- CEO says BPOPF is currently under-exposed locally
- Would have the Fund invest more for the benefit of members
The country’s biggest pension fund, the Botswana Public Officers Pension Fund (BPOPF), endeavours to invest a minimum of 19 percent in domestic equities but remains under-exposed as things stand.
“We are below the limit, this is a big problem,” the CEO of BPOPF, Moemedi Malindah, said at the Tshipidi Investment Forum held in Gaborone on Tuesday this week. “If we are sitting at P19 billion and we have to be at P24 billion, that is a 5 percent gap.” BPOPF’s investments in Botswana equities currently stand at 18 percent.
Malindah said if the money is not invested, it means the pension fund is taking fewer risks than it should be, which in turn has an impact on the returns it ought to generate for members. Even so, he stated that when it comes to participation in Botswana’s capital markets, BPOPF has always been a significant player. “We have supported all listings through asset managers,” he said. “And it is a win-win situation when a company lists.”
Malindah asserted that one of the key instruments from the investment side is the first review of Prudential Fund Rule 2 that came into effect at the beginning of this month.
“The new addition is the ESG,” he said. “We are going to demand a lot now than we have done before from our asset managers, investors, listed companies and everyone around ESG. But we also want to put upfront our position around ESG. We are strong advocates of the G – governance.” He emphasised that BPOPF wants to be involved more in governance because it believes that the rise and fall of an entity revolves around governance.
“We are also strong advocates of the S aspect of ESG,” he said. When it comes to the E for the environment, Malindah added, they sometimes get partners from the international market whose thinking about the environment is not in sync with local thinking. “With the E it’s an exception,” he noted. “There are things that we will continue to do but it is not that we are against the environment.”