Group CEO Ahmad Nazim said the target is to have investments abroad account for at least 20% of its total investment portfolio.

The Akta Tabung Angkatan Tentera (TAT Act) was amended last year to enable the armed forces fund board to make strategic asset allocation its guiding principle in all its investment activities going forward, opening the way for it to seek investments outside Malaysia.

Currently, the LTAT does not have any investments in international assets.

Ahmad, who spoke to reporters after the LTAT announcement on its 2022 dividend today, said the proposal to invest overseas has been given the go-ahead by the finance and defence ministries but is still awaiting the green light from Bank Negara Malaysia.

However, Ahmad said, public equities would still be the mainstay for LTAT, accounting for 50% of its investments.

Apart from that, the fund hopes to raise its investments in fixed income from 13% as of Dec 31, 2022 to about 20%.

LTAT is also planning to invest in real estate, private equity and money market assets.

However, no specific timeline has been given to achieve the strategic asset allocation targets.

“We (have moved away) from illiquid investment, and (seek to) diversify further into more liquid investments,” said Ahmad.

LTAT had earlier divested its investments from Guocera Sdn Bhd, Lam Soon (M) Bhd and Ericsson Malaysia Sdn Bhd with internal rates of returns of 9.54%, 13.57% and 46.5% respectively.

On top of this, LTAT also made forays into high-rated corporate bonds and government securities for the first time last year.

“This is part of our effort to diversify our investment from a single entity in public equities to those across the board. (Our public sector exposure is) currently in 80 companies across 11 sectors,” Ahmad said.

He said the management would continue to strive to enhance the fund’s liquidity, moving away from both illiquid investments and single-entity exposure.