Anxiety over BPOPF P500m tender
Brian Benza | Friday September 12, 2014 14:18
The kitty is the first tranche of BPOPF’s trend setting P800 million private equity funds solely targeted for investments in Botswana only.
Speaking at a media briefing in Gaborone this week, BPOPF acting CEO Lesedi Moakofhi said that a decision has been made on which fund manager has won the tender.
Thirteen asset managers had passed the first stage of the tendering process but only three firms, Capital management Africa (CMA), African Alliance and VPB made it to the last stage of shortlisting.
“A decision has been made on which of the three firms won the tender, but we are not ready to announce yet as finer details are still being ironed out,” she said, adding that, “We should be in a position to make an announcement soon. A tender for the remaining P300 million is now out and we hope to also award that one before the end of the year”.
On Wednesday, most industry players interviewed by BusinessWeek were either in the dark or tight-lipped about which company had won the tender.
Led by Kabelo Ebineng, CMA was formed out of Bifm
Capital two years ago when its promoters Timothy Marsland and Rhys Carr parted ways with former partners, BIHL.
African Alliance is one of the country’s top asset managers in which a consortium of citizen investors headed by former Permanent Secretary at the Ministry of Finance, Serwalo Tumelo, and two years acquired a 30 percent stake in two years ago.
Local private equity entrepreneur, Anthony Siwawa, who previously managed the P200 million Ceda Venture Capital Fund, leads VPB.
Given the size of the fund, clinching the tender would translate into money-spinning management fees, which are normally charged as a percentage of the fund, for the fund manager that emerges the winner.
In a bid to promote investment of pensions funds locally, BPOPF has under a new investment strategy pioneered private equity and infrastructure investments products.
“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 is great quality opportunities in the unlisted space that require a private equity partner to unlock,” said Moakofhi.
BPOPF is currently establishing an infrastructure fund, which will primarily finance government-backed projects through bond issuance.
By law, local fund managers are allowed to invest up to 70 percent of their Botswana assets offshore. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) however, hopes to change the law to 70 percent domestic and 30 percent offshore by 2030.
The private equity fund comes hard on the heal of news that BPOPF, which is the largest pension fund outside of South Africa in Sub-Saharan Africa, has severed ties with two of its fund managers, reportedly over management fees disagreements.
BPOPF declined to comment on its relationship with fund mangers citing contractually confidentiality obligation, but market sources said the affected firms were Coronation asset manager and Allan Gray. Due to the separation, Coronation is winding up its operation in Botswana.
“We can acknowledge that due to the loss of a client mandate, and after much deliberations Coronation Botswana has taken the difficult decision to discontinue the business operations as it was no longer viable to do so.
“All investments management agreements with our clients are concluded by mutual agreement and are confidential thus we are not in a position to disclose any client details,” Coronation MD Sean Rasebotsa told BusinessWeek.
Allay Gray declined to comment on the matter, suffice to say they have no plans to cease operations in Botswana.
“Given the duty of confidentiality we owe to our clients, we are precluded from commenting on the terms of our agreements with them.
“This year, Allan Gray Botswana celebrates its 10th year of highly successful operations in Botswana, and has no intent to curtail its operations here,” said Allan Gray MD Tapologo Motshubi.