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N.P.F.'s offshore investment strategy follows Fiji's success

Samoa's national pension fund's increasing investment in offshore ventures is mirroring a similar strategy pursued by Fiji's Superannuation Fund, which it says is netting considerable returns for investors. 

Samoa's offshore investment portfolio is currently at 10 per cent. 

But the country's National Provident Fund C.E.O, Pauli Prince Suhren, said they are trying to convince the Central Bank to raise it to 15 per cent. 

Pauli this week defended the Fund's offshore strategy.

But the approach of Samoa's National Provident Fund mirrors the success of Fiji's National Provident Fund which says it has seen some of its overseas investments more than double in value. 

The Fiji Fund's Chief Executive Officer, Jaoji Koroi, said they hope to increase their offshore investments to 20 to 25 percent from the current 5 per cent.

“Currently we invest in [funds] in Australia, and also [an] infrastructure fund in Australia and we invested with [the] International Finance Corporation they have an emerging fund in Asia, which we have invested in and some term deposits and bonds," he said. 

“For our investment in Australia, in five years, we doubled what we put in. Our initial investment was $30 million and it went to $80 million in value.

“We’ve realised the benefits, we only wished there were bigger investments because the Reserve Bank only allowed $30 million.” 

Mr. Koroi is in Samoa for the Pacific Islands Investment Forum, which brings together heads of pension funds and financial experts to draft a prospective co-investment.

“These funds are homegrown funds and most of them have grown significantly in their own economies, they become significant in their own countries," he said. 

“So the challenge is there are a lot of contributions, savings are being captured; and to meet the expectations of the members in terms of the returns, their own economies are too small for them, so they are looking to go beyond their own countries.

“The best way to step out of their country is to go into the region, and you need experience, and you need to come together and look at opportunities in other countries.”

Referencing Fiji’s investment in Amalgamated Telecom Holdings (A.T.H.), Mr. Koroi said Fiji is a major investment in the company and is becoming a saturated market for their telecommunication interest.   

“So we are demanding more income from them, so what they are doing is they are going out to the Pacific and buying assets in the Pacific, so it’s the same concept. 

“Superannuation funds will continue to grow in the future, and as more people get employed, the amount of contribution will grow, so to meet expectations of the members, we’ll need to look at investment opportunities outside our own countries. 

Mr. Koroi said there are always risks in any investments. 

“When you extend outside of Fiji of course there are foreign currency risks and other risks in that economy that are now imposed on ours.”

Mr. Koroi said the intention to increase their offshore investments only needs clearance from the Reserve Bank of Fiji, who regulates foreign exchange requirements.

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