Hands tied in offshore investments

A mere 7.3 per cent of the Fiji National Provident Fund’s total assets is invested offshore, with plans by the fund to increase it hampered by regulatory hurdles.

Responding to questions on the fund’s offshore diversification plans if any, FNPF chief executive officer Viliame Vodonaivalu said it does, and already has $700 million invested offshore.

“We certainly do (have plans),” he said.

“We have about $700m invested offshore but mainly in infrastructure in the Australian market and a bit of Asia in South Asia. We certainly intend to go (offshore)…the only restrictions that we have is that any fund that we remit overseas has to go through the central bank’s approval.”

Mr Vodonaivalu told later that FNPF’s offshore investment

– interests are considered by the Reserve Bank of Fiji on a caseby-case basis.

“We’ll request and they’ll either approve or not,” he said.

The fund is limited by RBF’s exchange regulations, it stated in its 2023 annual report.

“RBF Exchange Control approves all outward funds transfers required for offshore investments.”

The fund’s $9.5billion asset size with limited diversification opportunities in the domestic market coupled with offshore investment restrictions have been issues of concerns in the past.

FNPF’s cash holding alone, of around $512million, while within the rule of thumb for cash holding in investment portfolios, is a quarter of the total $2billion liquidity currently sitting unabated in Fiji’s financial system.

We certainly intend to go (offshore)…the only restrictions that we have is that any fund that we remit overseas has to go through the central bank’s approval

FNPF chief executive officer Viliame Vodonaivalu