MPLT Board Chairman Alvaro A. Santos said, “Our investment strategy is to be conservative.”
He said their combined general fund and park fund portfolio is worth $71 million — about $63 million in general fund and $8 million in park fund — with a 5.9 percent rate of return.
“Under the conditions, we did well,” said Santos. “Of course we always want to do greater but under the conditions we did pretty well.”
He said their asset allocation remains at 65 percent in fixed income and 35 percent in equities.
MPLT is watching the market closely and looking at the performance of their money managers, he added.
MPLT has seven money managers: Newgate, Lazard, MacKay Shields, Richmond Capital, SEIX, Templeton, and Metropolitan West.
MPLT replaced Atalanta Sosnoff with Metropolitan West.
Santos earlier told Variety that they found a consistent downslide in Atalanta’s performance.
Santos said Metropolitan West was chosen on account of its good market performance.
He also said another consideration was the new money manager’s accessibility, having an office on Guam.
“Performance is paramount and they have to meet industry standards,” he said.
Santos said they use peer evaluation, among other methods, to gauge a money manager’s performance.
If the money manager continues to slide in performance for a period of six months or longer, he said they put the money manager on a watch list.
And if the nonperformance continues, they terminate the agreement and look for a new money manager.
Santos said the challenges right now for the agency are the risks involved local investments.
“We see risk to the point that we may be spreading ourselves too thin,” he added.
But MPLT is also public trust and financial reward is not just its main objective, he said.
Created by the CNMI Constitution to invest revenue from public land leases, MPLT must also look at the common good and how its investment will benefit the community, he added.
“We try to stay on the safe side and ensure that we meet our obligation to the central government every year,” he said.
About two weeks ago, MPLT cut a check for $2 million for the central government.
“That is the earned income that we earned in this fiscal year ending Sept. 30, FY 2011,” Santos said.
Every year, MPLT remits income minus administrative expenses to the general fund.
