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MPLT policy change results in investment growth
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Posted on Jul 06 2008
A 2006 change in investment policy has paid off for the Marianas Public Land Trust.
MPLT saw its security investments grow by $5.4 million in the 2007 fiscal year, according to the Office of the Public Auditor’s summary of a Deloitte audit of the Trust. The increase came after MPLT decided two years ago to place more securities in fixed income rather than in equities to provide for a steady stream of cash flow to the general fund.
For FY 2007, MPLT investment in equities totaled $26 million, down 1.66 percent from $26.4 million in FY 2006. Meanwhile, fixed income securities gained $5.8 million or 18.7 percent from $31.1 million in FY 2006 to $36.9 million in FY 2007.
MPLT had 41 percent invested in equities and 59 percent in fixed income securities for FY 2007.
“OPA commends MPLT’s trustees for the financial improvements realized in FY 2007, and the strengthening of MPLT’s financial condition,” OPA said.
MPLT employs the services of professional money managers to manage the assets of its two trusts—one for the benefit of the General Fund and the other for the maintenance of the American Memorial Park.
The allocation of these securities may change over time due to changes in investment policy decisions. These securities consist of equities, fixed income securities, and economically targeted investments.
The FY 2007 audit, done by the Deloitte accounting firm, revealed MPLT’s total assets increased by 12.2 percent, or $8.4 million, from $68.6 million in fiscal year 2006 to $77 million in FY 2007.
“MPLT’s overall financial condition substantially improved in fiscal year 2007. The change was marked by increased investments, increased income, and decreased operating expenses. These changes caused total assets to increase,” OPA said.
Under the Constitution, the Department of Public Lands is tasked with managing leases of public lands on behalf of the people of Northern Marianas descent. After deducting administrative costs from the collected fees, Public Lands transfers the balance to the Marianas Public Land Trust. MPLT then invests the money. Income earned from those investments is transferred to the general fund for appropriation by the Legislature.
