Consortium snaps up 30% stake in African Alliance

Brian Benza
Staff Writer | Friday June 24, 2011 00:00

 

A consortium of citizen investors headed by former Permanent Secretary at the Ministry of Finance, Serwalo Tumelo, has acquired a 30 percent stake in diversified financial house African Alliance Botswana (AAB).

The company, which is one of the first firms to be certified as an international financial service outfit by Botswana IFSC, was set up in Botswana 14 years ago as a joint venture at the invitation of a citizen empowerment group headed by the late Louis Nchindo. However, Nchindo disposed of his 18 percent stake in the company back to the group in 2008.

In an interview with Mmegi this week, Tumelo - who is the chairperson of AAB - said the consortium comprised himself, Morago Ngidi, Tally Tshekiso and current CEO Don Gaetsaloe. Ngidi is the immediate past chairperson of BEDIA while Tshekiso is a local businessman and former co-owner of textile firm Caratex Botswana.

The acquisition, which is worth P10 million and excludes a recently established stockbroking business, takes the citizen shareholding in the business to 33 percent with the rest owned by the South African-based de Castro family.

Before the latest acquisition, Joe Matome was the only citizen shareholder in the company that has about P1.4 billon in assets under management, holding a 3 percent stake. Said Tumelo: 'We have a vision to grow this business to greater heights.  That can be seen by the confidence we have expressed by investing our own funds, as citizens, into the company.

'Going forward, the strategy is to try and work with the government as well as the private sector so that we can help add value to their investments. Our ultimate aim is to bring together those that have resources to invest and those in need of funds, no matter how small or big the transaction maybe.

There is a lot of money lying around, for example, in pensions funds, while there is a huge appetite for funds in councils, the private sector and government for development projects.

'This is one area we are going to actively pursue and will utilise some of the pension funds that are being invested outside the country.  In the medium to long-term, our plan is to come up with a fully-fledged investment bank as we are already offering most of the products and services that such a bank provides. We should be approaching the authorities soon for the banking licence.'

In a bid to further broaden its shareholder base and empower Batswana, the company plans to increase the 33 percent citizen stake in AAB to 40 percent before the end of the year, CEO Gaetsaloe added. 'By the end of the year, we are planning on buying a further seven percent stake which will be reserved exclusively for our staff members and not directors,' he said.

Gaetsaloe also expressed confidence in a brighter future for the business, despite increasing competition in the industry as well as the tight regulatory environment. 'The future looks promising from all fronts of the business,' he said. 'Following the successful listing of Letlole La Rona, we are currently engaging several key institutions on advisory services and we expect that we will see growth in this space of the market over the next year.

'Having pioneered private equity in Botswana, we are very proud and excited by the recent launch of the Botswana Public Officers' Pension Fund's Alternative Asset Strategy, which will add further impetus to private equity investments within Botswana.'  African Alliance currently offers asset management, corporate advisory, private equity and third party administration services in Botswana. It was one of the leading companies to manage the Botswana public officers funds until it lost the account in 2007.  The African Alliance group, which now owns a 67 percent stake in AAB and 100 percent of the securities business, is an investment banking group operating in 23 countries across Africa.

Since 1992, African Alliance has built substantial infrastructure in terms of offices and professional teams throughout the continent to meet the investment banking needs of its clients.

These include national governments, municipalities, parastatals, pension funds and large to medium-sized public and private companies.