These two services are specifically designed to enable trustees of staff pension funds, staff welfare schemes and corporate fund manager establish the proper framework for the operation of their funds and to undertake imaginative investments.
Clients using this service will pass on the day to day monitoring of their investment and the active management of their portfolio to TYSL subject to pre-age criteria.
Generally, the aims of this service for fund managers are:
1. To provide sufficient capital gains and income to meet existing obligations.
2. To provide sufficient increase in the value of fund to compensate for the impact of inflation on future payments.
3. To provide a diversified basket of financial assets such that a decline in one sector of the economy is compensated by an improvement in another.
4. And also monitor actively the performance of the securities invested in applying the acceptable mechanisms within the capital market.
To facilitate the realization of these objectives, TYSL will review the existing Trust Deed and Rules and Regulations governing the operations of the fund and ensure that
• The Deed incorporates discretionary power enabling the Trustees’ Managers to invest in various securities having satisfied themselves that such investment are of an acceptable risk
• Additional desirable benefits are incorporated in the scheme in line with current practice. This aspect will be fully discussed and agreed with the trustees.
• The scheme complies with the requirement of the relevant Income Tax Management regulations.
Any revision of these documents will require the approval of the Trustees, clearance with the Company’s solicitors, final approval from the Joint Tax Board for Tax Exemption purpose and registration. It will also be necessary to engage the services of an actuary to value the fund and determine its liabilities in line with the Joint Tax Board requirements.
In managing a client’s fund or scheme, TYSL will structure a portfolio or investment compromising a wide range of financial assets from long-term debt and equity securities to short-term debt and equity securities to short-term money market instruments.
The overall liquidity of this is given priority consideration and usually an estimated portion of the investment is in short-term deposits or other money market papers. By this approach, calls on the fund to meet due liabilities or claims are promptly settled.
When appointed to manage a fund, TYSL undertakes the following functions:
Attend meetings with the Trustees of the fund. These meetings would be to set or review the general investment objectives and policy guiding the operation of the fund and to discuss outstanding Issues. TYSL may also refer from time to time, major or critical investment decisions to the Trustees for concurrence. The fund will be managed within set investment parameters.
a) Review the progress of existing investments particularly in relation to the liabilities of the fund. These TYSL would expect to be assessed by an actuary at least once every five years as required by the Joint Tax Board or as may be agreed between TYSL and the Trustees/Pension Fund Board. So far as possible, the investments of the fund should be matched to the amount and term of the gratuity and pension benefits to be paid out of the client’s Scheme. Changes in either the performance of investment or liabilities of the fund of a client may necessitate a change in the investment policy.
b) Consistently monitor the performance of securities within the portfolio and if desired dispose or acquire securities for the fund. The basic objective in portfolio construction is to achieve maximum return at an acceptable level of risk. TYSL will, therefore, attempt to achieve a degree of diversification as agreed with the trustees.
c) Prepare an Annual Report on the investments of the fund. The Report will review the investment market during the past years; give an overview of the investment market during the following year; analyze the performance of a client’s investment portfolio during the past year and make recommendations for the following year.
d) Investment money contributed or generated internally by the fund. As an active participant in the Capital and Investment Market through its Investment Management Group and related Stockbroking Operations, TYSL is in a good position to acquire attractive Investment on behalf of a client and to take and implement such decisions as to ensure that the best of a client are served.
TYSL will not be responsible for such administrative functions of an investment portfolio as preparing accounts. This function will be performed by the accounts and administrative department of the client’s Company.
Overall investment policy and asset allocation targets for each fund are set by the Corporate Finance and Investment Committee Group of TYSL which compromises the Management of Corporate Finance Sector. These guidelines are set within the investment parameters agreed with the client and reviewed at quarterly intervals, or more frequently, if necessary. The Group draws on the experience of the Groups industry specialists, Research Division; and its Stockbrokers to set broad policy guidelines based on the macro-economic and capital market outlook.
TYSL depends on in-house original research from Company analysts and industry specialists and economists within the Company as well as outside sources.
For advising and managing the scheme funds, TYSL will be paid annual fees for the time spent specifically on a client’s work by its officers. TYSL will also be reimbursed for other costs and out-of-pocket expenses incurred in the performance of its management and advisory functions. The annual fees is to be agreed with the client, however, it ranges between 1% to 5% of the fee.
However, where a client decides to take a more active interest in his portfolio, TYSL may be appointed adviser to fund rather than manage. In this case, TYSL will endeavor to perform the following functions in addition to (i),(ii), and (iii) under the Manager’s functions:-
i) Present details of new opportunities to fund. As an active participant in the capital market and through its stock broking operations, TYSL is in a unique position to introduce attractive investment opportunities to the fund.
ii) Regularly monitor the performance of the securities in the portfolio and advise on selling or switching of securities if necessary.
iii) Appraise proposed investment of the fund and give appropriate recommendation. Each investment will be analyzed in relation to its expected return and perceived risk. Comparison will be made with other securities of similar risk. Investment advice will be given as to whether or not to participate in a proposed investment.
iv) Provide general advice on the state of capital and investment market. TYSL will provide clients with latest information available on events and development affecting the market.
The fees payable on the two services will depend on the nature of service required and time spent on the job by our officers. This will normally be negotiated prior to commencement of work.