Biz Day UTC succeeds in challenging investment climate in Trinidad & Tobago
Petroleumworld 06 06 2018
The Unit Trust Corporation (UTC) may have faced a challenging investment climate in 2017, but outgoing executive director Ian Chinapoo credits prudent investments for higher net returns on four of its seven funds.
"The entire economy was depressed, there wasn't as much people coming in, doing business. So, the companies we have shares in would not have had as good a year. That means they would not have had the share price appreciation or distributions (of) prior years but we were very prudent in our investments.
"We kept the amount we invested going and the balances kept growing. We are very conservative investors, so the companies we invested in, although they did not do as well as before, they still did okay. They didn't incur losses."
Chinapoo was speaking with the media following UTC's 36th annual general meeting (AGM) at the National Academy for the Performing Arts, Port of Spain on May 23.
UTC's total revenue for the financial year ended December 31, 2017 was $1.1 billion. Its flagship Growth and Income Fund generated a net return of 5.4 per cent, more than double the return of 2016, while the Universal Retirement Fund saw a net return of 6.2 per cent, up from 2.2 per cent in 2016.
The UTC also reported a 1.5 per cent increase in funds under management to $21.9 billion. Retained earnings the corporation's accumulated savings grew by 4.7 per cent to $1.4 billion. In addition, its customer base grew by 1.1 per cent from about 603,000 unit holders to 609,000 unit holders in 2017.
"Total assets increased $197.6 million to $21.9 billion, while retained income attributable to unit holders increased seven per cent to $283.4 million We will continue to explore opportunities that will improve returns on your investments and leverage our longevity as the county's leading mutual fund company."
Citing independent market research, Chinapoo also told unit holders "We take great care in managing our brand and we have maintained our dominance in the market...You should be proud of the fact that the home-grown UTC is among the top four in brand awareness in the financial services sector and number one in corporate image."
Asked to what he credited a larger customer base in the midst of hard times, Chinapoo said the UTC always puts customers first.
"Other companies have had a challenge in keeping the focus on the customer (but) we are still very welcoming. We create convenience with technology but we are still very, very focused on allowing people to do business with us as best as they can. So, from that standpoint, I don't think it was all about just the economic situation. I think people love working with the corporation."
UTC also increased its footprint with the opening of three new agencies Heartland Plaza in Chaguanas, C3 Centre in San Fernando and Canaan, Tobago.
Unit holders also heard from UTC chairman Justice Rolston Nelson, who said "despite vigorous competition, the UTC continues to hold a market share of 46.8 per cent as at December 31, 2017.
"We are constantly reviewing the way we do business and assessing our business opportunities, risks and operating environment to deliver the appropriate mix of products and services that add value to your financial well-being."
Nelson noted, however, if the UTC is to sustain growth and remain competitive, further amendments must be made to the Unit Trust Corporation of Trinidad and Tobago Act (1981).
"We need to revisit the legal framework governing the corporation, because the investing landscape has changed significantly and we need to capitalise on opportunities as they arise. Legislative changes are necessary if the corporation is to optimise its investments in a competitive environment. It is our intention to work towards reforming the Act, allowing us to continue to adapt as an independent financial institution that plays a critical role in the financial sector."
When Chinapoo was asked about Rolston's statement, he said "things like derivatives and options did not even exist" when the Act was proclaimed, so it needs updating.
"Also, our Act does not allow us to do certain things. For example, in financial landscapes now, you can actually buy products that would mitigate your risk. Say a stock price is falling, you can buy a product that says if it reaches a certain price, it will automatically be sold.
"Amending the Act will allow for greater flexibility we will be able to do things other financial institutions are already doing. This is modernising, doing things that others are already doing globally. Unit Trust is now an entity that invests globally, so these are practical improvements we're looking to do," Chinapoo assured.
The process began a few years ago but with Chinapoo's last day in office being today (May 31), the push for further amendments will be led by Nigel Edwards. Having joined the UTC in 2013 as CFO, Edwards officially assumes the role of ED tomorrow, June 1. Chinapoo would take up the role of chief financial officer (CFO) at Massy Holdings Ltd.
"We have been working on it for some time, so we do have draft Act amendments. They are being reviewed by our regulators the TT Securities and Exchange Commission, the Central Bank as well as the Chief Parliamentary Counsel because we are governed by an Act of Parliament and of course, the Ministry of Finance. So yes, (Edwards) will continue to champion that, along with members of the board, as we seek to improve the legislative framework Unit Trust operates with."
Earlier, while addressing unit holders, Chinapoo said "it has been a privilege to be a part of this prestigious institution for the past five years and work among a team of professionals who are passionate about service and value creation and who are committed to meeting your needs."
Reflecting on his biggest accomplishment as ED, Chinapoo told reporters he could cite strengthening the financials and improving customer service, which were a major focus of his tenure but most important to him were his co-workers.
"Building such a high-performing team. Across the organisation, we pioneered something. I don't know if this is a real word but we call say de-siloisation. We brought the staff together as one team, so we are able to see the customer across the corporation as one team.
In business terms, the silo mentality occurs when departments or management groups do not share information, goals, tools, priorities and processes with other departments. The silo mentality is believed to impact operations, reduce employee morale and may contribute to the overall failure of a company or its products and culture.
Chinapoo said of de-siloisation: "That would be my greatest accomplishment. It involved an element of culture change, change management but it was also about giving people the freedom to fail and to be innovative. Innovation for us was a process, it wasn't a by-the-way thing.
"Our innovation unit, our team members' engagement, our level of engagement is close to 70 per cent we don't even call them staff, we say team members. I'm sure this will be something that continues very strongly," Chinapoo said with a smile.
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Sasha Harrinanan from Trinidad & Tobago Newsday
newsday.com 06 06 2018
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