BPOPF sees fund growing to P90bn

Brian Benza | Friday December 9, 2016 15:05

The Fund’s AUM currently stands at P55.5 billion having grown 7.5% from P51.7 billion in 2015. Under a new five-year strategy to kick in next year, CEO Boitumelo Molefe says the fund will look to alternative asset classes to sustain growth as the traditional stock and bonds markets slow on sluggish domestic and global economic growth. According to Molefe, the Fund, which has 58% of its portfolio invested offshore, will seek growth opportunities from the alternative markets as the local stock market is attracting negative returns while the global investment market has been affected by slowing economic growth, no inflationary pressures and low interest rates.

“Going forward we will look to invest more in private equity as well as other asset classes such as infrastructure to diversify our portfolio in the face of low growth in the stock and bonds markets,” she said.  The Fund has also fully invested its property allocation where P1.5 billion has been invested in the local property market through its asset manager, Messidor.

Under the property portfolio, the Fund recently announced it had invested P300 million to build the Hilton Garden Inn Hotel at the CBD. BPOPF has also boosted its property portfolio after it bought two Francistown properties from PrimeTime for P71 million.

According to Molefe, the BPOPF has also appointed a German company, Monrovia Capital as its new private equity fund manager, effective January 2017.

BPOPF is Botswana’s largest pension fund with over 150,000 members. In Botswana, Molefe said the fund would feel pressure on its returns from investments on the Botswana Stock Exchange (BSE), which has traded southwards since the beginning of the year.

 The BSE as measured by the benchmark, Domestic Companies Index (DCI), has weakened by 9.5% on a year-to-date basis in 2016.

 The Fund has P23.1 billion worth of assets invested in Botswana, the bulk of which, according to Molefe, is invested on the local stock market.

 While the Fund grew to P55 billion, total returns for its active and deferred members fell to 4.25% from 13.73% in the previous year due to the volatility in both the domestic and global markets.

   Under the five-year strategy, the BPOPF will not only focus on investment growth but will also look to trim costs per member from the current P58 per member to P40, while also focusing on improving staff performance and improving risk control.