Businesses of the private sector discuss the Pension Fund investment strategy

Prishtina, September 1, 2020 – The American Chamber of Commerce in Kosovo organized a virtual forum during which the investment strategy of the Pension Fund as well as the opportunities offered for the private sector in Kosovo were discussed. During this forum, AmCham member business representatives had the opportunity to receive information about the structure and criteria of this strategy.

Hekuran Murati, Chairperson of the Parliamentary Committee on Budget and Transfers, while emphasizing that the supply of financial products in Kosovo is somewhat limited, stated that companies need to consider investment needs based on their life cycle. According to Murati, access to finance is usually more problematic for startups compared to more established businesses which may be more predictable for the lending sector. He emphasized that due to the limitations deriving from the Law on Central Bank of Kosovo, any financial activity must be licensed by this institution. According to him, while this protects the consumer especially considering the low levels of financial literacy, it also limits innovation within the finance sector. Regarding investments, Murati stated that a great challenge is to establish links between individuals or entities with investment funds with those who need investment. He further stated that the Pension Fund encounters problems for direct investments in the private sector, due to the inability to deal with cases of individual lending, difficulty in determining the structure of the investment, as well as the principle of valuing the return on investment.

The Managing Director of the Pension Savings Fund, Adrian Zalli, stressed that this fund currently has assets worth over two billion euros. According to him, pension assets of the Kosovo Pensions Savings Trust shall only be invested in order to maximize returns on investment solely for the benefit of participants and beneficiaries; whereas, the goals of prudent investment for pension assets are defined by the Law on Pension Fund. Zalli stated that these principles must guarantee the security of pension assets, diversity of investment, maximum return consistent with security of pension assets and maintenance of adequate liquidity. He emphasized that the principle of the Board of Directors of this Fund is to invest as much money in Kosovo as possible, through participating in the securities market, which then the Government of the Republic of Kosovo invests where it’s most needed. According to Zalli, the Pension Fund is currently in the process of creating separate portfolios for different age groups of contribute payers, through which it will be easier to manage the investment risk for contributors.

Mërgim Cahani, CEO of Gjirafa, while speaking of a ten-year period noted that now the companies with the highest value are undoubtedly those in the technology sector. Cahani mentioned the fact that the greatest potential for the economic development of the country lies precisely in this sector, therefore it should be supported more through the creation of investment opportunities within the state. Cahani stressed that the lack of opportunities orients companies towards foreign investments, which causes the decrease in revenues to the state budget, since the return of foreign investments does not remain in circulation within Kosovo but returns to the investor.

Valdrin Kasumaj, Board Member of the Kosovo Pension Trust stressed that restrictions within the legal mandate of the Pension Fund affect its ability to support businesses in Kosovo, while adding that during 2020 the Fund’s participation in the securities market has increased.