By Conville Britz
The Government Institutions Pension Fund’s (GIPF) Alternative Investment Strategy is aimed at optimizing the overall portfolio through diversification, matching liabilities in duration, inflation hedging and reducing volatility.
It further targets to invest in the real economy as a better reflection of the drivers of growth than only investing through stock exchanges. This philosophy has enabled us to back technology and innovation companies that are likely to disrupt today’s leaders on various stock exchanges, ensuring we back the future and enjoy the substantial profits that come with assuming such risk.
This philosophy has also enabled us to navigate the challenge of shallow capital markets on the African continent riddled by a high concentration in financials -, resources companies and or very few stocks. Through investing in the real economy we purposefully seek to achieve socio-economic benefits and other impact goals like job creation, reducing inequality, fostering technology adoption, bettering living standards, bettering infrastructure and transforming the communities from which our members hail from.
The alternative investments programme is global with 34% invested in Namibia. By investing in Namibia, GIPF provides capital in an economy with limited investment from other sources, particularly for equity positions. The goal is to contribute significantly to the growth of the local economy and address the development needs of the country’s 14 regions.
GIPF’s Alternative Investments target property funds, private equity funds including venture capital, private credit, and infrastructure projects. These investments pursued by GIPF have a dual strategy: While the primary objective is to generate attractive and sustainable returns for the Fund to meet its obligations to members, these investments are also expected to have a positive impact on the country, society, and environment where they are deployed.
As of 30 June 2024, the Fund invested N$21.3 billion into alternative investments, 34% of which is invested in the local economy. These investments are spread across 41 funds with 271 portfolio companies and 3 Fund of Funds with a further 71 indirect funds. This exposure is broadly diversified across geographies,strategies and exposed to various sectors like technology; renewable energy and affordable housing.
GIPF’s substantial investments in land servicing and housing are aimed at addressing Namibia’s housing shortage and supporting the Harambee Prosperity Plan (HPP) goals. The HPP Delivery of Urban Land, Housing & Sanitation goal is to construct 20,000 new houses nationwide and to service 26,000 new residential plots countrywide, to which GIPF has committed to take up at least 30% of this deliverable of the Plan.
As part of this commitment, the Fund has so far invested in servicing 5 761 plots, constructing 6 919 housing units, financing 2 890 house purchases through the First Capital Housing Fund, and creating 3 779 job opportunities.
*Conville Britz is General Manager of Investments at the Government Institutions Pension Fund (GIPF).
