Sovereign wealth fund confident it can survive without citizenship cash
With no more cash from the sale of golden passports, what will the NDSF do?
A sovereign wealth fund with more than €700 million in assets is confident it can survive now that funds from Malta’s citizenship scheme have been cut off.
The National Development and Social Fund (NDSF) was set up in 2015 to receive, invest and distribute money previously generated mainly from the citizenship-by-investment schemes. It said in its latest annual report that last year’s European court decision on Malta’s citizenship-by-investment scheme halted its main source of revenue.
Under the scheme, which has now been replaced, 70% of the fees paid by applicants for citizenship went to the NDSF.
The board expressed its belief that the court decision does not impinge on the NDSF’s ability to continue operating and fulfilling its functions and duties. It said the fund has a stable asset base, with significant income coming from its extensive investment portfolios, as well as a withdrawal policy governing how the NDSF’s money is distributed.
The fund’s board and management, together with the home affairs ministry, will continue to explore potential alternative sources of funding, the annual report for 2024 said.
Allocations
By the end of 2024, the NDSF had approved grants and donations totalling €141 million. It said in the report that most of this money will be directed towards providing many social housing units over a four-year period.
The second largest allocation will go towards the development of the Malta Motorsport Hub and Racetrack at Ħal Far followed by primary healthcare and palliative care.
It also bought ownership stakes in two local banks.
In 2017, the fund bought a 2.88% stake in Bank of Valletta, valued at just under €29 million in 2024.
It also bought a 49% stake in Lombard Bank from the now-defunct Cyprus Popular Bank. The NDSF said in its annual report it would “continue to assess” its strategy on its major shareholding in Lombard. At the time of the 2018 Lombard Bank purchase, the NDSF had described the purchase as a temporary measure intended to help the Cypriot shareholder exit and fulfil its mandate to support business and enterprise. The fund said it would seek to reduce its shareholding in Lombard “in an orderly manner” and in the right market conditions.
More recently, the Malta Football Association announced it would receive a €6.9 million grant from the NDSF, which would help wipe out its €4 million accumulated deficit.