The Jamaican stock market is way down and causing pain to many financial sector players who charged in like the Light Brigade. Many now have to reconsider and make adjustments while Jamaican equities continue to tank.

VM Investments Limited (VMIL) is restructuring its portfolio as it endeavours to reduce its exposure to risks associated with volatility in the stock market.

The move follows a decline in the group’s income from a decline in profit attributable to shareholders from J$716.59 million in 2022 to J$198.44 million last year. As a result, earnings per share fell from 48 cents to 13 cents.

“So 2033 was, obviously, a very tough year for us… Last year, our net profit, based on the challenging circumstances of the environment, fell to $198 million,” explained VMIL chief executive Rezworth Burcheson.

He pointed out that VMIL was not uniquely impacted by a high inflation and high-interest rate environment but, like other companies in the financial sector, felt the effects of a depressed equities market.

The holding company, which is also the wealth management arm of the VM Group, manages private equity, corporate loans, and capital markets segments as well as owns a stake in listed company Kingston Properties Limited. All the businesses, Burcheson said, did well despite the downturn in profits.

In 2013, VM Wealth received $1.5 billion in capital from the group. That injection, Burcheson said, helped the group meet its capital adequacy ratio.

The group saw reductions in net interest income, fees and commission income, gains from investment activities, and dividend income. At the same time, the company saw its expense line items increase. 

Looking ahead, Burcheson said the company will be looking to generate value from its acquisition of Republic Funds Barbados, which is now VM Funds Barbados.

“Barbados is key, reason being asset management is going to be a key pillar of the business. We want to be one of the top-performing asset managers in the medium term,” he disclosed.

He added that there are opportunities in the private equity space that VMIL is looking to take advantage of, despite the large number of players in Kingston. In this regard, he said that while some companies are focused on the higher end of the private equity market, VMIL will be looking to provide capital to companies needing between J$2 million and J$5 million.

“So, our assessment says that there are pockets of value at a particular price point, in a particular industry. So we want to have as much…dry powder as possible to capitalise on those opportunities,” Burcheson explained.

At present, the company has a stake in the manufacturing company Home Choice Limited. In addition, VMIL has capitalised the Jamaica Small and Medium-sized Enterprises Fund – a private equity fund for MSMEs with US$10 million.