WINDHOEK - The market value of the Government Institutions Pension Fund (GIPF) improved from N$50.1 billion recorded during the previous financial year to N$62 billion as at March 31 2013.
This represents an increase of 24.29 percent of the fund's total assets.
"In our view this return reflects a stellar and sturdy performance over the year even under difficult international conditions such as the European Debt Crisis. In earnest, the impressive growth in assets manifests the fund’s robust investment strategy and its flexibility in adapting to dynamic market forces," said Elaine Samson, GIPF chairperson, during the annual feedback session with stakeholders last Thursday evening.
The theme for the annual event was: “Towards a meaningful stakeholders’ engagement culture.”
According to Samson this theme had been thoughtfully coined to give credence to the fund's strategic resolve of improving GIPF stakeholders’ relationships.
"We have taken a new approach towards stakeholders’ engagement as we steer the fund and its mandate into the future," noted Samson.
Since 2009, GIPF has adopted a specialist manager approach in order to access the best skills available in the market for a variety of niche investment mandates.
GIPF has since performed above the average of the universe of balanced managers on a rolling 12-month basis for most of the period since implementation of the new strategy.
In March 2013, the GIPF returned 24.29 percent for 12 months. The average of the balanced managers was 20.20 percent, resulting in an outperformance of 4.09 percent.
"This change from under to out-performance was mainly due to the reversal of the foreign and African equity performance, as well as some of the historically poor performing managers in the offshore and SA equity portfolio outperforming their benchmark," said Samson.
She noted despite these gains she realizes that the fund’s resilience to market volatility lies in the ability to continuously refine its investment strategies in line with global best practices.
The composition of GIPF's assets remains heavily weighted in equity and bonds which accounts for 59 percent and 26 percent of the fund’s total assets respectively, which Samson and her team are convinced is suitable in terms of the fund's asset liability modelling.
In terms of the geographical spread of GIPF's assets, 38 percent is invested in Namibia, 28 percent in South Africa, and 8 percent in other African countries while 26 percent is in the international market.
Regarding GIPF's Unlisted Investment Policy, Samson noted that the fund continues to achieve sufficient forward momentum despite a myriad of challenges associated with this alternative asset class.
GIPF has committed in excess of N$2.3 billion towards 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 in renewable energy linked initiatives through the provision of credit financing to SMEs participating in this area.
Over N$479 million has been invested in immovable properties with long-term income and growth potential. Some development facilities have either been completed or are at advanced stages creating a significant number of employment opportunities for Namibians.
These include Gwashamba Property Development in Ondangwa, Grove Mall in Windhoek, Otjiwarongo Town Square and a number of residential and housing projects countrywide.
"It is our belief that through the Unlisted Investment Policy, GIPF complies with Regulation 28 of the Pension Funds Act that requires our institution to invest funds into the local economy and reduce the impact of capital flight out of the domestic economy," remarked Samson.
During the period under review the fund paid over N$1.5 billion in benefits while over N$2.1 billion was received in contributions. The increase in contributions is attributed to the upward shift in the total number of members as well as the salary review of civil servants.
GIPF's active members increased from 88 000 recorded during the last financial year to over 94 000 members. The number of annuitants also increased from 52 000 to 56 000.
By Edgar Brandt New Era Reporter
2013-11-11 09:45:24 | 6 years ago