Maharlika Corp. eyes issuing ‘thematic sub-funds’

Maharlika Investment Corp. (MIC), the state-owned firm running the Philippines’ first sovereign wealth fund, is planning to issue “thematic sub-funds” as part of its future fundraising and investing activities.

“MIF (Maharlika Investment Fund) will set up sub-funds… thematic sub-funds,” MIC president and CEO Rafael Consing said in an interview on PTV’s Pre-SONA Special with RJ Nieto on Tuesday.

Thematic funds refer to equity mutual funds that invest in equities that are tied to a theme such as infrastructure, energy, manufacturing, among others.

Launching thematic sub-funds as well as issuance of bonds would allow retail investors to directly invest in the MIF.

“We will create thematic sub-funds… for example, from MIF, we will create an energy fund. That energy fund will invest on several targets… then we can issue asset participation certificates,” Consing said.

However, the MIC chief said the sovereign wealth fund should make its first investment activity before venturing into issuance of sub-funds.

Consing said that “by the fourth  quarter, we should be up and running already… before the year ends meron na tayong investments na gagawin.”

The MIC chief earlier said that the sovereign wealth fund is set to make its first investment — likely to be in the renewable energy sector — by the end of 2024.

For the first half of the year, Consing said the MIC will focus on organization, with the budget currently being fine-tuned by the Department of Budget and Management (DBM). It is also coordinating with the Governance Commission for Government-Owned and Controlled Corporations (GOCCs), and the Civil Service Commission (CSC).

Consing reiterated that the MIC will focus its initial investment activity on developing the transmission and distribution infrastructure of the country's off-grid islands.

He said that the island grid development forms part of its proposed P35-billion investment activities for this year.

The MIC serves as the primary vehicle for mobilizing and utilizing the Maharlika Investment Fund for transactions aimed at generating optimal returns.

The MIC's responsibilities include governing and managing the MIF by the objectives and purposes outlined in Republic Act 11954, as well as other relevant laws, rules, and regulations.

The MIC is governed by a nine-member board of directors made up of the Finance Secretary as chairperson, the MIC president and CEO, the Land Bank of the Philippines president and chief executive officer, the Development Bank of the Philippines president and CEO, two regular directors, and three independent directors from the private sector.

Under the law, the MIC has an authorized capital stock of P500 billion, P375 billion of which shall have corresponding common shares available for subscription by the national government, its agencies or instrumentalities, government-owned and controlled corporations or GFIs, and government financial institutions.

Its initial capitalization is sourced from the national government and the country’s two largest state-run banks. 

The Landbank transmitted P50 billion and the DBP P25 billion to the Maharlika Fund.

The national government will contribute P50 billion from the following sources:

• Bangko Sentral ng Pilipinas' total declared dividends
• National government's share from the income of PAGCOR Properties, real and personal identified by the DOF-Privatization and Management Office
• Other sources such as royalties and/or special assessments

The remaining P125 billion in capital shall have corresponding preferred shares available for subscription by the national government, its agencies or instrumentalities, GOCCs or GFIs, and reputable financial institutions and corporations.