Botswana Investment Fund Management (Bifm)’s funds under its control bulged to P 11 billion to September this year, as it is supported by technology and media shares across Europe and hedge funds investments.
The company, which is the largest fund management company in the country, said it is aggressively looking into the offshore market, and quite recently the financial boutiques such as hedge funds and other alternative investments in a bid to increase its shareholders’ value.
Tucker Scott of Templeton, which is one of long standing Bifm offshore management companies, said returns were helped by investments in technology, media, health and telecommunications.
Some of the stocks in which they have invested Bifm funds include Microsoft, Sky television, T&T and companies in health sector in general.
Further, he pointed out that they have not lost sight of the base metal sector, which has been in a rally throughout the year.
“On the commodities side, there is kind of a new high in the base metal sector and we have both factors which are needed being the supply and demand.
“Indications are that the markets for base metals and energy will be high in 2006,” he said.
Templeton, which operates in the non-traditional financial markets, is tapping into billion of pula, which are invested by the likes of Bifm on behalf of the country’s pension industry.
According to regulations, local fund managers can invest up to 70 percent of their portfolio in the offshore market as part of the moves to duck out of the local market fraught with limited investment opportunities and an illiquid stock exchange.
Of late, Bifm has entered one of the most sophisticated arenas being the hedge fund through the assistance of a financial service boutique, OctaneÔÇöthe Switzerland and Luxemburg based company. And under the agreement, they can invest anything from five to 15 percent of their money but have decided to be shrewdly conservative.
The move is aimed at having absolute returns, strategic investments and has access to a number of specialized managers, which you would not ordinarily get.
“We have invested some of Bifm money in India and South African markets,” James Canales of Octane said.
Speaking at the same event, Keith Jefferis praised the “crawling peg” and exits from local business as having contributed to growth of the fund.
“The recent micro economic policy of a crawling peg has made offshore investment more attractive.
Our offshore managers have taken a tactical strategy where they have invested in some non traditional markets,” he said.
He said the fund ballooned by 30 percent to P 11 billion over the year as at the end of September, which was partly aided by some of the businesses they exited. Bifm’s private equity fund sold its shareholding in Mascom and other operations to Turnstar Holdings to try to get its returns.
“We are looking at a number of interests because we are dealing with individual futures which, if not properly handled, can have serious consequences,” Chief Executive Officer of Bifm, Victor Senye said, adding that there is a greater need to educate trustees on issues of investment and what is expected from them.
“Their responsibility to set the tone and long term strategy rests with trustees,” he said pointing out that the country is endowed with a lot of cash but there are few investment opportunities.
And its partners shared their investment policies with trustees of pension funds with a view of enhancing their education in investment strategies.