Meet the Chairman, Rajeev Sharma
Exclusive interview with Rajeev Sharma, CEO of Nasfund and Chairman for the Pacific Islands Investment Forum.
Interviewer: As Chairman for PIIF, can you share your professional journey leading up to your role? What were some of the pivotal moments that prepared you for this role?
Rajeev: I started working with Nasfund in 2014 as CFO, and in 2022, I became CEO of Nasfund. I took over as CEO on 1 April 2023, taking over from Ian Tarutia, who was chairman of PIIF. PIIF chairmanship is passed on through all the member countries of the PIIF.
We have 14 countries. All the superannuation funds across these countries are our members, and these chairmanships are rotated. So, in 2023, Papua New Guinea was allowed to assume the chairmanship.
Ian Tarutia was selected as chairman, so when he retired and left Nasfund, then I, as the incoming CEO of Nasfund, took over the role of PIIF chairman. Before that, my engagement with PIIF was that I attended a few of the seminars and investment conferences PIIF held as a Nasfund representative, representing Nasfund and Papua New Guinea. So, that was a brief journey for me through PIIF.
As chairman of PIIF, the journey has been fantastic.
We are trying to achieve a more collaborative approach to investments. So, we are trying to get into a platform module where we create an investment platform. All the membership countries across the Pacific take leverage out of that platform. What this means is that only one team evaluates and analyzes an investment.
Every other country that would like to participate in the investment can take the lead from there. They can draw all the materials from there so that there is no duplication of work.
What we are trying to promote within Pacific is a joint investment by all the support funds.
Interviewer: What are your primary focuses and strategies in steering PIIF towards its goals? How do you balance the interests of the member countries and investors?
Rajeev: As super funds, our primary responsibility is to give a good return to our members. So, our first and foremost responsibility is to our membership, and every country will have different membership requirements. It may depend because you cannot commit to a long-term investment if you have an aging membership base. So, every fund will have its requirements there.
Now, as far as investors are concerned when they invest in super funds or invest along with super funds, we want to ensure that they need to be assured that they are partnering with the world's best-practicing institutions. So we tick all the boxes, and whatever we commit to gets adhered to.
Interviewer: From your vantage point, what are the most significant trends shaping investment opportunities in the Pacific Islands? How is PIIF positioned to leverage these trends?
Rajeev: Papua New Guinea currently has the largest economy in the Pacific. It's larger whether you see population, GDP, or prospective growth coming into the economy. What it means is that I see a lot more opportunity for Pacific nations to do joint investments in Papua New Guinea. However, we are open to investments in other member countries where we see opportunity. When we see an opportunity, every fund will have to evaluate whether it fits their criteria of strategic investments or not.
Like, I might be short on an infrastructure project. Other funds may not be short on an infrastructure project. If I see a good infrastructure project, like the Cook Islands, I could invest there.
And vice versa, if someone from Fiji sees an opportunity in Telekom, they can come and make a joint investment in Telekom. So, what it would do is that we, all membership nations, will act as a host member. Like in Papua New Guinea, we have three superannuation funds that are primarily very engaged there, Nambawan Super, Nasfund, and CTSL, so we can all participate together. One of us can participate. Other member nations can participate. And that's how the whole universe of these new investments will take place.
The one that had the best checklist was the one we adopted to evaluate any proposal that comes to PIIF.
What stood out for me was all the funds coming together. We had a conference in March here, attended by the Prime Minister of Papua New Guinea, the Governor of the Bank of Papua New Guinea, the Governor of NCD, and several senior ministers. There was a lot of interest in what we do because this industry has grown quickly and gone unnoticed.
If you look at the numbers in Papua New Guinea itself, all the members' overall fund size was less than a billion kina. Now, that fund size sits at around 17 billion kina. So that's massive wealth generation by the members, happening across the Pacific.
Interviewer: What have been some of the most significant challenges faced within PIIF, and how has the Fund overcome them? Can you share a particular triumph that stands out?
Rajeev: One of the challenges is more from the investment return point of view because investment returns are taxable. Each geography has its tax angles to consider. So, when discussing investment returns, my investment returns may be 7% on a particular project.
But it could mean that when it goes to some other country, it could mean 6% to them. That is why one challenge we are coming across is that there are various laws around dividend withholding tax or interest withholding tax. And that needs to be kind of, we are trying to have some kind of arrangement, where we all understand what exactly is there. That’s number one.
Number two, when we talked about the income tax of the Superannuation industry itself. Papua New Guinea is inferior in terms of taxation. We pay the highest tax in Superannuation across the Pacific. In terms of membership, each member pays more tax than other Pacific nations. So, we want to achieve uniformity in taxation across the Superannuation industry, whether it be membership or the company itself.
So, a lot of consultation is happening. The first and foremost was collecting all the data. We have collected this data on how the Superannuation industry works in a particular geography in a particular country.
The PIIF's job is to analyze now and produce, okay, this looks like the best model. Then, we should advocate with each of the governments in the Pacific and say this is the best practice for the members. Why don't we adopt it? For example, even when evaluating an investment proposal, we collected data from all the super funds across the Pacific on what kind of checklist they use.
Interviewer: How crucial are collaborations and partnerships in advancing PIIFs objectives? Could you highlight a particularly impactful partnership?
Rajeev: This partnership is impactful because we are learning from each other. What are the best practices to follow? The second thing we all need to learn is and draw from each other's experience: Superannuation has become far more relevant now because everyone is living longer. Everyone needs more money when they retire. The impact of inflation and how everyone is tackling that is number one.
Number two, the emerging area that I see is a lot of collaboration in the field of technology, like the use of AI, artificial intelligence. We are trying a few things here. And once we try, it becomes successful. I'm going to pass that on to PIF. And likewise, whatever advancement is happening, we basically share it with all of them. For example, when we created videos for educational purposes, I shared with our PIF secretariat that these are our videos.
If they want to create something similar, use it, or take a hint from there, this is the way to engage with members. Likewise, I visit most of their websites and see what they are doing that we are not doing. We learn from each other.
Interviewer: Looking ahead, what are your hopes and aspirations for PIIF? Are there any new initiatives or directions you are particularly excited about?
Rajeev: My hope and aspiration for PIF is that we are taking baby steps. We were trying to get funding from various agencies, including agencies from New Zealand and Australia, to create that investment environment, system, and people around it. So far, we have not been very successful. But we are engaging with all these agencies. So, one hope is that in the next six months to one year, we should have some luck there so that we can create one complete model of investment where everything can fit in there and the reports can come out of that with some system and people around it. That is number one.
Number two, we are working on a few of the projects together, but nothing has crystallized. But if you take a step back, various super funds have joined hands and made joint investments. For example, Loloata in Papua New Guinea is owned by three partners: Nasfund, Solomon Island Fund, and Lamana Constantinou Group.
Likewise, our investments: We had investments in Fiji with the Fiji Super Fund, in Samoa, and currently, in the Solomon Fund, with the Solomon Fund being another partner there. So, there are a lot of one-on-one engagements, but we want these engagements to be more through PIIF so that more member countries and members can participate.
Interviewer: What has been the most rewarding aspect of being a part of the PIIF for you so far?
Rajeev: I see many opportunities for PIF to do joint investments. I'm passionate about this and very hopeful that we will soon do a joint investment.
We are probably getting closer to this than distance, but there are a few things. As I said, taxation becomes one angle that we need to deal with. And again, if any country invests money here, then it would like to have clarity on how the money will be remitted back.
So, the lack of foreign exchange currently in Papua New Guinea creates another problem. But having said that, there will be a lot more opportunity for joint investment in projects in Papua New Guinea when the new Papua LNG starts. We are just gearing up and getting ready for those opportunities to come by so that we can have some joint investments.
Interviewer: This has been such an insightful interview Rajeev, thank you for making the time to sit with us. Finally, do you have any closing remarks?
Rajeev: I just want to say that PIIF is a great idea, a good body. For all the Pacific nation countries, we should join hands and put more concentrated efforts into making joint investments across the Pacific. It brings in a higher level of governance because it is not biased.
When we invest, we invest for everyone, and everyone will benefit from it. Because superannuation has become so large, we are looking for great opportunities and investment vehicles for our members. And this is one such vehicle.
If used effectively and well, it will benefit the membership in a particular country and across the Pacific.