Tabung Haji’s new focus
INVESTMENT TWEAKS: Pilgrims fund plans to invest in infrastructure and concession businesses to secure recurring and sustainable returns
TABUNG Haji, in a move to secure recurring and sustainable returns, plans to invest in infrastructure and concession businesses locally and overseas.
Its group managing director and chief executive officer (CEO) Datuk Johan Abdullah said given the expected large initial investment, Tabung Haji hoped to collaborate with other government-linked investment companies (GLICs) in these ventures.
The new focus is one of the Tabung Haji group managing director and chief executive officer has to tweak its investment approach year. Pic by Surianie Mohd Hanif
changes Johan is undertaking since taking over the helm of Tabung Haji on July 1.
Tabung Haji, the only Islamic investment company and pilgrims fund of its kind in the world, currently has a fund size of RM64.7 billion.
“We have to tweak our investment approach to make it more sustainable, whereby we can have recurring income every year and don’t have to wait for corporate exercises.
“Concessions will provide a steady cash flow. No big deal in the initial years, very huge amount of capital outlay, but it is quite steady,” said Johan in an exclusive interview with the Media Prima group recently.
Johan, who described leading the pilgrims fund as a blessing and huge responsibility, said from an investment perspective, the keywords he had been sharing with the team were “recurring and sustainable”.
Citing the North-South Expressway as an example, the 60-year-old
says the pilgrims fund where it can have recurring income every
former banker said initially it was difficult to raise funds to build the highway.
“Nobody wanted to take part in the syndication, but look at it now. This is where we have to be more visionary. We can also work with other GLICs such as Retirement Fund Inc and the Employees Provident Fund to co-invest,” he added.
Johan, who was previously BIMB Holdings Bhd managing director and CEO, said working with other GLICs made sense as these types of projects involved big investments.
“When the opportunity arises, such as the East Coast Railway and other infrastructure projects, it is a big investment and we cannot go in alone.
“Most importantly, it offers stable and long-term returns. We don’t mind having a bit more huge investments upfront, but the cash flow that will come in is quite sustainable,” he said, adding that no discussions had taken place yet for the new ventures.
Other sectors that might present opportunities for Tabung Haji included health, hospitality and property, he added.
Johan said he also planned to introduce a transformation officer post in the CEO’s office, which would be responsible for unearthing hidden gems within Tabung Haji.
Its prudent strategic asset allocation planning and risk management had enabled the fund to yield satisfactory returns to depositors with its realisable asset value as at December 31 last year at RM64.74 billion, compared with liabilities to depositors of RM59.33 billion.
Johan, who joined Tabung Haji in January last year as deputy group managing director and CEO, holds a Master’s degree in Business Administration (Finance) from Morehead State University, Kentucky, and a bachelor degree from Eastern Michigan University in the United States.