The Botswana Public Officers Pension Fund (BPOPF) has bought a 23.85% stake in Airport Junction Mall from Bifm to become the third largest shareholder in the shopping complex.
BPOPF chief executive officer, Boitumelo Molefe told Mmegi Business yesterday that the acquisition brings the value of their property portfolio to almost a billion pula. “Our strategic allocation for the property sector is at P1.4 billion. With this new deal, it means we still have another P500 million to spend on buying properties,” she said.
Bifm Shareholder and Eris Property Group, a multi-billion-property development company from South Africa, equally funded construction of the mall at a cost of P460 million in 2011.
After the completion of the mall, Eris and Bifm, which had used shareholder capital to invest in the project both diluted their ownership to just under 25% each with Bifm Client Portfolio (asset management) taking up a 51% stake.
With the purchase of the 23.85% stake by BPOPF, Bifm Client now has a 51% stake with Eris owning about 25%.
From its P55 billion assets under management, the BPOPF has 42% (P23 billion) invested in Botswana’s stocks, bonds and property through different asset managers.
Through its property investment manager, Messidor, BPOPF is currently invested in properties such as the P300 million Hilton Hotel project currently under construction at the new CBD, Blue Jacket square and Barclays Plaza in Francistown and a 17% stake in Botswana Stock Exchange (BSE)-listed Prime Time.
Under a new five-year strategy, which kicked in this year, Molefe says the fund will look to alternative asset classes to sustain growth as the traditional stock and bonds markets slow on sluggish domestic and global economic growth.
According to Molefe, the Fund, which has 58% of its portfolio invested offshore, will seek growth opportunities from the alternative markets as the local stock market is attracting negative returns while the global investment market has been affected by slowing economic growth, no inflationary pressures and low interest rates.
BPOPF is Botswana’s largest pension fund with over 150,000 members. In Botswana, Molefe said the Fund would feel pressure on its returns from investments on the BSE, which has traded southwards since the beginning of the year. The BSE as measured by the benchmark, Domestic Companies Index (DCI), has weakened by 4.78% on a year-to-date basis in 2017. The Fund has P23.1 billion worth of assets invested in Botswana, the bulk of which, according to Molefe, is invested on the local stock market.
Last week, the BPOPF announced that it will provide P1.5 billion in seed capital to three wholly citizen owned start-up fund managers in a bid to facilitate the involvement of more Batswana into the lucrative investment management business. Under its incubation programme, mooted last year, the BPOPF has identified three greenfield companies to be financed from its P55 billion kitty with two involved in private equity while the other will trade in the listed equity space.
The awarding of mandates to two new private equity managers is in addition to the Fund’s pioneering private equity fund handed to Capital Management Botswana (CMB) a few years ago. From the initial tranche of P500 million, CMB’s mandate has been increased to P830 million with investments in companies such as Bona Life, Flo Tek and Wilderness Safaris.