"We are 100% debt funded,” Rafael Consing, president and chief executive officer of the Philippines' new Maharlika Investment Fund (MIF), states bluntly, opening the conversation in an unexpected manner.
“That's the reality because the country is operating in a fiscal deficit," he adds.
The sovereign wealth fund was, in its initial structure, 100% equity funded, with seed capital totalling P125 billion ($2.1 billion) from the Land Bank of the Philippines, the central bank and the Development Bank of the Philippines.
Consing, a seasoned veteran with three decades of experience in global capital markets and corporate finance, took the helm of MIF, enacted in July 2023, in November. He is now in the process of assembling a team of 32, including nine investment professionals.
Almost immediately, Consing faced criticism over the term 'sovereign wealth fund', as such funds typically invest with fiscal surpluses. He concedes that the fund's initial contributions could have been used to retire government debt, leading him to define the fund as “debt-funded.”
“The reason why I have to look at it that way is because that context impacts your view on returns and your investment destination,” Consing explains.
