaicaobserver.com/business/Pension-funds-eye-long-term-viability-in-new-equity-target_49769