Incubation programme to develop local talent *Two private equity managers to get outlay of P500 million each
Botswana Public Officer’s Pension Fund (BPOPF) is looking at the local market after realizing great potential in growing their portfolio and nurturing the local Small Micro and Medium Enterprise (SMME) industry.
Through the implementation of their incubation programme, BPOPF intends to invest P1 Billion in two local citizen owned private equity managers to ensure local economic growth and create a level playing ground for local companies that are dominated by foreign players.
Borne out of the realization that local talent gets overshadowed by these industry giants who stifle their growth and end up going belly-up, the incubation programme, whose policy was approved in November 2016, aims to diminish industry barriers for small start-up companies such as competition and lack of capital among others.
Speaking at a media briefing last week, BPOPF Chief Executive Officer (CEO) Boitumelo Molefe said by investing in local talent, pension funds have the capability to contribute to the development of local industry, employment creation, and economic diversification as well as participate in a meaningful contribution to the economy.
“Pension fund can provide seedling capital for start-up companies to build track records and get recognition by larger industry players for partnerships,” she said.
Molefe also said the fund is looking to counter balance its listed equity, bonds, and property against opportunities in the unlisted space that is constituted of private equity, infrastructure development, hedge funds as well as mezzanine funds.
She said BPOPF has realized the potential growth of 25-30% in the unlisted space.
“It is good to have a mix of uncorrelated listed and alternative bonds because when the listed report losses, the alternative options will register some profit,” she said.
The CEO also highlighted that BPOPF is not leaving the listed space after an overall negative growth record during the 2016 world equity market but rather looking to get a strong foothold on the alternative option to buff any losses.
She attributed last year’s negative growth in listed equity, bonds, and properties on the extremely low international interest rates and low inflation in the foreign stock markets that they have invested in, adding that the fund invests in foreign stock markets in order to grow its revenue.