Jo-Maré Duddy - The Government Institutions Pension Fund (GIPF) has issued a statement saying it would “like to re-assure stakeholders and its members” that “the underlying companies and investments” in which Baobab Capital and the Baobab Growth Fund have invested on behalf on the Fund, “remains safe and sound”.
The Namibia Financial Institutions Supervisory Authority (Namfisa) is busy finalising the deregistration of Baobab Capital Pty Ltd and the Baobab Growth Fund, an unlisted Special Purpose Vehicle (SPV) in which, among others, the GIPF has invested millions.
“GIPF would like to assure the portfolio companies under the SPV that it is working speedily to replace the directors of the SPV who have resigned,” the general manager of marketing and stakeholders engagement of the GIPF, Edwin Tjiramba, said tonight.
The GIPF committed N$140 million in October 2016 to the only SPV, which has a venture capital mandate to invest in start-up companies, Tjiramba’s statement said.
“Hence this SPV has the smallest committed capital. The monies are committed over a 10-year period. As of July 2020, an amount of N$87 million has been drawn down by the SPV and is currently invested in various portfolio companies, which are still on track to fulfilling their mandates”, the statement quoted the chief executive officer and principal officer of the GIPF, David Nuyoma.
The statement continued: “GIPF is cognisant of the reasons why the fund manager and SPV licenses were terminated by Namfisa. Last year, GIPF discovered some irregularities through the SPV’s auditors. The board of the SPV, on recommendation of the GIPF, commissioned an independent investigation by APEX Fund Services to identify issues flagged by the auditors.”
The GIPF requested the directors of the SPV to take “drastic remedial actions”, according to the statement.
“Consequently, most of the issues found by the investigations were subsequently attended to and were being rectified by the fund manager and SPV until the directors of SPV resigned on 8 September 2020,” the GIPF said.
Both the fund manager and the SPV are regulated by Namfisa.
“Therefore, Namfisa also conducted its own inspection into the affairs of the two companies. Namfisa considered its own findings as well as the findings of the investigations by APEX Fund Services and decided to deregister the fund manager and the SPV,” the GIPF said.
The GIPF is cognisant of the “pivotal role it plays in the Namibian economy and the colossal impact it has on the members, and its other stakeholders”.
“It is on this premise that the Fund will continue to work closely with Namfisa to ensure that the portfolio investments held via the SPV remain safe. GIPF further remains committed to safeguard and grow the Fund for the benefit of its members,” the statement read.
Earlier tonight, the founder of Baobab Capital, Jerome Kisting, told Market Watch that investors’ money was “absolutely safe”.
Kisting said Baobab is busy filing an appeal against Namfisa’s decision, but wouldn’t elaborate on the grounds thereof.
On its website, Boabab describes itself as “an Africa-focused alternative investment firm”.
“Baobab Capital is an alternative investment manager that invests in early stage businesses in Southern Africa, growing them into medium and large-scale enterprises, through its three funds,” the company says.