The new Chief Executive Officer of Papua New Guinea’s largest superannuation fund has hit the ground running. Business Advantage PNG met up with Garry Tunstall to discover his plans for Nambawan Super.

Nambawan Super’s Garry Tunstall

With 131,000 members to look after and K3.8 billion (US$1.48 billion) in assets, there’s no bigger job in Papua New Guinea superannuation than running Nambawan Super. This task has now fallen to Garry Tunstall, a man familiar with PNG through a previous position as country head for ANZ—a role which ended in 2009.

Tunstall says his first task, already under way, is a hundred-day appraisal of the fund.

‘We’ll be having a look at the operation, looking at our leadership quality and capability, our capacity to drive our business forward, and all the infrastructure that we need,’ Tunstall tells Business Advantage PNG. ‘Most importantly, we’ll be looking at the services and products we provide our members and where we want to take them in the future.

New hires

The process of re-vamping the fund has already commenced, with a new Chief Investment Officer, Michael Block, joining the fund earlier this year, and a new Chief Financial Officer expected early in 2014.

Given the healthy growth achieved by PNG’s superannuation industry in recent years, it’s not a bad time to be joining Nambawan Super.

‘The business itself is very, very sound,’ acknowledges Tunstall. ‘It has a very sound asset base, returns have been very good and strong over a number of years, and the board is obviously wanting to see that continue.

‘I think the country still will grow, but we have seen an easing of support for residential housing prices and rentals.’

‘It also wants the fund to move to world’s best practice standards. We’re looking at funds from around the world and how they operate to make sure that we run in line with them.’

Will growth continue?

The fund grew its asset base by an impressive 15% in the 2012 financial year and has averaged asset growth of just over 10% over the past five years. What are the prospects of that level of growth continuing?

‘Growth has been astounding in the last five years,’ says Tunstall. ‘That has really been about the PNG LNG project largely, and the infrastructure that’s required to support it, as well as other investors then seeing the opportunity to develop and build commercial and residential property.

‘I think the country still will grow, but we have seen an easing of support for residential housing prices and rentals. We’ve seen commercial rents starting to ease off a bit. Obviously, the kina has run down over recent months in terms of its value, and that’s a result of a lack of investment coming into the country, and lack of exports and probably lower commodity prices generally.’

Investment strategy

In recent years, both Nambawan Super and its main rival, Nasfund, have been major local investors, not only in property but also in both listed and unlisted equities. Tunstall says the fund’s investment strategy is always open to review.

‘We’ve got a strategy to maintain ratios in certain investment areas such as property, shares, and so on. I still see that there’ll be some growth in the property market—whilst it’s easing, I don’t think it’s going to stand still totally.’

Tunstall identifies government infrastructure projects as another area of significant potential:

‘Government does provide good returns these days through bonds and other areas, so that’s an opportunity for us. I don’t believe infrastructure—roads, power, water—has kept pace with what’s required.’

New member services

Tunstall says the fund is also looking at what additional services it can offer its members.

‘I’d like to be able to provide services to our members directly by mobile phone, as an example. Life insurance is another area where I think we could probably improve on and develop.

‘Members in outlying areas sometimes find it difficult to get quick and easy access, so I think that’s something we’ve got to work on. Technology will be the key to developing that in the future.’