The asset management industry is jittery following leaked reports that a South African asset consultancy firm, Novare has made a proposal to Botswana Public Officers Pension Fund to be allowed exclusive management of up to 70% of Botswana Public Officers Pension Fund. Novare currently offers investment advisory services to BPOPF which has over P40 billion in assets managed by a number of fund managers. Novare proposal comes at a critical time when tenders are out for appointment or renewal of fund managers. As a result BPOPF Board of Trustees has opted to seek legal advice on how Novare’s proposal will impact on the current contract with BPOPF,Sunday Standard can confirm.
Questions abound on the real motives of Novare, a South African asset and actuaries consultant firm with close links to ANC heavy weights ÔÇô Tito Mboweni and Tokyo Sexwale. This comes in the wake of yet another leaked draft report by Novare to BPOPF which has sullied relations between BPOPF on one hand and asset managers on the other after Novare questioned ethical propriety of Botswana’s only two asset management firms; Bifm and Flemings. BPOPF has since distanced itself from the Report, saying it was only a draft and has since been significantly changed. When contacted this week, about Novare mandating shifting to management, BPOPF denied such a possibility.
“It is not true that the BPOPF has received any advice from Novare for them to be given 70% of the Fund’s money to invest. Novare’s contract with the BPOPF does not include investment management. As an Asset Consultancy firm, Novare has been contracted to provide investment advisory services which include asset manager research, whereby they assist in the recruitment of asset managers that the Fund can use to execute its investment strategy,” said Acting BPOPF Acting General Manager Devilliers Nage. Meanwhile information has surfaced on who the real promoters behind Novare. In addition to a few institutional investors and Black economic Empowerment institutions in South Africa, Novare is by Sexwale and Mboweni. One of the richest South Africans, Sexwale is a former minister and former Premier of the Gauteng Province. Mboweni is a former minister and former Governor of the South African Reserve Bank. He is often mentioned as a front runner to become Finance Minister of that country after General Elections due in a few days’ time.
In Botswana Novare is nominally owned by Olebeng Ngwakwena , a property valuer turned asset consultant with close links to the ruling Botswana Democratic Party. Industry insiders say Ngwakwena is not much more than a country manager holding fort for powerful local interests that sprawl the civil service and the Bank of Botswana. Ngwakwena has declined to be interviewed on the subject, saying it is a matter for BPOPF. Incidentally Novare is not the first known party to have asked to be given a chunk of BPOPF money for such exclusive management. A few years ago, the Bank of Botswana made a similar proposal to the Ministry of Finance. BPOPF Trustees at the instance of the then executive management rejected the Central Bank’s unsolicited offer. Down the line the then BPOPF Chief Executive Officer, Ephraim Letebele was sacked under circumstances that he is still challenging before the courts.
Observers say he refused to toe the line and insisted on the narrative that BPOPF was not government money and should remain detached from government management including from officials who wanted to put their hands at the till. After Letebele’s departure a new Board of Trustees more amenable to government was also appointed in the position of a more independent one that had comprised mainly of retired public officers and private sector businessmen. Curiously a few years ago the government of Botswana, through the Registrar of Pensions and Provident Funds appointed another South African firm, Jacques Malan Consultants and Actuaries who ended up effectively recommending the sacking of then BPOPF investment advisors, Alexander Forbes. “The relationship between the Fund [BPOPF] and Alexander Forbes Botswana is very unhealthy and defeats all the known norms of good governance.
When a service provider and his client are so close it can lead to poor service and there could also be collaboration in conducting matters of an illegal nature. Jacques Malan Consultants and Actuaries are not stating that such illegal matter took place; all it is saying is that should they take place, it would be very difficult to uncover,” said the consulting firm. Shortly thereafter Alexander Forbes lost their job with BPOPF and were replaced by Novare. Novare first came into the picture in 2007 after the Permanent Secretary to the President, Eric Morale commissioned an investigation into the operations of BPOPF.
