PHB to independently manage AHB funds, aims to quadruple fund size to RM20 bil

08/05/2024

SHAH ALAM (May 7): Pelaburan Hartanah Bhd (PHB) is to part ways with Maybank Asset Management Sdn Bhd (Maybank AB) to independently manage the funds of its commercial property unit trust, Amanah Hartanah Bumiputera (AHB), as part of its seven-year business plan that aims to increase the fund size from RM5 billion to RM20 billion by 2030.

Presently, the funds under AHB are managed by Maybank AB while its sponsor is PHB and its trustee is AmanahRaya Trustees Bhd.

The move to manage its funds in-house is a strategic step towards future growth facilitated by the formation of its wholly owned fund management subsidiary, PHB Asset Management Bhd (PHBAM), which obtained a Capital Market Services licence from the Securities Commission Malaysia in April this year.

“PHBAM’s primary objective aligns closely with PHB’s mandate of increasing the capacity and wealth of Bumiputera through commercial real estate ownership,” PHB group managing director and CEO Mohamad Damshal Awang Damit told the press at PHB’s headquarters on Tuesday.

“In line with PHB’s seven-year business plan which is targeted to increase its fund size from RM5 billion today to RM20 billion by 2030, through expanding access for each unitholder and to reach underserved Bumiputera communities through a digital distribution strategy,” Mohamad Damshal added.

Currently, AHB has a fund size of RM5 billion and assets under management of RM10 billion comprising a robust portfolio of 25 real estate assets in five sectors, namely: office, retail, education, healthcare and logistics.

According to Mohamad Damshal, PHB is confident of scaling its fund size four-fold by 2030. He underlines that there is room for further AHB unit issuance given it only comprises 75,000 individual unitholders.

“If you look at our unit trust, we have about 75,000 unitholders, less than 1% of Tabung Haji’s over nine million. Even if we were to double or triple it, it would still be less than 3% of Tabung Haji. On top of that, we also attract institutional investors that qualify as Bumiputera investors. That’s why on the funding side, we are confident of achieving the target,” he said.

That said, Mohamad Damshal said the challenge will be to match this fund growth on the asset side by procuring the rights assets into its portfolio to ensure steady returns for unitholders.

According to PHB, AHB’s annual returns since 2014 have ranged from a low of 4.3% in 2021 to a high of 6.6% back in 2014.

The move to manage AHB’s funds internally is two-pronged, according to PHB’s head corporate strategy department and general manager Muhammad Zikri Kamardin, notably providing the group better control over its operations, complementary of its growth aspirations, as well as enabling it to enhance its multiple integrated solutions.

Mohamad Damshal noted that PHBAM’s management services will not be restricted solely to the funds under AHB, adding the newly established unit will also be providing fund management services to interested external clients.

“We really have to coordinate when it comes to ensure we mitigate any given problem. There will be teething problems, but we won’t run away from them,” he said, adding that the most important thing is to ensure AHB unitholders’ interests are protected at all times.

Meanwhile, Muhammad Zikri underlines that PHB has been preparing for this transition over the past two years and has already anticipated potential road bumps it may face in the process.

Further, he notes the only change the fund will see is the change in its manager to PHBAM while its sponsor (PHB) and trustee (AmanahRaya Trustees Bhd) will remain unchanged.

In terms of fees, Muhammad Zikri noted that the management fee that is currently being paid to Maybank AB will remain the same but will be instead be paid to PHBAM.

“The benefit is that our own subsidiary is being paid [for management], so whatever benefit that we see from there, at the end of the day it’ll go back to the unitholders [by virtue of PHB being AHB’s sponsor],” he added.

Move independent of government’s Bumi-focused investment institutions consolidation

Commenting on the government initiative to consolidate the country’s Bumiputera-focused investment institutions under Yayasan Pelaburan Bumiputera (YPM), a unit of Permodalan Nasional Bhd, Mohamad Damshal said the consolidation initiative was not the trigger to PHB’s decision to manage AHB’s funds internally.

Mohamad Damshal said the decision was made before the consolidation initiative was announced in Budget 2024 in October last year.

Nonetheless, he notes that PHB welcomes the government’s move to consolidate Bumiputera-focused investment institutions, reasoning that it will create better synergies between PHB’s parent, Pelaburan Hartanah Bumiputera, and YPB, leading to more effective government monitoring of the institutions.

During the tabling of Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim had revealed its plans to merge these institutions, together with Ekuiti Nasional Bhd (Ekuinas) following recent past experiences where Bumiputera agencies fell into losses due to mismanagement, negligence and procrastination.

The consolidation is said to ensure key institutions are managed well and professionally to realise their long-term investment potential for the benefit of their Bumiputera stakeholders.

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