KUALA LUMPUR: The Armed Forces Fund Board (LTAT) is reviewing its Strategic Asset Allocation (SAA) framework as part of efforts to reinforce and enhance the sustainability of its long-term investment portfolio.
Defence Minister Datuk Seri Mohamed Khaled Nordin said the new framework is currently being assessed by the Finance Ministry for final approval before full implementation.
"Several measures are being undertaken by LTAT, including reducing exposure to strategic assets, restructuring subsidiaries with high debt, and strengthening operating performance across its companies," he told the Dewan Rakyat on Tuesday (Nov 25).
"This is why LTAT initiated Project Earth, which enhances Boustead Holdings Berhad's (LTAT's wholly owned investment arm) restructuring plan.
"The plan was approved by LTAT on Aug 9 last year and presented to the Cabinet on Dec 13 as part of efforts to streamline group assets for better efficiency and long-term returns."
Datuk Khlir Mohd Nor (PN-Ketereh) wanted to know the strategic steps taken by the Defence Ministry to ensure that LTAT can resume dividend payouts comparable to its peak years in 2017 and earlier.
Khaled said Project Earth aims to reduce LTAT’s exposure to strategic assets within its Assets Under Management (AUM).
"Under this plan, LTAT targets lowering its strategic asset exposure from 57.8% in July this year to 35%.
"Exposure to Boustead is expected to fall to 12%, Affin Bank to 9%, Boustead Plantations to 7% and the IRAT Group to 3% of LTAT’s AUM," he said.
He added that partnerships with strategic investors will allow LTAT to increase allocations towards low-risk fixed-income instruments, offering more stable and sustainable returns for contributors.
On concerns over declining dividend performance, Khaled said previous high dividends were largely driven by large-scale asset disposals, a strategy LTAT no longer adopts.
He stressed that any losses resulting from criminal acts or misconduct "will be detected and brought to justice", but noted that not all losses indicate wrongdoing.
"Business losses can arise from various factors, including currency fluctuations or unforeseen market conditions," he added.
