Maharlika Investment Corp. (MIC) has identified possible exit mechanisms for its investments under the Maharlika Investment Fund (MIF).
Rafael Consing, MIC chief executive officer, said the fund expects to realize returns on its investments by way of sale.
Consing said it could also structure the investment with a maturity date for the owners to redeem in the future.
“In terms of our own investments in the projects, let’s say, you’re investing in equity shares and common shares, then you either have to wait until the expiry of that company and you get all your money back by way of dividends,” Consing told reporters at the sideline of the SGV & Co.’s “Philippine Economic Outlook: Public and Private Partnerships as a Catalyst for Sustainable Growth” forum on Monday.
He added: “You can exit by way of actually selling this to a potential buyer in the future or structure the investments where it’s got the maturity date, for example, hybrid capital.”
Consing said the MIF which the MIC is tasked to manage, is likely to have its initial list of sectors to invest in by the fourth quarter of the year.
Consing, said among the sectors the agency is looking to put the country’s sovereign wealth fund will be on energy, infrastructure, airports, and agriculture.
In prioritizing the energy sector, particularly renewable energy, Consing said it needs no elaboration given the present situation in the Philippines.
“You and I pay for very high electricity costs, and it takes a bit of time to build up the electricity…in terms of the availability and peak, we barely have about anywhere between 15 and 20 percent in surplus during peak demand. The economy is still growing, the population is still growing. If your supply is growing, then you’re going to have an imbalance, you’re going to have an issue, I would say two to three years from now. So hence, it makes sense for one to begin investing,” he said.
Consing said MIC is looking at putting a sectoral cap on its investments of 15 percent.
Consing said he expects the first tranche of the MIF’s P125- billion seed capital to come in by the end of March, P2.5 billion, before the full amount is received by the end of the year.
The MIF is initially seeded by the Landbank of the Philippines with a capital infusion of P75 billion, and the Philippine government chipping in another P50 billion.
Consing said the fund is also talking with other sovereign wealth funds to enter into limited partnerships.
“We’re looking at a few,” said Consing, though he declined to name any, citing that talks are still “very preliminary.”
“But I can safely say that the European and Middle Eastern funds are the ones that we are speaking with,” he said.
Under the MIC’s charter, it can be capitalized up to P500 billion.
