Botswana’s leading insurance and assets management company, Botswana Insurance Holdings Limited (BIHL) is planning to introduce a Private Equity Fund (PEF) before the end of the year, BG Business has established.
The Botswana Stock Exchange listed company’s Chief Executive Gaffer Hassam told BG Business on the sidelines of their half-year financial results presentation this Wednesday that as a leading financial services provider, they want to give their clients and investors an alternative investment option, and generate more income for them. A private equity fund is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity, according to Wikipedia.
Hassam could not reveal the size of the PEF for no. “The fund will give our investors opportunities to penetrate foreign markets, and allow them to maximise their returns,” explained Hassam.
The fund, according to Kudzani Pickup, head of unlisted investments, will see BIHL, investing in world renowned and reputable companies. “After making specific amounts of returns from those offshore investments, we will allow our clients and investors to invest in that fund which would be the PEF, for a certain period of time and then distribute returns to them when the investment matures,” said Pickup. Targeted investment industries according to Pickup are the mining, oil industries and any other money spinning international companies. “However, BIHL will allow its clients to choose the type of industries or organisations they prefer to invest in, and the duration they are looking at, then we invest on their behalf using the PEF,” he explained, stressing that the PEF would be controlled to the clients’ advantage to minimise risks that may occur.
Both Hassam and Pickup, told BG Business that the PEF investment would give their clients and investors international exposure and growth. They said it would also come with a diversified investment plan, at a controlled manner and also allow them to make great returns. The 37-year-old company, which owns Botswana Life Insurance Limited and Botswana (BLIL) and Botswana Insurance Fund Management (BIFM), also unveiled a new corporate identity at the financial results presentation to keep up with market demands and image. However, the group’s financial results for the past six months saw a 41 percent decrease after they recorded a P175 million profit, compared to the P265 million recorded in the same period last year. Hassan attributed he drop to the challenging economic conditions in 2011. He said the effects were obvious, particularly in the retail market which is experiencing declining household incomes, which contributed negatively to the sales of their individual life policies. “It was also due to the effect of the Zambian transaction on reported figures as well as internal repositioning,” said Hassam. For the period under review, the group’s total assets also saw a decrease to P12 954 321 000 from P13 120 420 000 of the same period last year. However, Hassam said the group remains impressed with the results because after all, they exhibit impressive figures to their shareholders. Going forward, he said the group is revising strategies such as introducing new competitive products, which would bring in profits.