You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

Africa’s top pension fund backs scandal-plagued PIC

‘We have increased confidence in the PIC’s interim board.’
Image: Moneyweb

The new head of Africa’s biggest pension fund is retreating from his predecessor’s threat to withdraw money from the Public Investment Corp, as he backs a turnaround at the scandal-plagued asset manager.

That the former overseer of South Africa’s Government Employees Pension Fund is now at the helm of the state-owned PIC is also giving Musa Mabesa the confidence to entrust the bulk of its R1.9 trillion portfolio to the money manager.

Read: The GEPF faces five red flags

Mabesa, 37, took over from Abel Sithole last month as principal executive officer of the GEPF after Sithole moved to the PIC, which counts on the pension fund for the bulk of its assets. While Sithole had said shifting funds from the PIC to other managers was an option, Mabesa is opting to bolster scrutiny of the firm and give it time to rebuild trust.

“Diversifying who we give mandates to is a future discussion we can have,” Mabesa said in an interview Thursday. “We have increased confidence in the PIC’s interim board — and we know Abel.”

A judicial inquiry last year exposed lapses in the PIC’s governance and political interference in its investment decisions, with a third of the recommendations aimed at the company’s management. The inquiry also highlighted the PIC’s reliance on the GEPF, which accounts for 86% of its funds under management, and oversees the retirement savings of more than 1.2 million civil servants.

The filling of several high ranking vacant posts at the PIC also “improves functioning and provides comfort to us,” Mabesa said. Before taking the top role at the fund, Mabesa was head of corporate services at the GEPF.

Here are some highlights from the interview:

  • The GEPF hasn’t been approached about a debt-to-equity swap in debt-stricken state power company, Eskom Holdings.
    It is not actively considering changing its holding in Naspers Ltd.
  • As Naspers’s biggest shareholder, there has been concern that the GEPF is overexposed to the company, making the fund vulnerable to share moves of its underlying investment in Chinese games developer Tencent Holdings Ltd.
  • While the GEPF is still looking to increase its investments in the rest of Africa, finding suitable targets is going slowly.
  • The GEPF has 2% of its portfolio on the continent outside of South Africa, lower than its 5% threshold. The GEPF is also considering whether to increase the amount it invests outside of Africa.
  • South Africa needs help to improve domestic investment. President Cyril Ramaphosa wants the government to invest R100 billion in new infrastructure, with a view to spur 10 times as much spending from private investors. “There is a lot of scope for infrastructure, it does provide security for our investments and has potential for good returns.”

© 2020 Bloomberg

COMMENTS   6

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

How can you have a 37 year old in charge of a pension fund?

Not my money, not my pension fund or provident fund.

It is such a difficult field to be in, to make millions from millions.

It is not just about having an education.

Try make money from the JSE and you will understand.

Not your money ?

Your guarantee though, as a taxpayer.

ANC Cadre deployment. Talks the usual drivel.

Nothing wrong with appointing a young person as long as the experience and qualifications are vetted and checked.

Lets not forget the past CEO of the state pensions Oliphant who was dismissed for misconduct not so long ago. Kicking and screaming before he left the building. Unfortunately business integrity and ethics can be compromised if you are not brought up with them in mind.

‘Africa’s top pension fund’? Maybe Africa’s largest pension but surely one of the worst. Managed like an ANC-piggy bank with ‘race’ the chief investment criteria while beneficiaries are an afterthought.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / PODCASTS SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: