The Government Institutions Pension Fund (GIPF) has so far disbursed N$4,7 billion out of the N$12 billion it has committed to asset managers of unlisted investments in the country.
GIPF now has assets worth N$104 billion, according to latest figures released this week.
CEO, David Nuyoma, said in an interview that the fund has already signed agreements with 25 managers, and that the money will only be disbursed to them once they find viable investment opportunities.
The investment managers include First Capital, Safland, IJG Namibia, Old Mutual, Eos Capital, the South Suez Africa Fund and many others.
“We have contractual agreements with individual fund managers. It is a process. Early this year, we signed up with seven additional managers for N$2 billion. It takes time for them to find viable assets in which to invest. Some of the projects take two years just to investigate the viability.”
If the projects are viable, the managers are then allowed to invest the money.
“We will wait for them to bring their drawdown to us. In terms of the Namfisa regulation, there is a requirement to do these investments within 24 months. So within those 24 months, they have to try and find good projects. If there is a good reason why they should not invest, then they have to seek for an extension.”
GIPF has a benchmark to ensure that the yields on these investments are in line with pension benefits.
Nuyoma said the yields must be ‘inflation plus’ because GIPF wants its liabilities to beat inflation so that the fund is able to make inflation adjustments to its pay-outs.
Finance Minister, Calle Schlettwein, disclosed last month that changes to regulations on domestic asset requirements to lift the domestic asset thresholds from 35 to 45 percent overtime are now with the legal drafters and are expected to be gazetted soon.
The threshold will be raised to 40 percent by January 2018, 42.5 percent by April 2018 and 45 percent by October 2018.
Nuyoma said GIPF will not be affected by this as 49 percent of its investments are already in Namibia.
“‘We are well above that benchmark. We are now at 49 percent.”
Asset managers of pension funds will also now be required to reduce their primary listing of assets in South Africa.
“What has happened now is that the Minister of Finance has asked stakeholders to reduce their primary listing. What this means is that we have to reduce it to a minimal level. Currently it should be around 15 percent; it will come to 10 percent and then five percent. So we have to work gradually. The impact is that it will bring more money into the Namibian economy.”
Nuyoma said GIPF has already started moving dual listed assets from South Africa.
“For example, when we bought shares in the Capricorn Group. We brought money from South Africa to buy Namibian assets. We are pre-emptively looking at assets. If we find a good one, we will buy it.”