Saturday, January 23, 2021

Botswana private equity firm hits Windhoek with quarter million fund

Botswana’s trailblazer in private equity industryÔÇöVPB –is making its dream of being a market leader outside South Africa a reality by launching a fund in Namibia in the next couple of months as it tries to leverage on the pull of multi-billion contractual savings in that market.

In two months, the private equity firm that has already made its mark in Botswana will launch an N $ 250 million fund that will invest across several sectors that make the Namibian economy.

“This is an opportunity for Botswana indigenous companies,” Anthony Siwawa, VPB founder and Managing Director told Sunday Standard this week.

“What we have been saying to promoters is that the region offers a larger opportunity,” he said, adding that they can dominate in the region in risk capital financing.

“We have taken lenders and exposed them to other countries. It is a good growth opportunity and not only for our people, but business also.”

The first tranche of the fund will be the $N 160 million from the allocation VPB got from Government Institution Pension Fund (GIPF) of Namibia while the remainder will come from other institutional investors that Siwawa is talking to.

He said they are in discussions with other sponsors in the Namibian market, including pension funds, local authorities amongst others to add on top of the $N 160 million from GIPF.

GIPF is an equivalent of Botswana Public Officers Pension Fund (BPOPF).

Siwawa explained that the fund will invest in education, commodities, transportation, value adding industries and health care amongst others.

“I think that is a start: when we started here (Botswana), it was our primary focus,” stated Siwawa, adding that VPB is not saying it can gain extra ordinary gains, but rather saying “we will meet the market constantly”.

VPB is targeting the SADC countries, including Botswana (where it was managing the P200 million CEDA Venture Capital Fund), Namibia, Mozambique, Angola, Zambia and rand zone countries of Lesotho and Swaziland.

Siwawa said they go where they think his outfit could make a greater impact and that explains why South Africa is not targeted because of the availability of risk capital in that market.

He said South Africa is not their focus as an area of opportunity, adding that if they focus outside the giant economy, it will be easier to penetrate it. “What we want is for our (risk) capital to have an impact,” he observed.

Two years ago, South Africa was said to be sitting on R60 billion of risk capital while for Botswana it was less than that.

The move to have a fund in Namibia follows VPB’s winning of GIPF allocation after a tender while the full fund will be done in stages and Siwawa said the whole idea is to build a bigger fund building on the government bid.

VPB has worked with the Bank of Namibia where they have had two seminars that discussed, amongst others, the asset class. Equally, Siwawa’s outfit has been engaging GIPF for two and half years and where the Namibian counterparts have been watching what has been happening in Botswana.

Namibia is said to have N$ 60 billion of contractual savings of which private equity outfits like VPB is looking to leverage on that.

Meanwhile, Siwawa revealed that he was happy with the reception he is getting from the SADC market, stating that the economies understand that the resource (risk capital) that VPB has is what their economies need.

“We play in a niche market as a private equity where the rest of the continent is in need of risk capital,” he stated, adding that in Botswana 30 percent of that capital sits on Bank of Botswana Certificates (BoBCs) which he said is not working.

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