Passport sale fund makes profit, loses money in BOV, Lombard holdings

The National Development and Social Fund, Malta’s posterity fund for revenues from the sale of citizenship to the global rich, has registered a net profit of €3.25 million in 2019 after a sudden downturn in invested stocks the previous year. 

In 2018, the NDSF lost €3.14 million in difficult market conditions of 2018, due to investments made by the Central Bank appointed investment advisor. 

During 2019, NDSF received €106 million from the Malta Individual Investor Programme (2018: €100.6 million) so that the total amount of proceeds received from 2015 to 31 December 2019 amounted to €572.1 million. 

Total assets now include €195.29 million held in foreign and domestic financial investments and €371.87 million in cash and cash equivalents. 

The assets held in the discretionary portfolio, managed by the Central Bank and invested in high-quality bonds and equities, amounts to €103 million. The total return from these investments was of €5.56 million compared to the €2.45 million loss in 2018. 

The directed portfolio that is managed in-house by the NDSF itself, amounted to €95.21 milion (2018: €89.18 million). This consists solely of domestic assets, 93% being local equities and holdings in Bank of Valletta and Lombard Bank Malta. The other 7% is held in local corporate bonds. The total return amounted to a loss of (€2.31) million compared with a loss of (€0.69) million in 2018. 

“This negative return was largely attributable to the negative fair value movements in the two largest holdings mentioned above,” the NDSF said. 

The directed portfolio is used to fund social and economic initiatives, which may or may not have a direct financial return to the fund.  

Another unallocated portfolio of the fund, holds a cash balance with the Central Bank of €371.87 million. 

During 2019, NDSF committed over €90.5 million towards health, social accommodation to sports. The major part of this allocation will be directed towards providing a substantial number of social housing units over a three-year period. The second largest allocation of funds was committed to the primary healthcare sector.  

On the 29 January 2020, Heritage Malta on behalf of the NDSF, successfully participated in an online auction by Sotheby’s New York to acquire Mattia Preti’s monumental oil on canvas, ‘Boethius and Philosophy' for a total consideration of $1.49 million. This painting was the property of the state before it ‘mysteriously disappeared’ as confirmed by a watercolour painted by Charles de Brockdorff (1775-1850), an artist active in Malta by 1810. The watercolour, which is preserved today in the Museum of the Order of Saint John, shows the Mattia Preti masterpiece hanging in the North West corner of the antechamber in the Grand Master’s Palace in Valletta. This acquisition falls within one of the aims of the NDSF, to protect and enrich the cultural and artistic heritage of our country. The NDSF will own the asset but will lend the masterpiece for an indefinite period to Heritage Malta for the benefit of present and future generations.