KUALA LUMPUR (March 12): Lembaga Tabung Angkatan Tentera, which manages the Malaysian armed forces’ pension fund, plans to increase its exposure to more liquid assets to boost income.

The fund aims to raise allocations to public equities and fixed income to at least 20% each by 2030, from 10.2% and 11.8% respectively as at end-2025, said Mohammad Ashraf Md Radzi, chief executive officer of the fund also known as LTAT.

“As a retirement fund, our bread and butter is public market products,” Ashraf told The Edge. “We need to grow our listed equities and traded fixed-income exposure…to reach a level where we have adequate recurring income and liquidity.”

The move forms part of LTAT’s five-year strategic road map under Gempur30, which seeks to rebalance the fund’s investment portfolio while strengthening its long-term sustainability.

Assets deemed strategic accounted for 58.5% of LTAT’s portfolio as at end-2025, making the segment the second-largest contributor to income at 19% among all asset classes.

“By 2030, our goal is to reduce strategic assets to about 35%,” Ashraf said.

Overall in 2025, LTAT generated total investment income of RM749.49 million, with real assets contributing the largest share at 38%, or RM286.5 million. Strategic assets provided income of RM140.2 million and public equities RM139.9 million. 

Under the transformation plan, LTAT intends to optimise and rebalance its portfolio through selective divestments and reinvestments, allowing capital to be redeployed into sectors with stronger long-term growth prospects and strategic relevance.

Ashraf said the fund may undertake transactions involving some of its strategic holdings as part of the restructuring process, although details have yet to be finalised.

“We need to go through the various processes for each identified one, but the idea is we will do it [on] a structured basis,” he stressed.

LTAT currently has total assets under management of RM13.36 billion, down 2% year-on-year, mainly due to net withdrawals and the absence of dividend income from Affin Bank Bhd (KL:AFFIN), one of the fund’s main investments.

The fund is the third-largest shareholder of Affin Bank, the country’s second-smallest banking group by assets, with about a 22% stake, or 535.35 million shares, as of Feb 24.

LTAT also has an indirect and direct stake of 43.9% in Pharmaniaga Bhd (KL:PHARMA), which is showing what Ashraf described as “encouraging signs of recovery” and on track to exit Practice Note 17, a status for financially distressed firms, in the near term.

In total, LTAT declared a dividend of 5.35% for FY2025, its highest payout in eight years, amounting to a total distribution of RM524.74 million to contributors. The fund also saw its reserve fund increase to RM1.3 billion, compared with RM1 billion in 2024.

Defence Minister Datuk Seri Mohamed Khaled Nordin

Defence Minister Datuk Seri Mohamed Khaled Nordin, who officiated the event, said LTAT’s Gempur30 transformation road map will place the fund on a stronger footing to manage the retirement savings of Malaysia’s armed forces personnel.

“With the strategic plans that have been approved under Gempur30, we believe LTAT is on the right track to continue managing the savings of our armed forces members while delivering sustainable returns,” Mohamed Khaled said. 

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Malaysia’s armed forces pension fund LTAT declares highest dividend in eight years at 5.35%