GIPF rakes in N$741m from DCP investments
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20 September 2019
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The Government Institutions Pension Fund (GIPF) has revealed that it has realized over N$741 million in dividend from its three remaining investments made under the now defunct Development Capital Portfolio (DCP).

According to information made available, the GIPF has realized N$ 7,647,424 since its 1997 investment in Capricorn Investment Holdings and N$ 678,831,820 from its 1996 investment in FNB Namibia.

The GIPF’s investment in Etosha Fisheries has racked in N$ 54,773,657 since the investment was made 1996. This comes as the fund through the DCP invested through equity N$639 220 in Capricorn Investment Holdings, N$12 170 000 in FNB Namibia and N$27 500 000 in Etosha Fisheries.

“The returns on the counters have been positive. The multiples of total recovery were Capricorn Investment Holdings (11.95 times), FNB Namibia (55.78 times) and Etosha Fisheries (1.99 times),” GIPF Chief Executive Officer, David Nuyoma told the Windheok Observer.

Going forward Nuyoma said the fund will still retain its interest in the three companies and will only review its position depending on the market conditions.

“The GIPF is a long-term investor and it envisages to generate returns over and above the target rates. Should the market conditions of the Fund’s investment vehicles change, GIPF will re-assess its exposure. It is important to note that GIPF is a significant shareholder and is represented on the Boards of Directors on all the companies that it has invested in to ensure that the Fund’s interests are represented,” he said.

The fund, which is the country’s largest with assets valued at over N$120 billion as of April 2019, initially invested in 21 companies through the DCP between 1995 to 2005 and todate, it only retains the three investments.

Of the amounted invested through the DCP, N$22 million in loans to two companies was written off, only a year after it had been disbursed.

Quizzed on what measures the fund had implemented to avoid a repeat of what transpire with its investments made under the DCP, Nuyoma said new governance structures have been introduced in the fund.

“NAMFISA introduced Regulation 14 (previously known as Regulation 29), which guides pension funds on what governance structures to adhere to, to ensure compliance. The advent of Regulation 14 follows GIPF’s initiatives as from 2008, where the fund implemented some of the key findings from numerous investigations carried out on the DCP. One key change was the introduction of the Bewind Trust structure that would form the legal vehicle in which GIPF would channel the funds for investment,” he said.

“Under the DCP, funds were channeled directly to the projects with very limited governance oversight. The new regime also requires the appointment of managers with suitable skills for the mandate applicable as well as ensuring that their interests are aligned to these investments yielding returns in the long term. AT attempt was also made to strengthen the governance arrangements of these vehicles”

The Development Capital Portfolio commenced in 1995 with the intent of providing development capital to Namibian businesses with growth potential, developmental impact and intended to promote economic growth, while developing the domestic industrial capacity. 

 

 

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