GIPF succeeding amid market instability
Windhoek – Despite a turbulent market, Namibia’s Government Institutions Pension Fund’s assets continue to grow with the total assets breaching the R100 billion mark, as of September 30.
The total assets are now worth R106,3 billion, despite The Southern Times establishing that the company lost more than R200 million in investments alone this year. The R200 million lost in investments was due to local and global economic conditions.
According to Government Institutions Pension Fund (GIPF), the global conditions in the geopolitical space have been affected by many developments, which affected international markets, such as, the German elections, the ever-escalating North Korean tensions, tense Brexit negotiations and US (tax) reforms, which all moved investor sentiments.
Meanwhile, on the continent, GIPF says it cannot ignore the economic and political developments taking place next door given the fact that the Namibian dollar is linked to the South Africa rand.
Nevertheless, GIPF CEO David Nuyoma says the pension fund passed the R100 billion mark despite continued market volatility.
Speaking at the annual stakeholder’s gala dinner held last week, Nuyoma said this is attributed mostly to acceptable performance on the local equity space and good performance from their international equity allocations, with the impact of the depreciating currency also chipping in.
Nuyoma, however, said the GIPF investment strategy remained resilient in the troubled market conditions and uncertainties.
One of the notable investments for GIPF was the acquisition of a 25 percent interest in Capricorn Investment Group at a cost of over R2 billion in March 2017.
In terms of GIPF global geographical split of asset allocation by region, most of the company’s investments are in Namibia with over 49 percent invested locally. This is followed by more than 25 percent in the international markets, over 18 percent in South Africa and the remaining 6.9 percent in the rest of Africa.
Looking at the asset class breakdown, GIPF has diversified its investments with equities taking up the larger portion (over 55 percent) in this portfolio; fixed assets make up slightly over 20 percent with 16.8 percent in property. The rest of the allocations are in private equity, loans and cash portfolios.
GIPF also remains the largest institutional investor in Namibia, with the company investing over R4 billion in the local economy via its unlisted investment policy since it appointed the first round of fund managers in 2010.
Speaking at the gala dinner, GIPF’s chairman of board of trustees, Goms Menettè, said the Fund is one of the biggest contributors to the socio-economic wellbeing of the society. He said this puts GIPF under an obligation to grow and maintain this national safety net for the benefit of its members.
During the period ending March 2017, GIPF has paid out R2,9 billion in benefits, NS of this amount R1,3 billion was paid as monthly pensions.
“Sadly, we lose hundreds of our members annually and the Fund is left with the responsibility of taking care of the beneficiaries left behind by our members. GIPF currently takes care of close to 19,000 orphans and almost 9,000 widows and widowers, who are considered to be the most vulnerable members of our society,” said Menettè.
In this regard, Menettè said the Fund offers funeral benefits at no cost to its members, their spouses and children along with a lump sum and monthly benefits paid to the deceased’s loved ones. During the financial year ended 31 March 2017, GIPF paid out over R121 million in death benefits and over R9.1 million in funeral benefits.
As a fund, Menettè said one of the challenges experienced, especially in the process of settling death claims, is the time it takes to identify all the beneficiaries of a member who are entitled to receive a benefit.
“We have found that members while still alive don’t always update their beneficiary nomination forms and include all of their dependents. This leaves the Fund in a difficult position of tracing all qualifying dependents to enable a claim to be paid out,” he said.
He, however, said GIPF must continue to innovate and look at practical ways of not holding beneficiaries hostage.
“Whilst investigations proceed, we have recently agreed as a board to implement guidelines, which allow partial payments to be made to those claimants who have come forth and whose documents are up to date with the remainder to be distributed as the outstanding claims are brought forth.”