Four asset managers have secured the mandate to manage the Social Security Commission’s (SSC) N$2.5 billion external portfolio, effective January 2018.
The four, Allan Gary Namibia, Investec Asset Management, Prudential Investment Managers and Namibia Asset Management will be expected to give a return of at least NCPI plus three percent on the funds allocated.
“Each agreement will have set benchmarks on what is expected and in terms of allocation, it will not be equal, but equitable,” SSC Executive Officer, Milka Mungunda said.
“The SSC remains confident that the appointed asset managers will deliver on the Investment Policy Standards and Board expectations of preventing capital loss and to earn returns in excess of the agreed benchmarks.”
According to the SSC, 20 companies had applied for the mandate, with the bulk falling by the wayside during the screening process.
South African consultant, Selekane Asset Consultants, was roped in to assist with the selection process.
“The process to appoint the independent investment managers was a vigorous evaluation process. The entire process of adjudication and evaluation was handled by the Investment Committee, with the assistance of independent investment consultant, Selekane Asset Consultants,” Mungunda said.
She said the decision to pursue external investments, which had the node of the line ministry, comes amid concerns over returns the Commission was getting on its investments.
“The asset manager’s performance was below the benchmarks set and thus the board was concerned with the viability of the fund,” the SSC Executive Officer said.
“It’s the first-time in the history of the SSC; our funds will be invested offshore, increasing returns of the funds.”
Previously the SSC funds were managed by Allan Gray, Investec, Old Mutual Asset Managers and Stanlib.
Quizzed if the investment will be going against the Ministry of Finance regulations, which require that pension funds and asset managers reduce the amount of funds invested abroad, the SSC said its investment policy, already approved by its line ministry, was in line with the Government regulations.
“The investment is in line with the SSC investment policy, which is in line with the Ministry of Finance regulations.”
The SSC has assets worth N$3.5 billion.