The Botswana Public Officers Pension Fund (BPOPF) on Wednesday launched a fresh P1 billion private equity drive, days after the Court of Appeal kickstarted a probe to trace P400 million in pensioners’ funds unaccounted for in a fierce dispute against a local asset management firm.
On Wednesday, BPOPF CEO, Boitumelo Molefe said lessons had been learnt and the process of appointing the two managers of the latest private equity drive had been rigorous, spanning nine months.
BPOPF and the asset manager it chose in 2014 for the plus-P400 million private equity investment, fell out last year amid allegations of mismanagement and lack of accountability.
The asset manager claimed BPOPF had violated the partnership agreement and booted the pension fund out of the deal, paying BPOPF P50 million, despite investment valued at over P400 million.
The Court of Appeal on Friday ruled in favour of the Non-Bank Financial Regulatory Authority’s application to appoint a statutory manager to probe the asset manager and its dealings, a move that centres on tracing the pension funds and possibly undoing the BPOPF deal.
Molefe said partnership agreements had already been signed with two fund managers who will each have access to P500 million for investment in the local private equity market. The two fund managers are part of an incubation project in which the BPOPF sought to identify and develop citizen-owned asset managers through the placement of portfolios for management. A third fund manager, who would have handled a P500 million local equity portfolio, was disqualified at the last stages of assessment.
Under the incubation initiative, the BPOPF will expect its P1 billion back after 10 years, with returns.
“We have learnt our lessons from the CMB affair and the process to get to this point with
“We have confidence in the managers chosen and we believe they will be able to roll this out.” She told BusinessWeek: “Our tendering is now much more onerous; the process is more defined and we are using asset consultants. We are not doing the type of tendering as if we are buying paper. It’s a very involved process.
This particular initiative took between nine and 10 months before we could say we have ticked all the boxes”. Where one of BPOPF’s complaints against its previous private equity manager was the failure to provide audited statements of investments, the two new fund managers under the incubation project will be expected to provide monthly and quarterly feedback. “There could be losses along the way, but we hope the majority of contracts we get into will be successful,” Molefe said.
“Even the stock exchange has its ups and downs daily, but you want to track the long term and ask yourself whether you are achieving value for your members.”
The CEO said there was a possibility that any funds recovered through the statutory management of CMB would be reinvested under the incubation project.
Preliminary investigations by the statutory manager, former judge Peter Collins, have suggested that at least P200 million is immediately recoverable from investments made by CMB.