The Botswana Public Officers Pension Fund (BPOPF) has identified five managers who will take its portfolio into China and Hong Kong.
With assets of more than P60 billion, the pension fund has made no secret of its desire to crack the Chinese financial market, which has generally been closed off to outsiders.
This week, BPOPF CEO, Boitumelo Molefe said the five managers would handle the pension fund’s push to invest in Asia.
Previously, she told BusinessWeek that China in particular offered a lucrative unique market despite the limits to external investors. She also said the Chinese market had abundant opportunities waiting to be explored.
“We expect that it will be more open to foreigners in the next five years and as an institutional investor, it’s good to go in sooner, rather than later,” Molefe said. The CEO further told BusinessWeek on Tuesday that the BPOPF would appoint local listed equity and fixed income managers whose mandates take effect next month.
Late last year, the pension fund launched a fresh P1 billion private equity drive which saw it entering into partnership agreement with two fund managers each handed a P500 million purse for the local private equity market.
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Under the incubation initiative, the BPOPF expects its P1 billion back after 10 years, with returns. Molefe said local investment had enjoyed a positive performance last year, with growth rates of between 2.4 percent and one percent. In 2018, the active members and deferred pensioner portfolio enjoyed 2.4 percent returns, while the profit pensioner portfolio was at one percent. The pre-retirement switch had zero percent return.
“Active members and deferred pensioners portfolio had higher performance because their investment strategy is more aggressive and invests in riskier assets such as equities which tend to do well in the long term,” Molefe said.
“The pensioner portfolios by their nature are conservative both in risk and return. The pre-retirement switch portfolio is conservative and benefits from structural factors such as the local banking sector’s liquidity status,” she added.