Handsome Returns for Investment Firm


By Surihe Gaomas WINDHOEK Investment firm Allan Gray in partnership with Bermuda-based Orbis Investment Management Limited has achieved attractive investment returns for its clients in foreign markets over the past decade. The opening of Allan Gray’s office in Namibia in 1996 coincided with the relaxation of exchange controls, allowing South African and Namibian investors to invest a portion of their funds in foreign markets. Over the last ten years to 31 August 2006, Allan Gray Namibia’s clients’ investments in Orbis funds have achieved an annualized Namibian dollar return of 19.5 percent in comparison to the 12.7 percent return achieved by a 60 percent World Equity and 40 percent World Bond index investment. The compound effect of these returns is powerful: N$1-million invested 10 years ago with Orbis by Allan Gray’s Namibian pension fund clients is today worth N$5.9-million. This is a full N$2.6-million more than the N$3.3-million an equivalent N$1-million investment in the benchmark would be worth today. Last week, Allan Gray and Orbis delivered a roadshow presentation to various trustees of pension funds and local investors, explaining its portfolio structure and investment outlook for the next five years. “There is an attractiveness of investment in Asia where we see above average growth prospects,” said Allan Gray’s Joint Head of Institutional Services, Mahesh Cooper. Although most investors are focused on the short term, Orbis evaluates investments over a five-year time horizon. “People very much want to see short term gains,” rather than in the long term, said Cooper during an interview with New Era. The Orbis Global Equity portfolio includes the most attractive investment opportunities they can find around the world and as for Asia, Investment Analyst Sean Peche says that for life insurance “the market is unpenetrated, (and) offers great savings products and fast growing economies.” The top ten investments in the Orbis Global Equity Fund are currently Samsung Electronics, China Mobile (Hong Kong), Cisco Systems, LibertyGlobal, Toyota Industries, Reliant Energy, First Data, Marsh & McLennan, Comcas A and American International Group. Both Allan Gray and Orbis follow the same contrarian investment philosophy when it comes to investments. According to Peche this means, “Not doing what everyone else is doing”. “The best opportunities come when stocks are out of favour – so we often find ourselves avoiding the popular shares which have been bid up in price,” said Cooper. Quite significantly, Allan Gray Namibia’s Chief Executive Officer Mbakumua Hengari said that with the current 50 institutional clients Allan Gray Namibia has done well in attaining assets under management of close to N$10-billion. “The good news is that we are taking advantage of equities in the global market,” he added. This situation further bodes well with the Minister of Finance Saara Kuugongelwa-Amathila’s view that 20 percent of retirement fund assets can be invested outside the country. Thus, the aim is to increase the country’s exposure to investments overseas over the next four to five years. Next year the same Orbis Roadshow will be held in Windhoek and Swakopmund.