The CEO of the Botswana Stock Exchange, Thapelo Tsheole, is lobbying the country’s largest pension fund, the Botswana Public Officers Pension Fund (BPOPF), to support and grow an indigenous set of fund managers who will back indigenous ideas and companies through funding.
Tsheole was responding to a question from this publication during a Q&A session last week. After the CEO expressed views about the dominance of institutional investors on the stock market activity, The Business Weekly & Review asked him the extent of institutional investors’ involvement in supporting the BSE’s Tshipidi Mentorship programme. This was against the background that such investors often target well-established entities and overlook small companies which are the focus of the mentorship programme. “We need to have their buy-in to ultimately invest in these small companies,” Tsheole responded.
He explained that most of these institutional investors are not really looking at taking risks in the small companies and acknowledged that it will always be “a very big value proposition” to make by Tshipidi companies. “I think is quite fair because we wouldn’t want to take your pension fund money into risky investments,” Tsheole said. Even so, for the majority of the companies that he has seen that want to list, “there is value and the business case is there and we just need to see how it goes on”.
Tshoele observed that the lack of buy-in also has to do with the way that the mandates are allocated. In the past four or five years, he noted, BPOPF mandates were concentrated in very few asset managers, making it “very difficult” for new companies to actually buy in on investments. “What we have argued to BPOPF is that we need to grow an indigenous set of fund managers,” he said. “We need our own people in the fund management industry and running the asset management industry. All these asset management firms started from infancy during the apartheid era.
“We need to empower our own people to start our own indigenous fund managers who will look at the things with a more indigenous eye. If we don’t take that deliberate policy, we can talk all we want. with no success.” Tsheole noted that some of the names that the BSE has on the Tshipidi Mentorship programme have good potential. “An asset manager company in Cape Town will not see it the way I look at it,” he emphasised.