NIF buys 4% of Barita for $3.7 billion

The Nationwide Insurance coverage Fund (NIF) not too long ago spent $3.67 billion for an extra 4 per cent stake in Barita Investments Restricted because it ramps up funding actions to satisfy its rising funding obligations.

The acquisition occurred on March 28 as NIF purchased a 4.10 per cent stake of Barita from Cornerstone Monetary Holdings Restricted (CFHL), Barita’s direct mother or father firm at that cut-off date. NIF bought 50 million shares at $73.47 per share which makes it Barita’s third largest shareholder with a 4.83 per cent stake or 58,991,553 atypical shares valued at $4.26 billion as of Tuesday’s closing worth of $72.21.

This buy places NIF forward of founder Rita Humphries-Lewin who’s now the fourth largest shareholder, however behind CFHL and First Residents Funding Providers Restricted, a subsidiary of First Residents Group Monetary Holding Restricted (FCG). FCG appointed Jason Julien as its new chief govt officer following the retirement of Karen Darbasie.

That is the NIF’s largest buy in 2025 after spending greater than $11 billion on completely different fairness positions final 12 months. Its largest particular person buy final 12 months was a 5 per cent stake in Wisynco Group Restricted for $3.95 billion from 4JS Funding Restricted on September 13. When mixed with the extra buy of shares throughout 2024, Wisynco is now the NIF’s second largest recognized fairness place with a worth of $4.70 billion on the finish of 2024.

In February 2024 NIF bought $1.74 billion price of NCB Monetary Group Restricted (NCBFG) atypical shares from AIC (Barbados) Restricted. The NIF additionally spent practically $1 billion on NCBFG shares throughout its June 2024 extra public providing (APO). These purchases noticed NIF ascend from being the eighth largest shareholder to the third largest in NCBFG with a stake price $4.62 billion. AIC (Barbados) is the primary holding firm for NCBFG Chairman Michael Lee-Chin.

The NIF’s largest fairness place continues to be GraceKenendy Restricted (GK) the place it holds a place price $4.83 billion on the finish of 2024. Different notable positions embody Pan Jamaica Group Restricted (PJAM) – $3.36 billion; Scotia Group Jamaica Restricted (SGJ) – $3.26 billion; Sagicor Group Jamaica Restricted (SJ) – $2.99 billion; Carreras Restricted (CAR) – $2.80 billion; Jamaica Broilers Group Restricted (JBG) – $2.75 billion; and JMMB Group Restricted (JMMBGL) – $2.41 billion. The estimated worth of NIF’s recognized fairness portfolio throughout 18 securities was $39.82 billion on the finish of 2024.

The NIF was established in 1965 to supply monetary safety to employees in Jamaica, together with retirement, incapacity, and demise advantages. It’s the automobile utilized by the Nationwide Insurance coverage Scheme (NIS) to speculate the NIS contributions acquired from employed people. Other than NIS pension funds, the NIF additionally remits 17 per cent of NIS contributions to the Nationwide Well being Fund (NHF), in line with the Public Our bodies Price range printed by the Ministry of Finance & the Public Service.

The NIF is at the moment chaired by Professor Andrew Spencer who’s the president of Caribbean Maritime College and former govt director of Tourism Product Growth Firm.

The NIF invests cash into equities, actual property, cash market devices and different belongings to generate a return which is required to pay NIS advantages. In response to the unaudited financials for the 2023/2024 fiscal 12 months (April 2023 to March 2024), the NIF generated revenue of $11.78 billion with $10.64 billion being attributed to curiosity revenue whereas $1.02 billion was associated to dividends.

The NIS acquired $57.33 billion in contributions from the employed labour pressure and remitted $9.55 billion to the NHF, which left it with a web influx of $47.77 billion. These contributions have been used to pay $28.78 billion in NIS pension funds, $776.66 million to the NIS Well being Scheme and $1.55 billion to cowl administrative bills.

After accounting for all line objects, the NIF recorded a web surplus of $28.33 billion for the interval. The entity was said to have $193.64 billion in whole belongings with $98.74 billion in funding securities, $33.90 billion in equities and unit belief belongings. On the finish of March 2024, $2.93 billion was recorded as payables and accruals with $190.71 billion in web belongings.

The NIF estimated that it introduced in $25.24 billion in revenue for the 2024/2025 fiscal 12 months (April 2024 – March 2025) with $11.76 billion in curiosity revenue, $1.11 billion in dividends, $3.58 billion in revaluation beneficial properties on funding properties and $6.70 billion in unrealised beneficial properties on investments. The online influx from NIS contributions was $48.79 billion which funded $29.75 billion in pension funds and $919.81 million for the NIS Well being Scheme.

The online surplus for the 2024/2025 interval was estimated at $41.23 billion. The asset base was estimated to have elevated to $234.96 billion with $137.23 billion in funding securities and $24.68 billion in funding properties. The liabilities have been estimated at $3.02 billion with $231.94 billion as the online asset worth.

For the 2025/2026 fiscal 12 months (April 2025 – March 2026) NIF projected that it might earn $26.18 billion in whole revenue, acquire a web influx of $53.75 billion from NIS contributions, and pay $36.16 billion in advantages. The online surplus was projected at $40.84 billion with $272.78 billion in whole belongings and $272.78 billion in web belongings.

The NIF has to enhance its returns, primarily based on a 2016 actuarial report that stated it might be bancrupt by 2033. That is because of the projected improve in advantages payable for an ageing inhabitants with a labour pressure that isn’t rising on the identical tempo. The company was stated to have plans to extend its employees complement from 29 to 37 through the present 2025/2026 fiscal 12 months.

Cornerstone builds money for offers

Following the sale of the Barita shares to NIF, Cornerstone Monetary was estimated to personal 874,181,183 shares or 71.63 per cent of Barita. CFHL’s transfer to promote shares in Barita comes at a time when it’s shifting to shut a deal to accumulate as much as 70.10 per cent of Clarien Group Restricted from NCB Monetary Group Restricted, Portland Non-public Fairness Restricted, and Edmund Gibbons Restricted. NCBFG is about to promote a 30.20 per cent stake within the Bermudan holding firm and retain a 19.90 per cent stake within the enterprise. This deal is topic to regulatory approval.

CFHL, which acquired an estimated $1.82 billion dividend from Barita Investments on October 31, was looking for US$12 million ($1.86 billion) and $2 billion (US$12.74 million) in debt financing throughout February 2024 for additional investments which included acquisitions.

Shareholders of Cornerstone United Holdings Jamaica Restricted, mother or father firm of Cornerstone Belief & Service provider Financial institution Restricted and Barita Investments Restricted, authorized a reorganisation of the shareholdings in each regulated entities on January 20. That can see Barita Monetary Group Restricted (BFG) turn into the direct mother or father firm of Barita Investments and the service provider financial institution. Cornerstone Monetary Holdings will personal 100 per cent of BFG. The booklet for the scheme said March 18 because the courtroom listening to date for the scheme which ought to have been sanctioned for March 31. Nonetheless, a listening to was heard earlier than Justice Stephane Jackson-Haisley on March 31 associated to the scheme.

Cornerstone Monetary’s strikes come on the identical time Barita Investments is executing its public bond looking for to lift between $3.96 billion and $6.15 billion to fund strategic asset acquisitions, enhance its liquidity and funding banking capability and refinance an unsecured bond.