NAPSA INVESTMENTS

OPERATIONS -

PRESENTATION

RESIDENT DOCTORS ASSOCIATION

24TH MARCH 2017

DOROTHY SOKO

DIRECTOR INVESTMENTS

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Contents Introduction/Background

Management of Investment Assets

Investment Guidelines

Allowable investments

Investment Portfolio

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Introduction Background:

February 2000- Inception of NAPSA

NAPSA Act Establishes the Scheme and the Authority-to administer the operations of the scheme and that of ZNPF.

ZNPF Assets and Liabilities – To be managed on custodial basis.

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Introduction Cont’d1. Establishment of the investments Department, prior to

this, all investments undertaken by Finance Department

2. Deals with the construction and maintenance of a collection of investments

3. December 2007 – Restructuring, some departments merged with others

4. Transformed and Included Investments in Real Estates , creation of Properties Section in the Directorate

VISION

To be the model social security institution in Africa

MISSION STATEMENTTo prudently administer and be

custodian of a viable social security scheme that guarantees income security to its members

Management of Investment Funds Management of the Investment funds is guided by the following;

NAPSA Act No 40 of 1996The main law that governs the running of investments is the National Pension Scheme Act No. 40 of 1996, and is the legislation that gave birth to NAPSA.

Investment Guidelines SI 19 of 2017define the principles that guide NAPSA in the management of its Investment Portfolio.

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Purpose of Investing Capital preservation and Risk reduction

To accumulate a reserve fund for benefits payments in future

Returns

To matching assets with future liabilities.

the value of assets at all times be adequate to cover value of scheme liabilities.

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Investments guidelines NAPSA will act prudently and in the sole interest of its

members and will

maximize its investment returns within acceptable levels of risk

diversify its portfolio and limit its risks of loss attributable to investment in any one company

Ensure that there is sufficient liquidity

Invest funds taking into account the term of its liabilities

NAPSA Investments Guidelines The Authority has undertaken a review of its current

investment to align long-term investment strategies and investment portfolios to maximize the return on investment within the acceptable range of investment risks.

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Asset Class Current IG Ceiling(%) Proposed (%)

GRZ Bonds/TBs - 2.5% minimum

Listed Equities 25 25

Corporate Bonds 25 25

Term Deposits 5 5

Real Estate – Direct 30 30

Indirect 10 30

Socially Econ Inv. 5 5

Leases 5

State Owned Ent. 5

Start ups.

Underwriting 5 5

Infrastructure N/A 15

Private Equity (non listed N/A 10

Collective Investment Schemes N/A 5

SPVS created by NAPSA N/A 100

Offshore 30 11

CURRENT & PROPOSED INVESTMENT GUIDELINES

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Investments- Treasury A properly constructed portfolio achieves a given level

of expected return with the least possible risk

Portfolio managers have a duty to create the best possible collection of investments for each customer’s unique needs and circumstances

NAPSA/ Pension Fund- Collects contributions and disburses various benefit payments to members

- collection of contributions

-Investments

-Benefits

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Asset Class Net Investment (K’) % of Portfolio

GRZ Bonds 5,110,817,989 30

Property 3,222,325,093 19

Term Deposit 3,772,627,640 22

Equities 1,386,146,349 8

T/Bills 3,664,186,093 21

Other Debt

investments

Corporate Bonds 115,367,138 1

Total 17,271,470,303 100

The NAPSA Investment Portfolio as at 31st

December 2016

Investments Portfolios in the Health Sector – At a Glance Health is a priority sector for the Authority and the

national because it is a basic human need.

Health impacts the ability of people to study, work and care for their families

access to quality health care promotes development and poverty reduction.

Across emerging markets, the private sector plays a significant role in health services and life

sciences, including for the poorest countries with scarce public resources.

NAPSA is uniquely positioned to promote INVESTMENTS in both public and private health care

Investments portfolio in the Health Sector by NAPSA Current- no investments in any specific health Sector

Investment portfolio

Predecessor ZNPF-GMMA PHACEUTICALS

Future consideration- Introduction of Infrasture, private equity, Socially and economically targeted investments, collective investments schemes, subsidiaries- provides opportunities and wider scope for the Authority to ventures into Health portfolios

Investments models such as PPPs, Co-Investments, Partnerships provides viable platforms for structuring successful deals and health care funding

Typical Portfolio Construction

Typical Investment portfolio %

Biotechnology 15

Health Distributors 2

Healthcare Equipment 10

Healthcare Facilities 5

Health Care Services 1

Health Care Supplies 1

Health Care Technology 3

Pharmaceuticals 50

Managed Healthcare 13

Total 100

Industry Returns1. ROE

2. Net yield

3. Asset growth

4. External management fees

5. Total transaction costs

6. Operating expenses

Industry success factorso Return on assets

o Return on equity Operating margin

Cost to income ratio

Staff cost to income Leverage

o Process efficiency

o Non-performing rental debtors

o Operational efficiency

THANK YOU

END