GIPF outperforms investment peers
The Government Institutions Pension Fund (GIPF) has attributed its ability to remain resilient to the global economic slowdown to its strategy of changing to a specialist investment structure as opposed to maintaining balanced portfolios.
According to the fund’s CEO, David Nuyoma, this strategy allowed the Fund to select managers on the basis of skills and areas of strength while avoiding the risk of placing all its assets with a few managers purporting to be skilled in all areas.
“The market value of GIPF as at the end of June 2013 totalled N$63.425 billion recording a 22.53% growth for the 12-months rolling period. In our view, the Fund performed exceptionally well and it outperformed its peers especially those with a balanced managers’ approach,” he said.
“Taking into account performance of the Fund over the six month period from January to June, the Fund returned 7.23% against a benchmark of 6.85%, providing an outperformance of 0.36%. In our view, this return remains exceptional considering the size of the portfolio and the volatility of the markets during the quarter under review,” he added. But he said the performance of the Fund over a single quarter does not necessarily indicate performance levels over a long-term.
“We are always taking a long-term view as a logical way of assessing the Fund’s performance. Risk-adjusted returns of the Fund over all periods compares favourably to other Funds with similar constraints such as cost of trade, the limited lucrative shares in the market and challenges associated with larger portfolios,” said Nuyoma.
Regarding the Fund’s Unlisted Investment Policy, the CEO said, the Fund continues to achieve sufficient forward momentum despite a myriad of challenges associated with this alternative asset class. As at end of June 2013, the Fund has committed N$2.3 billion for its Unlisted Investment Portfolio and over N$679 million has already been injected into various projects countrywide.
“Some significant development projects covered include an injection of N$148 million into the Procurement Fund, a medium through which GIPF ensures the provision of short -term working capital and asset backed financing to SMEs who have contracts to render services to reputable entities. N$51 million has been invested into renewable energy initiatives through the provision of credit financing to SMEs participating in this area.”
“Over N$479 million has been invested into immovable properties with long-term income and growth potential. Some development facilities have either been completed or are at advance stages creating a significant number of employment opportunities for the Namibian population. These include Gwashamba Property Development in Ondangwa, Grove Mall in Windhoek, Otjiwarongo Town Square and a number of residential and housing projects countrywide,” he continued.
He said, the Fund believes that through its Unlisted Investment Policy, GIPF complies with Regulation 28 of the Pension Funds Act that requires institutional investors to invest funds into the local economy and reduce the net impact of capital flight out of the domestic economy.
“Despite this breakthrough, we remain of the view that there is lack of awareness about our Unlisted Investment Policy among Namibian entrepreneurs. This concern impedes our objective to cast our net widely and ensure broad-based participation from the Namibian business fraternity. In this regard, we will be implementing a strategy to market and brand the Unlisted Investment Policy. In this context, we will be asking the media to join us for this purpose of raising the level of awareness with entrepreneurs,” he said.