Ashford W. Meikle, Staff Reporter
BURCHENSON: A lot of pension funds in Jamaica are still investing in money market instruments and that is a disservice to the beneficiaries. - File
This week, 'Sunday Business' speaks with the chairman of Prime Asset Management, Herbert Hall, and its managing director, Rezworth Burchenson, on the company's operations and their views of the pension industry. The company, which has been around for almost 10 years, has clients such as Cable and Wireless Jamaica, Caribbean Cement Company Limited Pension Fund, and ICD Group, of which it is a member.
Sunday Business (SB): Not much is known about our company.
Herbert Hall (HH): Prime Asset Management was born out of Prime Life Insurance Company. When the owners sold the life business to Guardian, they kept the pension funds which they had built up at Prime Life and we spun that off into Prime Asset Management.
In the beginning, all we did was offer investment services, which meant that we couldn't be out there in the marketplace beating our chest as pension fund managers because the other piece of the work, administrative, keeping the records, reporting to the Financial Services Commission (FSC), was done by other managers.
But now we are offering investment, administration, as well as investment advisory which means that even if we are not the fund manager, we can be engaged to advise of the status of your fund.
Rezworth Burchenson (RB): We also do what is called transition services. All pension funds in Jamaica have to register with the FSC by September 29. That requires specialist advice, especially as it relates to compliance which many in-house, self-managed funds don't have. We can give them the advice, take them down that path to ensure that they get registered by September. That is like a tack-on to our investment advisory services.
SB: But what is it that sets you apart?
HH: The key thing that people should know about Prime Asset Management is that the only thing we do is to manage pension funds. We have no other kind of business and because of this it makes us unique among the competition. That's why we use the tag line 'focused pension professionals.'
At Prime, we feel that, especially now with the new act and the new regulations, managing pension funds is a specialist operation that people should consider seriously.
This is very important because the special skills that are needed to manage pension funds which is being able to look very long term with money since the liabilities of a pension fund are going to emerge 25, 30, 40 years down the line it means that you have to have the skill of understanding what an actuary does, what an actuary's role in pension fund management is; you have to be able to speak intelligently with actuaries and be able to give them accurate information to value the fund.
RB: We foster unique relationships with all our clients. We believe in relationship building and bringing a special expertise to each client. It's about service, service standards, performance, governance as we create partnerships with all our clients. Personalised service is very important to us. If there is a case where you feel we are not performing, call Joseph Matalon, call Herbert or myself and it will be resolved. And we are seeking to raise the bar in terms of trustees' continued education on topics such as the risk return trade-off, governance and tactical asset allocation.
SB: Talk about the company's
performance so far.
RB: We have about $8.5
billion under management and we have been growing, 18, 20 per cent per year, and that is not due to new businesses but most importantly based on our performance. The funds that we have managed have performed extremely well. There are two reasons for this: We are very strategic in our asset allocation, and also we take a diversified view to managing pension funds.
A lot of pension funds in Jamaica where the liabilities are due 20, 30 years down the road are still investing in money market instruments and that is a disservice to the members.
HH: We have invested heavily into technology by putting in new software from the United Kingdom, Last year, it was awarded the prize for the best piece of pension software available in the U.K. And that is why, in raising the bar in the industry, we can give our clients, by the 15th of each succeeding month, a statement of their portfolio.
SB: We now have the new pensions regulations which bring with it certain performance criteria. How is corporate governance important to you?
RB: The move to reform the pension industry is a good one because it brings a certain level of accountability and transparency and governance to the entire operations that weren't in existence before.
I think it is going to force trustees and mangers to become more involved in the management of funds. So in that sense it is good for the industry.
Corporate governance is extremely important. That's one of the things we bring to the table. We are seeking to raise the standard of performance, the standard of service, and the standard of governance to all pension funds. We draft statement of investment policies and principles as well as governance policies for pension funds.
Additionally, Prime Asset will assiduously avoid the potential conflicts of interest that are present in more integrated financial firms.
SB: What strategy do you have for the future?
HH: Our strategy is to be recognised as the best professional managers in the industry in this country. We have invested in quality persons aimed at generating superior investment returns and technology to drive quality service. We are also proud of the wealth of human capital evidenced by the quality credentials of our board.
At trustee meetings and presentations, it is these top professionals who always represent Prime. That is not customary in the industry.
In the end, we should be true to our mission which is to serve our clients by delivering high-quality service and superior investment returns.
The continued satisfaction of our clients defines our position as a premier, non-conflicted, focused pension management company.
