Botswana Public Officers Pension Fund (BPOPF) has in its quest to invest in the Botswana economy come up with specific allocation to Botswana alternatives including private equity, infrastructure and strategic investments.
Speaking recently at a media briefing to announce BPOPF’s performance overview and interest declaration, BPOPF Acting Chief Executive Officer Lesedi Moakofhi said that BPOPF is pioneering a path of private equity investing in Botswana. This, she says, came about after the realisation that institutional investors have never been keen to take an active role in private equity due to perceived lack of investable opportunities, especially in Botswana. “BPOPF believes there are a lot of great quality opportunities in the unlisted space, that needs private equity partners to unlock,” she said.
She indicated that procurement services for the private equity practitioners to help the fund unlock these opportunities were ongoing. “Equity space partners had been appointed and given P500 million to manage, another P300 million tender is coming up,” Moakofhi said.
Moakofhi also said that the BPOPF is also trend-setting on infrastructure investment, strictly for Botswana, with a fund set up to look only at Botswana opportunities. Just like it’s the case with private equity investment, she revealed that a total of P800 million was set aside for this investment.
A P500 million tender has already been run and though she could not reveal which company has been appointed as partners in this investment, Moakofhi said, partners will be appointed before the end of this year.
These new projects, she says, will also create employment opportunities for Batswana. All these ventures, according to the deputy CEO, will position BPOPF as a key player in the local economy and widen up members’ investments. These constitute a new investment strategy and investment policy statement that will run up until 2016.
The specifics of the new strategy are such that the focus will be on the members, on Botswana economy, and more diversified. It is including more assets at strategic allocation level and will focus on new themes such as introduction of inflation-linked bonds and international property.
Meanwhile, BPOPF has declared interest for the year-ended 2014 as 12.25 percent for Active and Deferred portfolio while for the With-Profit Pensioner 3.5 percent was declared. Although the fund had made a strong declaration of 19 percent last year, BPOPF Acting CEO, said this declaration was as much exciting as the fund has been able to achieve its targeted growth of a minimum of 80 percent of inflation.
“It is quite important for members to note that it is in the nature of markets to fluctuate over time, hence they should expect a fluctuation in the growth of the fund,” Moakofhi said.
Maokofhi highlighted that the fund’s active member portfolio declarations had shown growth overtime since inception, saying the only time it was hard hit was in 2003 during the dot.com crisis recording a low of -14.75 percent and in 2009 during the credit crunch when -14.00 was recorded. “Other than that the overall interest growth has been phenomenal,” he said.
She said assets under the fund’s management are currently standing at P45.1 billion, whose growth she attributed to membership base increase. Majority of these new members, according to Moakofhi, are public servants who were previously classified as industrial workers.
Previously only civil servants who were classified as permanent and pensionable were the ones who had the option to join a pension fund but it only became a thing of the past in 2011 when government pension arrangement changed.