CMB clinches BPOPF P500m tender
Brian Benza | Friday November 21, 2014 14:28
The kitty is the first tranche of BPOPF’s trend-setting P800 million private equity funds solely targeted for investments in Botswana only.
BPOPF marketing and communications manager Devilliers Nage confirmed that the tender has been awarded to Capital Management.
“The BPOPF has awarded a tender to Capital Management Botswana (CMB).
“CMB’s mandate is private equity investment in Botswana.
“Other details are contractual matters and cannot be disclosed to third parties,” said Nage.
Given the size of the fund, clinching the tender translates into money-spinning management fees, which are normally charged as a percentage of the fund.
CMB beat two other asset managers, VPB Botswana and African alliance that were shortlisted for the lucrative tender.
“ Yes, the tender has been awarded to us but I can’t give more details as a joint statement with BPOPF will be released soon.
“CMB has established a private equity fund worth over P2 billion from different investors where we are investing in Botswana companies only, ” CMB principal Rhys Carr told BusinessWeek. Speaking at a media briefing in Gaborone recently, BPOPF acting CEO Lesedi Moakofhi said 13 asset managers had passed the first stage of the tendering process but only three firms, Capital management Botswana (CMB), 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. A tender for the remaining P300 million is now out and we hope to also award that one before the end of the year.”
CMB was formed out of Bifm Capital two years ago when its promoters Timothy Marsland and Carr parted ways with former partners, BIHL.
Regarded as old hands in the asset management business, Marsland and Carr have previously managed an P890 million kitty from Botswana life annuity fund.
At Bifm Capital they were mandated with finding quality Pula denominated assets matching BIHL long-term liabilities to pensioners.
Among the assets that Bifm Capital had invested in before the dissolution of the BIHL subsidiary included P150 million in Botswana Building Society (BBS) as well as P250 million promissory notes in Pan African focused financial house, ABC Holdings.
The company has also invested in Choppies and CA Sales.
In a bid to promote investment of pension 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 also 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.
BPOPF recently declared a 12.25 percent interest rate for its members for the 2014 financial year down from 19 percent last year largely due to market fluctuations.
The declared weaker interest is however still the second highest paid to its membership, which now stand at 152,000, since the 2007 peak of 33 percent.
The Fund’s assets have ballooned to P45.1 billion in 2014 from just P1.9 billion in 2002 while its membership has equally grown significantly to 152,000 from 22,000 in the same period.
BPOPF assets are largely invested in equities, currencies, securities, hedge funds and others, although alternative investment paths are already being formulated.