The National Insurance Fund recently bought a four per cent stake in Barita. (Photo: David Rose)
NIF buys 4% of Barita for $3.7 billion
The National Insurance Fund (NIF) recently spent $3.67 billion for an additional four per cent stake in Barita Investments Limited as it ramps up investment activities to meet its growing funding obligations.
The purchase took place on March 28 as NIF bought a 4.10 per cent stake of Barita from Cornerstone Financial Holdings Limited (CFHL), Barita’s direct parent company at that point in time. NIF purchased 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 ordinary shares valued at $4.26 billion as of Tuesday’s closing price of $72.21.
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This purchase puts NIF ahead of founder Rita Humphries-Lewin who is now the fourth largest shareholder, but behind CFHL and First Citizens Investment Services Limited, a subsidiary of First Citizens Group Financial Holding Limited (FCG). FCG appointed Jason Julien as its new chief executive officer following the retirement of Karen Darbasie.
This is the NIF’s largest purchase in 2025 after spending more than $11 billion on different equity positions last year. Its largest individual purchase last year was a five per cent stake in Wisynco Group Limited for $3.95 billion from 4JS Investment Limited on September 13. When combined with the additional purchase of shares during 2024, Wisynco is now the NIF’s second largest known equity position with a value of $4.70 billion at the end of 2024.
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In February 2024 NIF purchased $1.74 billion worth of NCB Financial Group Limited (NCBFG) ordinary shares from AIC (Barbados) Limited. The NIF also spent nearly $1 billion on NCBFG shares during its June 2024 additional public offering (APO). These purchases saw NIF ascend from being the eighth largest shareholder to the third largest in NCBFG with a stake worth $4.62 billion. AIC (Barbados) is the main holding company for NCBFG Chairman Michael Lee-Chin.
The NIF’s largest equity position continues to be GraceKenendy Limited (GK) where it holds a position worth $4.83 billion at the end of 2024. Other notable positions include Pan Jamaica Group Limited (PJAM) – $3.36 billion; Scotia Group Jamaica Limited (SGJ) – $3.26 billion; Sagicor Group Jamaica Limited (SJ) – $2.99 billion; Carreras Limited (CAR) – $2.80 billion; Jamaica Broilers Group Limited (JBG) – $2.75 billion; and JMMB Group Limited (JMMBGL) – $2.41 billion. The estimated value of NIF’s known equity portfolio across 18 securities was $39.82 billion at the end of 2024.
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The NIF was established in 1965 to provide financial protection to workers in Jamaica, including retirement, disability, and death benefits. It is the vehicle used by the National Insurance Scheme (NIS) to invest the NIS contributions received from employed individuals. Apart from NIS pension payments, the NIF also remits 17 per cent of NIS contributions to the National Health Fund (NHF), according to the Public Bodies Budget published by the Ministry of Finance & the Public Service.
The NIF is currently chaired by Professor Andrew Spencer who is the president of Caribbean Maritime University and former executive director of Tourism Product Development Company.
The NIF invests money into equities, real estate, money market instruments and other assets to generate a return which is needed to pay NIS benefits. According to the unaudited financials for the 2023/2024 fiscal year (April 2023 to March 2024), the NIF generated income of $11.78 billion with $10.64 billion being attributed to interest income while $1.02 billion was related to dividends.
The NIS received $57.33 billion in contributions from the employed labour force and remitted $9.55 billion to the NHF, which left it with a net inflow of $47.77 billion. These contributions were used to pay $28.78 billion in NIS pension payments, $776.66 million to the NIS Health Scheme and $1.55 billion to cover administrative expenses.
After accounting for all line items, the NIF recorded a net surplus of $28.33 billion for the period. The entity was stated to have $193.64 billion in total assets with $98.74 billion in investment securities, $33.90 billion in equities and unit trust assets. At the end of March 2024, $2.93 billion was recorded as payables and accruals with $190.71 billion in net assets.
The NIF estimated that it brought in $25.24 billion in income for the 2024/2025 fiscal year (April 2024 – March 2025) with $11.76 billion in interest income, $1.11 billion in dividends, $3.58 billion in revaluation gains on investment properties and $6.70 billion in unrealised gains on investments. The net inflow from NIS contributions was $48.79 billion which funded $29.75 billion in pension payments and $919.81 million for the NIS Health Scheme.
The net surplus for the 2024/2025 period was estimated at $41.23 billion. The asset base was estimated to have increased to $234.96 billion with $137.23 billion in investment securities and $24.68 billion in investment properties. The liabilities were estimated at $3.02 billion with $231.94 billion as the net asset value.
For the 2025/2026 fiscal year (April 2025 – March 2026) NIF projected that it would earn $26.18 billion in total income, collect a net inflow of $53.75 billion from NIS contributions, and pay $36.16 billion in benefits. The net surplus was projected at $40.84 billion with $272.78 billion in total assets and $272.78 billion in net assets.
The NIF has to improve its returns, based on a 2016 actuarial report that said it could be insolvent by 2033. This is due to the projected increase in benefits payable for an ageing population with a labour force that isn’t growing at the same pace. The agency was said to have plans to increase its staff complement from 29 to 37 during the current 2025/2026 fiscal year.
Cornerstone builds cash for deals
Following the sale of the Barita shares to NIF, Cornerstone Financial was estimated to own 874,181,183 shares or 71.63 per cent of Barita. CFHL’s move to sell shares in Barita comes at a time when it is moving to close a deal to acquire up to 70.10 per cent of Clarien Group Limited from NCB Financial Group Limited, Portland Private Equity Limited, and Edmund Gibbons Limited. NCBFG is set to sell a 30.20 per cent stake in the Bermudan holding company and retain a 19.90 per cent stake in the business. This deal is subject to regulatory approval.
CFHL, which received an estimated $1.82 billion dividend from Barita Investments on October 31, was seeking US$12 million ($1.86 billion) and $2 billion (US$12.74 million) in debt financing during February 2024 for further investments which included acquisitions.
Shareholders of Cornerstone United Holdings Jamaica Limited, parent company of Cornerstone Trust & Merchant Bank Limited and Barita Investments Limited, approved a reorganisation of the shareholdings in both regulated entities on January 20. That will see Barita Financial Group Limited (BFG) become the direct parent company of Barita Investments and the merchant bank. Cornerstone Financial Holdings will own 100 per cent of BFG. The booklet for the scheme stated March 18 as the court hearing date for the scheme which should have been sanctioned for March 31. However, a hearing was heard before Justice Stephane Jackson-Haisley on March 31 related to the scheme.
Cornerstone Financial’s moves come at the same time Barita Investments is executing its public bond seeking to raise between $3.96 billion and $6.15 billion to fund strategic asset acquisitions, improve its liquidity and investment banking capacity and refinance an unsecured bond.
