Gaffer Hassam, the Chief Executive at Botswana Insurance Holdings Limited (BIHL) is ready to raise the company’s flag, more than a year after he assumed the hot seat at the diversified outfit.
The Malawian born took over the grey-haired asset and management group at a time when there was a ‘leadership crisis,’ which resulted with the then Chief Executive Regina Sikalese –Vaka and long-time Botswana Investment Fund Management (BIFM) Chief Executive Victor Senye bolting out. BIFM is a subsidiary of BIHL managing the group’s assets of well over P20 billion. “I spent the first few months in my role stabilising the group,” said Hassam in a recent interview in Lusaka where they also have operations. “Our clients and shareholders needed to be assured that their investments are in good hands.” At the heart of the contention was that some influential Sanlam representatives at BIHL board were hell-bent on pushing their interest on management. Sanlam owns majority shares at the company.
Hassam, himself a former group Chief Financial Officer was forced to take a relook at all the company operational units such as human resource, finance and marketing among others. Fastracking to 2013, Hassam is confident the group has now stabilised and is ready to roll. Maximising the group’s resources across subsidiaries will help them cut costs and stay afloat. “Basically we have to ensure the group uses its strength in numbers to ensure we maximise resources to the best of our ability,” stated Hassam, who admitted the task has not been easy, but the fruits of their hardwork are now starting to show. Along the way, the company executives were also forced to take tough decisions, which Hassam said they don’t regret. One of the major decisions that were taken under his leadership was that of BIFM Capital.
The group pulled out their investments from the company, which is run by Tim Marshal and Rhys Carr. BIFM Capital is a financial services company in Botswana. “It was approved (the BIFM Capital deal) because it allowed us to concentrate on our core business,” Hassam said justifying the controversial transaction, which was one of the biggest deals involving a listed company locally. BIHL, which has also undergone restructuring at corporate level, has investments at Letshego and Funeral Services Group (FSG), also listed separately. Hassam said in the past two years the company has been successful in increasing their shareholding in the two entities. “The two are important to us as they sell our products and services,” he added. Letshego is a pan African unsecured lending outfit, while FSG is a funeral service provider. An attempt by BIHL to raise its stake on FSG hit a snag a few months ago, as both parties could not agree on the set price from the offeror (BIHL).
“We will still consider raising our stake using other options,” said Hassam, stressing they did not differ on price on offer, but rather the modality that was presented by the offeror. BIHL owns 28 percent of FSG, while it has 23 percent of Letshego. In the past few months, the company has rolled a number of products, which Hassam stated will be critical for ensuring shareholders and clients get value from their investments and services respectively. In April Collective Investment Units (CIU) were launched, ensuring clients have access to other investment vehicles they are not exposed to currently. “The CIUs have potential, but it is still early days to judge them,” explained Hassam adding their results would be released in the medium term. A private equity fund, which is currently housed within BIFM has also been established.
The fund offers clients diverse investment vehicles which have limited risks. A few years ago, the company toyed with the idea of establishing a separate property fund which was to be listed. Nothing has happened. Hassam said they have changed their minds on the issue. However, he stated they would still invest in properties-retail or commercial which offer shareholders value on their investments. They have invested in the Airport Junction and Rail Park malls in Gaborone. BIHL’s subsidiary, Botswana Life continues to perform satisfactorily despite the challenging economic circumstances its clients found themselves in. For the six months to June 2013, the company-led by Catherine Lesetedi-Letegele, posted an operating profit of P124, 6 million, up by 12 percent when compared to the same period in 2012.
Its biggest clients-civil servants continue to experience declining disposable income, which forces some to default on monthly premiums. A lack of salary increment for government workers continues to be a headache for the business. But what does the future hold for BIHL investments in the region, apart from African Life in Zambia? “We continue to look for investments opportunities outside Botswana, finding them is not easy,” stated Hassam. A joint plan with Sanlam to look for investments has not borne any fruits, at least for now.
African Life is an employee and asset management company, which BIHL through BIFM has a 49 percent stake in. Political and economic factors will always guide them before they do any investments. But sources fear that it will be hard for BIHL to penetrate the SADC region where its majority owner-Sanlam already has presence. “If we go on our own, we will be in competition with Sanlam,” confirmed Hassam. Meantime, both BIHL and Sanlam continue to enjoy a cordial working relation in terms of expertise. The establishment of BIHL Sure, a short term insurance company was a result of behind the scenes work between the two.
In fact some experts from Santam, Sanlam’s short-term business are said to have trained some staff of BIHL Sure. Back home BIHL, which has operations in the non-bank financial industry had a relief when regulator-Non Bank Financial Regulatory Authority (NBFIRA) decided to cut levies and fees. BIFM was one of the asset management companies, which publicly complained about the fees charged by the regulator, which they said adversely affect profitability. At a market capitalisation of P2, 9 billion, Hassam believes the company remains the darling of investors both at retail and institutional level.