The Tuvalu Trust Fund is a sovereign wealth fund. It is a state-owned investment fund comprised of money generated by the Government.
The official signing of the ‘International Trust Fund Agreement’ (the Deed) was on the 16th June 1987.
The original partners to the Deed were the Governments of Tuvalu, Australia, New Zealand and the United Kingdom. In 2004, the UK withdrew from the Deed and is no longer represented on the Board.
The CIF is the buffer account of the Tuvalu Government and it holds unspent TTF distributions or any other Government excess revenue. The CIF belongs wholly to the Tuvalu Government and has the right to draw down any time. In contract to the TTF where it is subject to the terms of the International Trust Fund Agreement (Deed).
In their first implemented consulting partnership, the Board of the Tuvalu Trust Fund has appointed Mercer for asset consulting and portfolio implementation services for their A$200 million portfolio, following a competitive tender.
Mercer has also been appointed to manage the investment implementation of three additional funds overseen by the Board totalling approximately $80 million in assets: the Consolidated Investment Fund, Climate Change and Disaster Survival Fund, and Falekaupule Trust Fund.
By appointing an implemented consultant, the Board of the Tuvalu Trust Fund sought to strengthen the Fund’s capacity to provide long-term financial viability and a reliable source of revenue for the people of the South Pacific island nation.
The Hon. Seve Paeniu, Chair of the Board and Minister of Finance, Tuvalu, said the need for an implemented consultant reflected the growing maturity of the Fund.
“The Tuvalu Trust Fund has grown significantly in a short time, particularly in the last decade. We look forward to working with the Mercer team to take the Fund from strength to strength, ensuring its sustainability for future generations,” Minister Paeniu said.
“Mercer’s multi-manager approach allows us access to best-in-class managers, as well as a broad range of investment styles and asset classes, while ensuring alignment with our investment beliefs. Diversification in these factors allows us to take full advantage of the long term nature of the Fund to improve returns without the cost of additional risk. And, the integration of environmental, social and governance factors is important to us as Tuvalu is particularly susceptible to the adverse impacts of climate change.
“By outsourcing our investment implementation to Mercer, we can stay true to our investment purpose, beliefs and objectives, leaving resource intensive tasks to those that have specialist capabilities,” said Minister Paeniu.
Craig Hughes, Head of Investment Solutions, Pacific, Mercer, said the firm was increasingly seeing asset owners turn to implemented consulting.
“Managing a portfolio in this economic climate is becoming increasingly complex, and access to certain asset classes is challenging without deep knowledge and significant scale,” Mr Hughes said.
“More and more, we are seeing clients come to us to outsource their investment needs for this access and expertise. It is contributing to a reduction in their overall costs and allowing them to focus on the many other challenges facing their organisations.
“We’re delighted to be partnering with the Tuvalu Trust Fund to strengthen the sustainability of the Fund and support the prosperity of the people of Tuvalu,” he said.