Pension money for a future

GIPF invests billions
The GIPF's cumulative investment performance over the 12 months to 31 March 2022 was 10.8% against a benchmark return of 9.8%, while the three-year performance was 9.7% against the benchmark of 9.6%.
Jo-Maré Duddy
At the end of its 2022 financial year, the Government Institutions Pension Fund (GIPF) held 26% of the issued share capital of locally-listed Capricorn Group, while its stakes in FirstRand Namibia and Standard Bank Namibia were 16% and 6%, respectively.
Except for FirstRand Namibia, where the GIPF increased its shareholding from 15%, the fund’s interest in locally-listed financial institutions remained the same as in its 2021 book year.
At the end of March 2022, the GIPF’s stake in Capricorn (of which Bank Windhoek is the flagship brand) was valued at N$1.91 billion – N$130 million or 7.3% higher than in the fund’s 2021 financial year. The value of its shareholding in FirstRand Namibia was N$1.238 billion and in Standard Bank Namibia N$157 million.
Compared to the GIPF’s 2021 financial year, the value of its interest in FirstRand Namibia increased by N$266 million or 27.4%. The GIPF’s value of its shareholding in Standard Bank Namibia, however, dropped by N$74 million or 47.1% to N$157 million.
At the end of March 2022, the GIPF’s investment in companies listed on the Local Index of the NSX was valued at about N$6.94 billion – nearly N$2.54 billion or 57.6% more than March 2021.
At the end of its 2022 book year, the GIPF’s stakes in other companies on the Local Index were: Namibia Breweries 15%; Oryx Properties 28%; Letshego (Namibia) Holdings 3%; Namibia Asset Management 16%; Stimulus Investments 13%; and Alpha Namibia Industries Renewable Energy Power (Anirep) 52%. The fund’s shareholding in these companies remained unchanged from its previous book year.
During the year under review, the GIPF also invested in Mobile Telecommunications Ltd (MTC) and Paratus Namibia Holdings, securing stakes of 29% and 18%, respectively, of the companies’ total shares in issue.
At the end of March 2022, according to the GIPF’s latest annual integrated report, the fund’s interests in the above-mentioned companies were: Namibia Breweries N$1.348 billion (2021: N$928.6 million); Oryx Properties N$248 million (2021: N$291.8 million); Letshego (Namibia) Holdings N$33 million (2021: N$25.3 million); Namibia Asset Management N$21 million (2021: N$20.1 million; Stimulus Investments N$78 million (2021: N$77.5 million); and Anirep N$79 million (2021: N$78.8 million).
The GIPF’s stakes in MTC and Paratus were valued at N$1.718 billion and N$112 million, respectively.
The GIPF invested in 15 companies dual-listed on the NSX during the year under review.
The fund’s exposure to dual-listed counters was approximately N$17.7 billion, compared to N$13.7 billion in 2021, spread across different sectors. Dual-listed Namibian assets count towards the requirement to invest at least 45% of assets within Namibia, but only up to 10%.
Some of the largest global companies with business interests in Namibia, such as Anglo-American plc and Standard Bank Group Limited, have dual listings in Namibia and either the London Stock Exchange (LSE) or Johannesburg Stock Exchange (JSE).
“Our interest in these multinationals is small in percentage terms due to the size of these companies. The dual-listed asset class is heavily skewed towards the financial sector and our holdings also reflect that,” the GIPF says in its 2022 Annual Integrated Report (AIR).
Dual-listed investments valued at more than N$1 billion at the end of March 2022 were Anglo American plc, FirstRand Limited, Nedbank Group Limited, Old Mutual Limited, Sanlam Limited, Shoprite Holdings Limited and Standard Bank Group Limited.
The GIPF last year committed N$20.3 billion to alternative investments, slightly less than the N$21.01 billion in 2021.
Of this, N$10.5 billion was invested outside Namibia (2021: N$12.21 billion). A total of N$5.3 billion was invested in Namibian unlisted investments (2021: N$4.8 billion), excluding N$1.87 billion held as direct passive investment and an amount of N$1.67 billion is invested in South Africa, according to the GIPF.
“The core focus of our alternative investments is to obtain attractive and sustainable returns for our members, while positively impacting the development of the country, society and/or the environment. Our investments are in property funds, private equity, private credit, infrastructure and, to a lesser extent, United States of America late-stage venture capital and South African property,” the fund said.
Of the GIPF money allocated to alternative or unlisted investments, 36% were earmarked for Namibia, 8% for South Africa and 31% for the rest of Africa. Nineteen percent were invested in Europe, while 3% went to investments in China and the US each.
In Namibia, the GIPF invested in 19 unlisted investment managers and at least 83 Namibian portfolio companies, with around N$2.1 billion still to be invested.
“These unlisted investments provide exposure to various sectors of the Namibian economy including property, venture capital and private equity, private debt, SMEs, renewable energy, infrastructure and affordable housing,” the fund said.
According to the GIPF, it made a “substantial and material positive contribution” to the socio-economic development in 2022 through its unlisted sector across all 14 regions of Namibia, while “enhancing the fund’s ability to maintain solid commercial returns”.
The GIPF’s regional investments totalled: Khomas N$1.7 billion; Otjozondjupa N$1.3 billion; Erongo N$507 million; Kavango East N$363 million; Oshana N$306 million; //Kharas N$247 million; Oshikoto N$246 million; Hardap N$177 million; Zambezi N$120 million; Omaheke N$90 million; Omusati N$53 million; Kavango West N$18 million; Ohangwena N$17 million; and Kunene N$10 million.
“GIPF understood from the outset that Namibia has a housing shortage. We also understood that we are uniquely positioned to make a meaningful impact on the Namibian housing landscape at terms that also assist us in delivering on our mandate regarding returns,” the fund said in its AIR.
The GIPF awarded mandates in this area following the approval of its unlisted investment policy as far back as 2010. It also invested in housing to meet the Harambee Prosperity Plan (HPP) goals with respect to residential land servicing, housing and sanitation.
The HPP goal is to construct 20 000 new houses nationwide and to service 26 000 new residential plots countrywide, to which GIPF has committed to take up at least 30% of this deliverable of the plan.
As at 31 March 2022, the GIPF has invested more than N$843.3 million in total in servicing 1 807 plots, constructing 5 810 houses, financing 2 890 housing loans through First Capital and creating 3 487 jobs.
As one of the largest institutional investors in Namibia, the GIPF is faced with the challenge of the shallow domestic market, characterised by a limited number of investment products and issuers, the fund said.
“As a result, the bulk of the fund’s exposure to domestic bonds is invested in Namibian government bonds. The fund, however, remains committed to supporting the local capital markets by investing in viable domestic corporate bonds as and when they become available. As of 31 March 2022, GIPF held 29% of listed domestic corporate bonds,” it added.
As at 31 March 2022, the GIPF held 25% or N$23.66 billion of the total government bonds in issue across all maturities. The fund’s exposure to Namibian government bonds comprises mainly of nominal bonds (85%), inflation-linked bonds (12%), while treasury bills make up 3%.
For the financial year ended 31 March 2022, the GIPF’s total assets stood at N$147.9 billion, an improvement compared to N$136.2 billion recorded in the previous financial year.
The accumulated funds and reserves increased by N$11.5 billion or 8.6%. The fund attributes the improvement as a result of consistent investments return.
The GIPF’s total liabilities and reserves stood at N$118.96 billion, the same amount recorded in the previous financial year.
The unallocated reserves (surplus) stood at N$28.2 billion for the period under review, compared to N$16.5 billion recorded in the previous financial year.
According to the GIPF’s actuarial report released last year, the fund remains fully funded and in a sound position financial position to honour its long-term liabilities per its funding policy, stipulating a funding level of 105-115%. The fund solvency level ending 31 March 2022 was 113.9%, from 110% in the prior year.
Statistics in the actuarial report indicated that liabilities for 11 551 active members between the ages of 55-60 stood at N$18.5 billion, 12 690 members between the ages 50-54 (N$15.2 billion) and 13 409 members between the ages of 45-49 (N$10.9 billion). The total liabilities for active members stood at N$64 billion. The next statutory actuarial valuation is due on 31 March 2024. – Additional reporting by Phillepus Uusiku