The Government Institutions Pensions Fund (GIPF), the biggest pension fund in Namibia, is on the lookout for private equity and venture capital funds with Namibia-only mandates to allocate up to 3.5% of its investment portfolio.

Sara Mezui-Engo, Manager of Unlisted Investments at the GIPF, said: “The Namibia financial market has shallow depth. Dual-listed shares make up most of our local market-cap, we are thus forced to invest 35% offshore, 25% within RSA; 5% Africa and only 35% within Namibia, which includes dual-listed shares.”

“Namibian capital is deployed outside our market. Private equity is there for a way to deploy domestic savings within our economy to spur growth at home. Over time the businesses supported by private equity should exit onto domestic stock exchange to bring depth and liquidity,” she told Africa Global Funds.

The GIPF, which had N$84.5bn ($6.88bn) of assets under management as of January 2015, had N$1.53bn ($124.6m) invested in private equity within Namibia.

“Following addition of Reg 29 of Pension Funds Act, property is now excluded reducing our domestic allocation to N$89m, way below compliance minimum of 1.75%,” said Mezui-Engo.

The current request for proposal is for private equity funds excluding secondary purchases and for venture capital funds excluding seed funding.

The above streams are for all sectors of business excluding property and real estate.

Mezui-Engo said that property and real estate has a specific allocation as per Regulation 28 capped to 25% whether listed or unlisted.

“In order to ensure diversification and growth at home within key sectors, property is excluded to encourage investment into businesses from diverse sectors,” she explained.

The GIPF said that the key objective of its private equity portfolio is to seek risk-adjusted returns over and above that of the public market.

Mezui-Engo said the pension fund would hope to achieve a minimum of 13% returns.

“We have enjoyed annualised returns of 19% over 5 year period with some of our funds and would like to continue on this trend,” she said.

Although the current proposal is only for the Namibia-only mandates, the GIPF can allocate up to 5% in private equity within Africa.

“We tested the Africa market through a funds of funds structure. As we increase our knowledge of Africa PE managers we seek to invest directly with fund managers. We plan to place a maximum of N$2.1bn within Africa given better returns in comparison to credit and listed equity, in as long as it meets our objectives,” said Mezui-Engo.

The closing date for the current submission is Friday, April, 17, 2015.