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Pacific Balanced Funds grow 700% within seven years

Staff Reporter 2/08/2013 | |
Wemin (centre) announces the K41 million windfall flanked by MTSL director Joshua Bakiri (right) and Securities Commission chairman Douglas Uyassi.-Nationalpic by MALUM NALU
PACIFIC Balanced Fund (formerly Investment Corporation Fund of PNG) grew by a massive 700% between 2003 and 2010 from K34.6 million to K277.7 million, according to financial reports released yesterday by fund manager Melanesian Trustee Services Ltd (MTSL).
This is also the first time the fund has released an annual report since its inception in 1971.
The documents were produced specifically for unit holders and were derived from audited reports delivered independently by leading accounting firms Deloittes Touche through PricewaterhouseCoopers.
MTSL chief executive officer Kennedy Wemin said financial audits for 2011 and 2012 were being carried out and shareholders could expect more good news when they were completed later this year.
“Stability in the management of the fund was not reached during the first six-year period (2003-08).
“However, controls were put in place to ensure expenses were controlled to certain levels and liquidity in the fund increased,” he said.
“PBF investment value remained constant from 2003-06 with no capital growth.
“However, fund growth during the period was due to investments paying income to the fund.
“Massive growth in fund value during 2007-08 was mostly due to growth in the fund investments triggered by the LNG project, favourable commodity prices and increased government spending.
“Under the management of MTSL between 2009 and 2010, the fund grew by K63 million, or 29.5%.”
Wemin said the results were promising and the fund was working harder to improve its income profile through existing and new investments “so we are able to deliver good dividends to our unit holders”.
“Unlike the super funds, whose incomes are derived from employee contributions, employers’ contributions and dividends from investments, private funds like PBF’s only income is from the investment dividends,” he said.
“However, unit holders benefit from owning part of the investments and also earn a cash dividend should the fund make cash profits.
“Financial audits for 2011 and 2012 are underway and we are looking at concluding the reports by the third quarter of the year and we are looking at paying the next set of dividends by late 2013 and starting the trading of units by late this year and next year.
“Other exciting initiatives would be announced in the coming months.”
Wemin said the fund had lived through various pre-independence governments to these days.
“In 2002, it was separated from direct government influence through the separation of roles performed by the trustee and fund manager and regulated by the Securities Commission,” he said. The National 

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