In light of Namibia’s prevailing recession coupled with the adverse impact of the Covid-19 pandemic and its numerous restrictions, economic analysts believe investments are a promising option for domestic economic growth. However, many investors feel Namibia needs to produce a conducive investment environment particularly as consumer and government spending both face significant constraints.
For this conducive investment environment some believe structural reforms are needed to promote long-term domestic growth specifically as investment from external sources has been declining over the years and foreign firms choose to invest in other jurisdictions.
As part of our 2021 Independence Supplement, New Era’s Senior Business Journalist, Edgar Brandt, sat down with CEO of Sanlam Investments, Tega Shiimi Ya Shiimi, to interrogate him on the importance of attracting investment into the domestic economy.
Q: What does Sanlam Investments do?
A: Sanlam Investments (SI) is an African heavyweight in wealth creation, investment management and protection. Our investment solutions encompass traditional, active, index tracking (smart beta and passive strategies), alternative and multi-managed investment strategies. SI Namibia also plays in the unlisted space with key focus areas in the unlisted property, debt funding and private equity space.
Sanlam Investments is one of Namibia’s largest asset managers and institutional investors with about N$28 billion in assets under management. Sanlam Investments Namibia not only manages Sanlam Namibia policyholder assets but also manages a large pool of assets for individual retail, institutional and corporate clients.
Q: How long have you, personally, been involved in the investment sphere, and what are some of the most valuable lessons you have learned during this time?
A: My career in the investment management game started in 2001. This year marks 20 years for me in the investment sphere. I have spent 17 years with Sanlam Investments and I have been the CEO of the Namibian business for 13 years.
Q: What is being done by your company and others to expand the Namibian asset management skills pool?
A: The Namibian investment industry has grown in leaps and bounds from when I personally entered the industry with less than 10 registered asset managers in the local market. According to Namfisa, as at December 2020, we currently have 30 investment managers, 24 unlisted managers and four linked investment services (LISP) providers. That is testimony of the leaps and bounds of the skills pooled that has been developed and the direct and indirect investment and employment opportunities for local Namibians.
The Namibian investment market is at an interesting point of its evolution. The industry is demanding Namibian asset managers to take on more responsibility from largely their South African counterparts.
A key leverage off the larger historic South African base cannot be ignored but the commendable strides made in empowering and employing local young Namibian investment professionals is commendable and continues to gain traction daily.
We at Sanlam Investments Namibia pride ourselves on the fact that our investment process and key investment decisions lay in the hands of a local investment team in Windhoek. We do however recognise that we are part of the global village and we continue to build on the local strength, obviously leveraging off the larger Sanlam’s 34-country footprint in Africa, their pool of technical expertise, solid balance sheet and their footprint in the developed markets.
Q: How important is corporate governance and governance in general in your industry?
A: Corporate governance and compliance are a non-negotiable part of our business process, as custodians of individuals’ and corporates’ contractual and discretionary savings. Be it pensions, medical aid funds and life savings, our fiduciary responsibility towards our clients cannot be compromised. Corporate governance guarantees that the fund manager appropriately manages these factors. We are responsible for lives and futures.
Q: What role does ethics play when you are managing other people’s money?
A: Ethics is at the forefront of the investment process. Our ethos is grounded on the basis that the mandates we have been entrusted with by our clients should always be adhered to. As fund managers we do not only empower our clients, we empower the companies and entities that we invest in. At Sanlam we consider the external effects of our actions and take full responsibility as we trust our process, which has been tried and tested through vigorous development over the years.
Q: In terms of deepening local financial markets, what do you think can be done to create more liquidity on the local bourse?
A: We have recognised that the biggest disconnect in the Namibian market is that the free float on the NSX does not fully cover the large savings pool, given our regulation requirements. Sanlam Investments recently launched an unlisted debt fund registered with Namfisa. We are aiming to implement a strategy that will empower Namibian companies at the pre-listing and grassroot level. We expect the debt fund to fuel companies with capital for them to eventually list on the NSX. We further are an aggressive investor in the local bond market as well as the primary listing. We further pride ourselves that our contractual investments exceed the local asset requirements currently prescribed at 45%. We also play in the unlisted property market space and have a keen interest to grow that portfolio locally.
Q: How would you categorise Namibia’s investment industry before and after the advent of the global pandemic?
A: Initially there was a high level of uncertainty around operations, however the industry quickly recognised that we can go back to business using online resources. However, the global pandemic also provided asset managers with the opportunity to justify their active management process and conviction. We believe the pandemic may have exposed the robustness of investment strategies of Namibian asset managers. At Sanlam our conservative and calculated strategies have allowed us to keep our clients satisfied. Our leverage off our balance sheet and guaranteed product offering have given many of our clients and policyholders comfort in the face of volatility and uncertainty.
Q: How did Sanlam Investments perform a) overall before Covid-19 and b) once the pandemic reared its head in Namibia?
A: Sanlam performed relatively well. Our team made a successful transition by utilising online resources to our advantage. In fact, Sanlam Investments Namibia won the Sanlam Pan-African Phoenix Award for the Best Asset Management business within the Group for best net flows (2020). This competition includes the Sanlam asset management businesses in Botswana, Kenya, Zimbabwe and Zambia in the unit trust and institutional space. This is testimony to our resilience and adaptability in trying times.
It is important to recognise that Sanlam Investments has maintained its flows and portfolio management capabilities to the same high standard before the pandemic and after the pandemic. Our tried and tested “pragmatic value investment philosophy” has assisted us in wading through the storm during these volatile and uncertain times.
Q: What is Sanlam Investment’s local market share?
A: Sanlam Investments Namibia is a large local player with about N$28 billion of assets under management. According to Namfisa stats, Sanlam Investments represents just under 11% of the total savings pool in Namibia, making it one of the top two largest players in the local market.
Q: How has Sanlam Investments been affected (if at all) by Covid-19?
A: Although we were not immune to the global shocks from the pandemic, through our years and trusted process, conviction in our investment process and philosophy we managed to weather the storm. However, with teamwork and resilience we boasted higher net flows relative to our peers in the group and stuck to our pragmatic value investment philosophy. We managed to protect our client’s capital during these turbulent times, something we pride ourselves on. We also strengthened our investment team and will continue to seek opportunities in growing the team further in 2021.
Q: What were the major economic factors that impacted Sanlam Investment’s performance this year?
A: The negative outlook in terms of GDP growth and employment impacted us significantly as lower levels of disposable income reduced the demand for investment products. With Namibia as an economy still under severe strain, we do however believe that we are at the bottom of all the bad news and are gearing ourselves to seek opportunities going forward.
Policy uncertainty and cost of regulation/compliance remains a concern to us in the ability for us in create a much more robust operating environment and being able to successfully and responsibly fulfil and adhere to our clients’ mandates.
Q: In terms of leadership, what does it take to be a successful CEO of a financial sector company, particularly during a global pandemic?
A: Having a passion to constantly learn and grow from all challenges is key. Being bold in conviction and execution, acceptance to failures and taking corrective action swiftly are imperative. Being vulnerable and reliant on your team and having a common goal/end in sight needs to be a reassured affirmation daily.
Q: What leadership qualities and techniques have you been forced to change or re-evaluate because of the global pandemic?
A: With these testing times, listening and patience have become virtues I have started to appreciate more and more. I have always subscribed to an ethos that empowers my team with growth opportunities, but also guaranteeing job security. At Sanlam we put humans first and encourage growth. Being vulnerable in the face of uncertainty should not be a weakness but rather an opportunity for reflection and growth.