First Heritage Co-operative Credit Union Limited (FHCCU) is exploring the opportunity to bring onboard a private equity partner to support the recovery of its subsidiary, FHC Investments Limited.

FHCCU’s members approved a special resolution at the 14th annual general meeting (AGM) held on September 10 at AC Hotel, which gave the credit union permission to divest up to 100 per cent of its ownership and shares in FHC Investments.

“Against this background, FHC is actively pursuing opportunities to bring a private equity partner into FHCIL to provide additional capital, support its recovery and reposition the subsidiary for sustainable growth,” FHCCU stated in a press release on its AGM.

When asked if it had found any interested partners so far or if the subsidiary would be sold if a private equity partner cannot be found, FHCCU told the Jamaica Observer, “While we appreciate the question, we do not wish to comment at this time, given the sensitive nature of this matter at this early stage.”

FHC Investments is a securities dealer which offers portfolio management, pension management, investment advisory and other financial services. The investment house is listed as a member-dealer/broker with the Jamaica Stock Exchange (JSE), which means that it can facilitate the trading of financial securities on the local stock market.

FHC Investments reported a $53.98-million net loss in 2025, making it the fourth consecutive year that the subsidiary has reported a net loss. It reported net profit of $3.63 million in 2021 before hitting cumulative net loss of $120.68 million between 2022 and 2024. The losses came against a smaller revenue base of $77.52 million and expenses of $132.33 million in 2025, including $88.25 million in staff expenses.

“To accelerate revenue growth, FHCIL expanded its sales capacity by hiring three additional sales staff. However, anticipated sales inflows did not materialise at the required pace, causing fixed costs to increase ahead of revenue realisation, resulting in a structurally imbalanced cost base during quarters 1 and 2 of 2025,” FHCCU stated in its 2025 annual report.

FHC Investments undertook an internal restructuring of its operations during the second half of 2026 which saw a focus on higher-margin, fee-based activities and disciplined expense governance. That took shape via stronger cost controls, rightsizing sales-related costs, and aligning staff levels with revenue productivity. The changes resulted in FHC Investments trimming losses while reporting an operating profit for two months in the second half of 2025.

FHC Investments’ management team is now focused on restructuring the business model which includes strengthening recurring revenue streams like portfolio management and advisory fees. The 2026 focus also centres on structured treasury income to improve earnings visibility, cash flow stability and operating leverage.

“The strategic focus will be on actively exploring opportunities to acquire a private equity partner that can provide well-needed capital input into the business, to support its recovery and realign FHCIL towards a growth path,” the FHCCU annual report noted.

In 2024, FHCCU restated its standalone audited financials and recognised an impairment provision of $270 million on its investment into FHC Investments. This was required under accounting rule IAS 36 which necessitates the review for the impairment of an asset. As a result, FHCCU’s net profit for the year was restated from $330.56 million to $60.56 million.

“The review was triggered by objective internal indicators of impairment, specifically sustained operating losses incurred by the subsidiary over the past three consecutive financial years, alongside a lack of projected turnaround in the foreseeable future,” FHCCU’s audited financials stated.

Before any sale of FHC Investments is approved, FHCCU will obtain an independent valuation or fairness opinion and seek all required approvals to protect the interests of its members. The FHCCU board must also be satisfied that the final terms are fair and reasonable while being commercially reasonable.

“The board believes that pursuing a sale is a prudent step in the best interests of the credit union, its members, depositors, and other stakeholders,” stated a document on the special resolution.