Africa’s Largest Pension Fund Returns 8.6%

The Public Investment Corp. approaches $150 billion.

South Africa’s Public Investment Corp. gained 8.6% in the year ended March 31, according to the state-owned pension plan’s latest annual report.

The civil service fund’s total assets now stand at 2.08 trillion rand, or $147 billion. The Johannesburg-based organization’s assets were 1.91 trillion rand the year prior. It is Africa’s largest pension fund.

Dr. Daniel Matjila, the corporation’s chief executive officer, attributed the organization’s performance to “prudent investment decision-making, underpinned by diversification, robust investment process, and application of world-class ESG practices.” Matjila said the fund’s portfolio “performed brilliantly” during the year’s economic and political challenges.

The fund injected 9.5 billion rand into impact investments, 5.8 billion rand in unlisted properties, and 3.25 billion rand in private equity and structured investments.

Complicating matters was an accusation from the United Democratic Movement, an opposition party to the ruling African National Congress, that Matjila had used fund resources to bankroll the business of someone close to him and put money into a loss-ridden technology firm. The resulting inquiry led to the departure of the fund’s head of governance and other officials. Both Matjila and the Public Investment Corp. have denied any wrongdoing.

As a result, Cyril Ramaphosa, South Africa’s new president, said in August he will create a commission to examine into the fund’s alleged investment mistakes.

During the past financial year, the investment corporation restructured its organization. One of the larger challenges was splitting its chief investment officer role among four people who would cover private equity, listed, property, and developmental investments. This aims to “ensure alignment with the technical skills and expertise appropriate to each asset class,” as well as mitigate risks, according to the annual report.

As of March 31, the Public Investment Organization allocated 87.84% of its portfolio to its domestic listed equities section, which contains internally and externally managed listed stocks, cash and money markets, and property investments. Another 5.63% is in the unlisted domestic investment portion, which contains private equity, impact investments, and properties. The rest is in offshore and other Africa-based investments, which includes globally listed bonds and equities, and additional listed and unlisted investments throughout the continent.

Tags: , , , , ,