Namibia: First Asset Management Incubator Introduced By GIPF

The Government Institution Pension Fund (GIPF) this week introduced Areysteq Asset Management, as one of its incubated asset management.

The company officially commenced with its operations in 2018 and possesses a wealth of expertise in financial services and manages N$689 million of GIPF assets as at the end of September 2020.

According to GIPF, Areysteq seeks to increase the local pool of skills, build capacity and improve the economy with local employment, thereby contributing to local spending and domestic tax revenue.

"Arysteq's purpose is to challenge our clients' needs with unconventional expertise. With our 100% local team of skilled and experienced professionals, I believe that we can innovate and pioneer the exceptional. We have always had a passion for investments and the investment management industry. We see the incubation programme as a stepping-stone in reaching our vision of becoming a regional boutique asset management business. We hope to successfully complete the programme by complying with the conditions of the mandate and to graduate to a fully-fledged investment management company," said Andrew Jansen, Managing Director of Areysteq.

The boutique asset management business employs eight people. Three are Chartered Accountants (CAs), two Chartered Financial Analysts (CFAs), two with undergraduate degrees in Finance and one with an honour's degree in Economics. They possess in excess of 40 years of combined investment management and finance experience.

Areysteq has an investment management license, as well as a unit trust scheme license from NAMFISA. Under the unit trust scheme, they launched three funds, namely: a money market fund, a balanced fund as well as a real return fund. To date, they provide services to six institutional clients.

In terms of governance, Areysteq at the top level of its board, consists of two executive directors and two independent non-executive directors. One of the independent directors, launched the Financial Intelligence Centre at Bank of Namibia. He was the chairperson of NAMFISA, thereby providing valued oversight to ensure compliance with regulations as well as the implementation of policies.

The Areysteq Investment Committee, which comprises of five experts, meets on a quarterly basis to determine appropriate asset allocation within the confines of the mandates, as well as to ensure the investment philosophy is appropriately followed. Additionally, trade decisions are logged and approved before they are executed. The team also meets weekly to ensure suitable monitoring of portfolios.

At an operational level, Areysteq ensures appropriate segregation of duties between captures of transactions and authorisers of transactions. In addition, they always apply strict segregation between the company's funds and clients' monies. Areysteq procured a system that ensures the most accurate and complete recording of portfolio transactions. This is concluded by a month-end review process that includes a report to clients.

At a compliance level, Areysteq has an in-house process that ensures compliance with critical laws and regulations and ensure complete, accurate and valid reporting to the regulator and the GIPF. Additionally, the custodian reviews their portfolios on a weekly basis for prudential breaches as well as compliance with their policies and trust deed.

The company is not affiliated to any global associations, but locally they are a member of Namibia Association of Savings and Investment (NASIA). In the Long-term, they wish to be associated as an asset management company to the Chartered Financial Analysts Institute.

With regards to the Covid-19 Pandemic, "We do not invest with the expectation of a pandemic or any other catastrophe around the corner. This pandemic could not have been predicted. What we do have in our tool kit, is an investment philosophy and processes that have been tried and tested. We also use a resilient strategy, which has weathered the global financial crisis of 2010. Our approach is therefore, to painstakingly follow our philosophy, strategy and process, which is on our website, and in our owner's manual. Two of our main philosophic pillars are; firstly, the margin of safety, in which we ensure that if we make a mistake, it is not expensive. Secondly, the long term in which we give ourselves ample time to realize the returns that we wish to generate. We view COVID19 as a temporary exogenous event that is of a short-term nature and that will pass," added Jansen.

"The last three years since operations begun, has truly been rewarding. We are humbled by what we achieved as well as the confidence that our stakeholders have shown in us. We are truly happy and excited that we were among the first asset management companies to be selected for the incubation programme. We also hope and believe that through this first step taken by GIPF, other institutions will also follow in setting up their own incubation programmes, to further add to the development of the industry in Namibia," Jansen concluded.

More From: Namibia Economist

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