Treasury is responsible for the management of the Fund’s in-house portfolios, which includes Fixed Income and Strategic Equity holdings. It is also responsible for the overall funding and liquidity Management functions of the fund.
The Treasury investment approach is based on the overall the Strategic Asset Allocation of the GIPF as outlined in the fund’s Investment Policy Statement (and updated from time-to-time). To deliver on the mandate, the Treasury investment approach is based on three key pillars:
Fixed Income – We believe fixed income markets are at times inefficient and illiquid. Therefore, we buy high quality fixed income assets that can provide predictable and sustainable income to the fund, while we seek to provide a high degree of safety and liquidity by investing in a diversified and liquid portfolio of high-quality money market instruments that allow us to earn a competitive short-term rate of return.
Equity – We believe that the economic environment and the performance of a firm’s industry influence the value of a security and its rate of return, thus a top-down, three-step approach is used in estimating the value of businesses. However, as a long-term investor, we look at wealth creation beyond financial benefits, we buy equities of strategic nature that contributes to sustainable development by simultaneously delivering economic, social and environment benefits – the so called “triple bottom line”
Treasury portfolio include Fixed Income and Strategic Equity portfolios which are managed internally.
Fixed Income
To balance the trade-off between income and liquidity, the fixed income portfolio is divided into two tranches, the bond portfolio and money market portfolio.
Money Market Portfolio – this is a liquidity portfolio aimed at ensuring that adequate funds are readily available to cover day-to-day operational needs of the fund and to cater for other funding needs such as additional investments and capital drawdowns. Due to liquidity constraints, the fund typically invest in the most liquid and risk averse instruments with maturities not longer than 12 months. This includes different money market instruments such Treasury bills, Negotiable Certificate of Deposits (fixed & floating), Fixed deposits and other liquid instruments.
Investment Portfolio – This is a long-term portfolio through which excess funds over the liquidity portfolio are managed. Given its long-term nature, this portfolio is utilized to maximise expected investment returns through exposure to various risk premiums as stipulated in the fund’s Strategic Asset Allocation. The fund invest in Namibian Government bonds (nominal and ILBs) and other listed debt issued by SOE’s, local authorities, corporates, commercial banks, etc.
Strategic Equity – Treasury has the mandate to invest in Strategic Listed Equity. These are listed assets of strategic nature that contribute to sustainable development by simultaneously delivering economic, social and environmental benefits. Due to their strategic nature, these assets are managed internally on a buy and hold basis (passively).
The Treasury team trade in the money and capital markets through direct participation in public auctions, private placements and secondary market trading. You can contact our dealing room at:
