Namibia Stock Exchange-listed private equity firm, Stimulus Investments, is considering establishing a new venture capital fund, which will likely have a different mandate.
This comes as Stimulus’ existing funding lifespan is expected to come to an end in 2021.
Pointbreak Group Chief Executive Officer, Josephat Mwatotele, confirmed in an interview with the Windhoek Observer this week that a second fund was under consideration, but cautioned that the process has not been formalised yet.
Pointbreak is responsible for the management of Stimulus.
“Yes, we did mention that we are considering a second fund. It is still a consideration and we have not formalised that process yet,” Mwatotele said. “The rationale behind a second fund is to see if we can create a fund with a different mandate from the current one.”
The Pointbreak executive said a new fund will give them the flexibility to pursue new opportunities.
“There are several considerations such as the Energy Fund. I am not saying that we are going to look into the Energy Fund, but a fund which will have a different mandate would be appropriate and should be flexible to pursue different investment opportunities.
“Nothing has been approved yet and nothing has been submitted. We are basically telling our investors that we are considering a new strategic alternative though we have not pursued anything yet in that regard,” Mwatotele said.
He said the proposed new fund would afford Stimulus the opportunity to diversify its risk.
“We want to create a new fund that should be risk dynamic, with a different risk appetite, a different risk profile and risk mandate altogether.”
In 2004, Pointbreak together with a number of black business professionals established Stimulus with preference shares in the company listed on the Namibian Stock Exchange.
Stimulus raised N$123,68m from Namibian institutions and individuals.
During November 2011, Stimulus redeemed the original preference shares and issued a new round of 10-year preference shares, totalling N$250m.
In the process, the lifespan of the Stimulus’ funding arrangement was extended to 2021 and Stimulus gained approximately N$100m in new capital to invest.
Mwatotele said a new fund would auger well with their new partners FNB Namibia, who recently acquired a 49 percent stake in Pointbreak and offered a larger capital pool for potential investment in the country and outside of Namibia.
He said from experience with limited capital to invest, they had faced several limitations and with FNB onboard, through its asset management subsidiary, Ashburton Asset Management, their horizons were now broader and it was just a matter of time before they start exploring new opportunities.
“For us to be part of a bigger group and have access to a bigger capital pool from FNB was the major attraction, but certainly there are several opportunities of being part of this bigger group and we will be able to offer a bigger product portfolio to our clients.
“As a small company, we have always been constrained and our expansion capabilities were limited by the size and capital availability. With FNB we can now gain international exposure through Ashburton Asset Management.”
Stimulus is currently invested in prominent Namibian companies such as Cymot, Plastic Packaging, Namibia Media Holdings, Walvis bay Stevedoring, Joe’s Beerhouse Properties, Nashua and Neo Paints.
During the financial year ended 28 February 2017, Stimulus had total assets under management of N$503 million, up from N$382 million last year.