Kuala Lumpur: The Armed Forces Fund Board (LTAT) plans to reduce its strategic asset holdings from 56 per cent to 35 per cent under ‘Project Earth’ over the next three years to lower exposure while retaining control.
According to BERNAMA News Agency, LTAT chief executive Mohammad Ashraf Md Radzi stated that strategic assets currently account for 56 per cent of the RM13.6 billion under management. He explained that through this capital recovery, any transactions or monetisation would allow LTAT to reclaim the capital invested in these companies in a structured manner-at their rightful value-and reinvest in other asset classes where gaps exist. This was revealed at the LTAT Dividend 2024 media briefing.
He highlighted that LTAT’s strategic assets include its wholly owned subsidiary, Boustead Holdings Bhd, a 54.9 per cent stake in Pharmaniaga Bhd, and a 22 per cent stake in Affin Bank Bhd. Aside from strategic assets, LTAT’s portfolio comprises real estate (11.8 per cent), public equity (9.4 per cent), fixed income (9.3 per cent), private equity (7.8 per cent), and cash and money market instruments (5.8 per cent).
Last year, the Public Accounts Committee (PAC) urged LTAT to diversify its investments instead of concentrating on Boustead Holdings Bhd. Project Earth aims to optimise LTAT’s investment strategy while fostering the long-term growth of key companies. The initiative considers the need to nurture businesses with strong growth prospects and long-term benefits.
Mohammad Ashraf mentioned that the project was presented to the Cabinet on December 13, 2024. It has three objectives: improving operational efficiency and productivity, ensuring each subsidiary remains competitive in its respective industry, and structuring each operating company under the most optimal shareholding. This adjusted strategic plan under Project Earth focuses on these three objectives as guiding principles, with the goal of reducing exposure levels while creating a positive gap between balance sheet investment costs and the actual value of holdings.
As Malaysia chairs ASEAN, LTAT aims to strengthen partnerships within ASEAN nations by leveraging Malaysia’s leadership role to foster economic cooperation. This aligns with LTAT’s broader strategy of balancing domestic priorities while capitalising on regional synergies. Mohammad Ashraf noted that in sectors like farming and agriculture, LTAT has a majority-owned subsidiary operating in Indonesia, whose clientele consists mainly of private sector companies rather than the government sector. Whenever feasible, LTAT aims to replicate its domestic market strategies in Indonesia.