The Government Institutions Pension Fund (GIPF) is planning to invest N$7.2 billion locally to achieve the 45 percent domestic asset requirement as mandated by the Namibia Financial Institutions Supervisory Authority’s (NAMFISA) regulation 13.
GIPF Chief Executive Officer, David Nuyoma said the funds will mainly be aimed at infrastructure projects.
“The planned investment will predominantly be channeled into infrastructure projects that are of economic value. The GIPF believes that this investment will significantly contribute to the economic development in terms of tangible physical structures, private equity and the creation of jobs,” he told the Windhoek Observer.
The planned investment by the country’s biggest pension fund, comes amid talk that they are no local attractive value assets to invest in.
“This is a concern that we are fully aware of and have been proactively engaging market participants on this matter. The Fund is a significant investor in Namibia and has up to date invested the value of N$44.67 billion as of 28 February 2019,” he said, adding N$5,5 billion had been invested in unlisted investments.
“The alternative investments commitment as at end of February 2019 was N$5.5 billion and of this we have disbursed N$3.8 billion”
Quizzed on the preferred sectors for the fund, Nuyoma said, “The Fund does not have an overarching preference for a specific sector, however we aim to investment in return-seeking assets across all asset classes. Take note we are long-term investors and we also try to ensure that all investment meet global ESG (Environmental, Social and Governance) standards.
On the listed investments, he said the fund had given discretionary mandates to its asset managers and thus they take all the invest decision when it comes to funds allocated to them by the GIPF.
“Listed Mandates have been allocated on a Discretionary basis meaning that the Asset Manager (who is a duly appointed service provider) has the discretion to invest in stocks that meet and are within the parameters of the mandate that has been allocated to them. For instance, an asset manager with a South African Listed Equity Mandate may only invest in stocks listed on a registered stock exchange in South Africa, that being the JSE. The investment decision taken by the manager is informed by their investment philosophy and process.
The asset manager also generally have a house-view on stocks that they have researched and are in favor of gaining exposure to. Another element within the mandate that guides the asset manager is their tracking error which allows them to take certain positions in such portfolios and is also used as a risk management tool by the asset managers.”
He said the fund still had a keen interest in investing in MTC, but the decision will be driven by its asset managers, when it does list as envisaged.
“The GIPF as the largest pool of assets in Namibia and an investor on the local bourse encourages the listing of entities that have the same developmental objectives as that of the GIPF. The listing of MTC would be considered on the same basis and criteria of any investment, as applied by our asset managers and should we find merits in investing there, we shall invest through our asset managers,” Nuyoma said.
He said the GIPF was successfully growing the fund and as of 28 February 2019, the market value of the fund was N$115 billion.
“The Fund has been able to generate consistent long-term performs due to our philosophy of Liability-Driven Investing “LDI” which allows the GIPF to invest in return-seeking assets whilst ensuring that these investments are adequate to cover our liabilities. LDI consists of developing an ALM “Asset Liability Model” which then defines the SAA “Strategic Asset Allocation” which is basically the blue-print for our investments over a certain period of time. The ALM is conducted every 12-18 months and considers both micro and macro-economic variables that may impact our investments over that period,” Nuyoma said.