A new entrant in the local investment management market is set to shake up the domestic capital market, its Managing Director Bakang Seretse said.Afena Capital is an asset and investment management outfit recently launched in Botswana to provide local and international asset management services to institutional investors.
Afena Capital Botswana is a 55/45 percent joint venture between Afena Propriety Limited and Batswana citizen management team, which comprises Seretse, Alphonse Ndzinge - Chief Investment Officer (CIO) and Sharifa Noor, - Chief Operations Officer (COO).Former market analyst at Investec, Seretse said they decided to set up in Botswana as it offers opportunities and because they understand its market.
Non-Bank Financial Institutions Regulating Authority (NBFIRA) registered the company in November 2012.
“We seek to optimise performance over the medium to long term without exposing our clients to unnecessary risk,” said Seretse, a finance graduate from Curtain Business School in Australia.
Afena Capital believes in active investment management and also appreciates that in practice, true active management in Botswana is constrained by the narrow and illiquid nature of the market, said the MD. “We have therefore set up in Botswana to generate a portfolio that delivers attractive risk adjusted returns,” he said.
Further, Seretse said Afena Capital was established in 2005 in Cape Town, with investment offerings of fully discretionary balanced mandates, domestic balanced mandates, specialist domestic equity mandates and specialist domestic fixed income mandates.
Under equities, Seretse, also a Bachelor of Commerce in International Business Finance graduate said Afena Capital aims to buy quality businesses below their assessment of their intrinsic value and invest in companies that offer the highest potential returns over the long term guided by Afena’s depth fundamental research. “We are also long term investors who believe that share prices ultimately reflect a business’ true economics, not its short term performance. We therefore tend to favour businesses we comprehend with good long term economics,” asserted Seretse.
With fixed income investments, the Afena Capital seeks to invest in the most attractive opportunities across a wide range of fixed income asset classes including bonds, money market, credit, preference shares and listed property. “More investment choices mean lower portfolio risks, higher liquidity and more opportunities to generate returns.”
The company is expected to cut its teeth in a highly competitive market which includes Bifm Capital, Allan Gray, Stanbic Investment Management Services and Investec.Seretse further said that Afena Capital’s broad portfolio will place them above competition. “Already we have a few clients lined up,” he reveals, declining to be drawn into details of his clientele and the value of investments they currently manage in Botswana.
Afena Capital of South Africa is well entrenched in the South African economy. From their financial year ending December 2010, Afena Capital was managing R18 billion (about P17.2 billion) worth of investments, which further expanded to R19 billion (about 18.2 billion), R23 billion (an equivalent of P22.2 billion) respectively.
“We have a client base of over 50 institutional and personal investors,” said the highly optimistic Seretse, adding that they are amongst South Africa’s 20 largest asset managers. The company employs 25 people between the two countries.