Sunday, April 18, 2021

Local Asset management firms eyes BPOPF’s P1.5 billion

The country’s multibillion Pula pension fund, Botswana Public Officers Pension Fund (BPOPF) says it is currently at the legal due diligence stage of the procurement process that will see new start-ups enrolling under its incubation program.

Most local asset management firms are eyeing BPOPF’s P1.5billion which will be availed through the incubation program.

In an interview with Sunday Standard, BPOPF acting Chief Executive Officer (CEO) Moemedi Malindah said they  have shortlisted 6 Botswana companies for technical due diligence as well as  three companies for legal due diligence.

“It has been the Board of Trustees desire to continuously improve and enhance the citizen economic empowerment and the focus last year was the incubation drive,” said Malindah.

Malindah stated that the process started with the expression of interest to identify companies and prospective bidders. He said they then invited those bidders who met minimum requirements stipulated in the EOI to a request for information stage, which was followed by request for proposal. He added that the bidders who passed the RFP stage were then invited for oral presentation.

Malindah observed that the risk of the business being a success can be a headache, adding that many businesses lose focus on the core business you have appointed them for, when they are pressured to have a successful business running.

“You do not want to find that your investment professionals who should be focused in investing are removed from the process and focusing on business development to ensure their business can pay rent and staff,” he said.

He is of the view that the risk is not really general but specific, and he gave an example that one can get a spinoff of management setting up business with operations similar to where they come from and the operational risk of the new company being similar to that of the established company. He added that one can also set up a company with better controls and hence lower operational risk as an established company as much as one can have a new entity with very weak processes hence being riskier than the established company.

“We are happy with our lineup of managers. We are currently reviewing managers to ensure we have an optimal mix of managers,” he stated.

Malindah said that though they have timelines, they caution against announcing timelines where legal due diligence process is ongoing. He added that it involves a lot of negotiation between the parties and it can take time.

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