PIC grows assets to R2.3 trillion as UIF performance is slowed by TERS | Fin24

The PIC – which invests on behalf of government pension funds – is one of Africa’s largest asset managers.

• The Government Employees’ Pension Fund is the PIC’s biggest client and grew its assets by 28% in 2021.
• The payment of the Temporary Employee-Employer Relief Scheme by the UIF pulled down its performance.
• The PIC invests on behalf of several government employees pension funds.

The Public Investment Corporation (PIC), which was in 2018 subject to a lengthy inquiry into its affairs, has increased its asset management by nearly R440 billion in 2021, to R2.3 trillion – boosted by growth in its portfolios, it was announced on Thursday.

The state-owned fund – which invests on behalf of government pension funds – is one of Africa’s largest asset managers. Its assets in 2005 stood at R461 billion.

CEO Abel Sithole said the all client portfolios had shown growth in the 2021 financial year, apart from the Unemployment Insurance Fund (UIF), which has been paying out relief benefits to millions of members affected by the Covid-19 pandemic.

Sithole said the UIF portfolio declined by 24% from R151 billion to R116 billion, as at the end of 31 March 2021. The withdrawal of the Temporary Employee-Employer Relief Scheme (TERS) was a major driver behind the reduction in the fund’s assets under management. So far, more than R58 billion in wage support from the TERS has been paid to more than 267 000 employers and 5.4 million workers between April 2020 and March 2021.

The Government Employees’ Pension Fund (GEPF) portfolio, which is the PIC’s biggest client, grew by 28% to over R2 trillion, up from R1.633 trillion the previous financial year. Its third largest client, the Compensation Commissioner Fund, increased assets by 21% over the reporting period to R47 billion, while the Compensation Commissioner Pension Fund, its fourth-largest client, posted a 27% jump from around R27 billion to more than R34 billion.

The PIC invests in a broad range of portfolios, including mining, manufacturing, retail and telecommunications.

Its operations came under sharp scrutiny in the Mpati Commission of Inquiry, which probed its investment decisions and allegations of impropriety and mismanagement against some of its high ranking executives. The fund said it continues to implement its recommendations and is “working closely with law enforcement agencies to ensure that those implicated have their day in court”.

According to the fund, the board led by veteran administrator, Reuel Khoza, is working with an advisory panel led by retired Justice Yvonne Mokgoro to crystallise some aspects of the commission’s recommendations that merit forensic investigation.

Khoza, who is the fund’s interim board chairman, was appointed in July 2019, charged with “restoring the PIC to its former glory” – following the image and professional hit it had taken in the wake of the Mpati inquiry.

He said the board had effected several “notably positive changes and improvements” which include the revision of the memorandum of incorporation, introduction of a new management model that decoupled the position of the chief executive officer and the chief investment officer.

Previously the CEO of the PIC also acted as its chief investment officer.