Bigwigs lose big in Fleming takeover deal
Brian Benza | Tuesday March 21, 2017 18:00
Mmegi Business has learnt that the shareholders of fund manager, Fleming Asset Management have reportedly accepted a P20 million bid for the company, which is a fifth of an offer price they declined just over year ago before the firm ran into trouble.
Hamstrung by the loss of a P4 billion mandate with Botswana Public Officers Pension Fund (BPOPF) in July last year, Fleming has been knocked down from being one of the oldest and largest asset management companies in the country, losing other key clients and staff in the past eight months.
Mmegi Business gathered this week that Capital Management Africa (CMA) has tabled a P20 million offer with a view of rebuilding Fleming to eventually offer asset management services to its other subsidiary, Bona Life.
“Evaluation of a fund manager is usually a multiple of its Assets Under Management (AUM) and since many more clients have cut ties with Fleming after BPOPF, the price for the company has come down significantly to about P20 million from P100 million a year ago,” said a source in the industry.
According to a filing with the Competition Authority, Fleming is equally owned by 21st Holdings through Robert Fleming Botswana Holdings (RFH) and Starfish Private Limited.
21st Century Holdings is owned by some of the biggest businessmen in Botswana including Charles Tibone, Lawrence Lekalake, Samuel Mpuchani and Maclean Letshwiti.
Starfish, on the other hand is owned by Time Projects and PrimeTime director, Alexander Kelly and former chief executive officer (CEO) of Fleming, Peter Van-Riet among others.
Fleming chairman, Tibone yesterday declined an interview request on the CMA deal from Mmegi Business saying he was in an all day board meeting.
Among some of the businesses that 21st Century owns include Lesedi Motors, Smart Partnership (property development) and Bank Gaborone through Capricorn Holdings.
Since BPOPF’s termination of the P4 billion worth of mandates in July last year, Fleming has reportedly lost mandates from four other pension funds.
In the past eight months, the company has also lost key personnel with competitors such as Bifm, African Alliance and Afena Capital recruiting all of Fleming’s portfolio managers.
Fleming’s Chief Investment Officer also left the company recently.
“In its current state, it would be difficult for Fleming to compete in the market. We understand CMA is taking a medium to long term investment position with a target of rebuilding the company and use it as an asset manager for Bona Life which is the same structure at BIHL with Bifm managing Botswana Life’s assets,” another industry source said.
CMA is an investment company wholly owned by South African Timothy Marsland. Its largest subsidiary, Capital Management Botswana (CMB) has been a beneficiary of the BPOPF tenders with the company managing over P800 million in private equity for the pension fund.
BPOPF CEO, Boitumelo Molefe yesterday said the deal between Fleming and CMA is not part of their private equity arrangement.
“CMA are doing it in their own personal capacity. We are not financing the deal,” she told Mmegi Business.
Molefe recently told Mmegi Business that they had awarded another P380 million in private equity mandates to CMB taking their total mandate to P880 million.
“They have very little dry powder with a lot of projects in the pipeline. Some of the companies they have invested in include Bona Life, Wilderness Safaris and another company operating in Mozambique,” Molefe told Mmegi Business in December 2016.
Under a new investment strategy, BPOPF introduced private equity and infrastructure funds locally three years ago. In September 2014, the fund launched a P800 million local private equity fund, P500 million of which was awarded to CMB with the remainder tendered out.
But Molefe now says that the second tranche of P300m tender was never awarded after none of the applicants met their requirements.
The BPOPF has P55 billion in assets under management with 58% of the funds invested offshore.