The Social Security and National Insurance Trust (SSNIT) is working to drastically reduce its exposure in unlisted equities in which it has controlling shares.
From 30.76 per cent, the trust intends to drop the figure to about four per cent in the next five to six years.
The Director-General of SSNIT, Dr John Ofori-Tenkorang, who disclosed this to the Graphic Business on February 11 said: “As a pension fund, we have an asset allocation policy. You cannot put all your eggs in one basket and our asset allocation policy basically says that in the long term, our investment in equities, meaning companies where we have shareholding which are not listed on the stock exchange, must reduce in the long term.
That is in the five to six years rising onwards we should have only four per cent of our asset allocated in there. Currently in our unlisted equities, we have 30.76% and that includes six hotels,” he said as he reacted to allegations that the trust had placed for sale some hotels it runs within the country.
“When I say unlisted equities they include things such as our hotels which are not listed on our stock market. It will include companies that deal in real estate that we have significant shareholding and so on and so forth.”
Strategic investors invited
Narrowing his explanations to the Expression of Interest (EOI) adverts the trust placed in the national dailies last week, Dr Tenkorang said: “So it’s not only the hotels that are unlisted but we also have other companies that are unlisted on the stock market.
The hotels in contention are the Labadi Beach Hotel, a five-star leisure hotel with 164 rooms, and the La Palm Royal Beach Hotel, a four-star facility with 152 rooms, both in Accra.
The rest are the Elmina Beach Resort, a three-star 100-bed facility on the Cape Coast-Takoradi Highway; the 79-bed Ridge Royal Hotel, also a three-star hotel in Cape Coast, and the Busua Beach Resort, a three-star facility with 62 beds, located at Busua in the Ahanta West Municipality in the Western Region.
The last is the Trust Lodge Hotel, a 10-room hospitality block structure located on the Beach Road of the Western Regional capital, Takoradi.
Dr Tenkorang said to be able to get to that long-term goal of reducing its exposure in such companies, “and for instance if you want to do further development which means propping up these hotels and make them more competitive to match the likes of the Marriots, the Hiltons, the Kempinski, then you need strategic investors”.
He said should the trust inject more funds to bring the hotels up to standard, it would be defeating its own objectives because then the equity stake in such unlisted companies would rather go up.
“If SSNIT does it alone then instead of reducing the proportion of allocation to that sector of the portfolio, we will end up going in the other direction. So if we want to make it better and maximise the use of the strategic assets that we have, then it is better to invite other people to come and co-invest with us,” he said.
On the record
It is on record that the trust was returning more from investments in which it has no controlling shares.
A typical example is the size of dividends it receives after it’s sold the controlling stake in the Trust Bank to ECOBANK.