Coronation, the titanic asset management company, urged trustees of pension funds to lock into the global markets in a bid to grow wealth for their members given that there are limited opportunities in the home ground.
Speaking at the Botswana Pension Society conference at GICC recently, Charles De Kock of Coronation said the current regime which stipulates that fund managers can invest up to 70 percent of funds offshore is a marvelous idea given the fact that there are a great number of assets available on an international market as compared to the local scene.
“In the off-shore market there is a great choice of both managers and assets outside the country,” he said, adding that “trustees can go for big brands (companies) which have a track record or passive managers.”
The move comes at a time when pension fund industry has grown to a hopping P 25 billion since the introduction of Botswana Public Officers Fund (BPOF), while the number of listed equities in the market has remained small.
The other major challenge facing the country involves the diversification of the economy away from the mineral sectorÔÇöespecially diamonds.
He said his Cape Town-based company, which has offices in London and other parts of Africa including Botswana, has got a unique investment philosophy aimed at earning its clients some good returns.
One of the key factors in its investment philosophy is to scout for small and little known companies with a potential of outperforming the big companies with a long-term investment objectives.
He said the philosophy is supported by fund of fund managers ÔÇô specialised services ÔÇô available in the international market that share the same views.
“With the fund of fund managers’ approach you can virtually find specialists, say, in small or medium size companies. There is a huge amount of potential out there and returns have been very good,” he added.
The Cape Town-born company has invested in an assortment of asset classes ranging from equities, bonds, hedge funds and other alternative investments such as private equities. It has notable investments in Botswana, South Africa, London, United States and Asia.
He pointed out that for the pension funds to tap on opportunities presented by the international markets, trustees needed to be educated so that they could take informed decision in the allocation of funds.
“You can get a lot of return from hedge funds but the trustees have to see the opportunity,” De Kock said.