STIMULUS Investments is back in “investment-seeking mode”, and will kick off 2013 with due diligence on a company in the North, a potential deal worth more than N$40 million.
“We’re on an investment hunt,” Stimulus Private Equity managing director Monica Kalondo said on Friday.
Barely a year after Stimulus successfully rose N$250 million by listing preference shares on the Namibian Stock Exchange (NSX), the company recently rose another N$131 million in terms of a rights offer on the 2011 preference shares to existing shareholders.
This is evidence that Namibia has developed an appetite for private equity, or investment in unlisted companies, Kalondo said.
It is far cry from 2004, when Stimulus rose N$123 million on the NSX by listing preference shares and took three years to find the right investments. “Private equity then was a new concept and unknown as an asset class,” Kalondo said.
Eight years later, Stimulus has Namibia’s biggest private equity fund.
“Private equity as an asset class has undergone significant overhaul in the last decade and Stimulus is proud to be a forerunner in this industry,” Kalondo said.
“The introduction of additional private equity players in 2010 has ensured that the private equity market has expanded, with significant advantages for the economy and Namibian entrepreneurs. This private equity injection was primarily due to the implementation of the Unlisted Investment Policy of the Government Institutions Pension Fund (GIPF),” she said.
Stimulus’ current portfolio includes a 50% shareholding in Democratic Media Holdings (DMH), a deal concluded this year. Other assets include Plastic Packaging (36%), Polyoak Namibia (12,5%), Plaspack Properties Prosperita (36%), Nashua Namibia (26%), Joe’s Beerhouse Properties (82%), Cymot Group (25%) and Walvis Bay Stevedoring (45%).
Capital under Stimulus’ management currently totals N$381 million and its portfolio is worth more than N$400 million.
“During the first seven years of Stimulus’ existence, the portfolio achieved an investment return of 12,06% per annum,” Kalondo said. For the eleven months following the October 2011 capital raising, Stimulus achieved a portfolio return of 17,92%.
“Stimulus believes that private equity is a viable asset class for investors as, well-managed, it has the ability to produce superior returns. In addition to stemming capital outflow, it also provides Namibian entrepreneurs and businesses with alternative sources of capital,” Kalondo said.