By Nick Hedley
South Africa’s Public Investment Corporation (PIC), the
largest investment manager in Africa with about R2.5 trillion ($160 billion) in
assets under management, plans to increase its holdings of unlisted assets to
25% of its portfolio from just 5% currently.
The PIC, which has a new chief investment officer, Kabelo
Rikhotso, invests on behalf of public sector employees. Its main clients
include South Africa’s Government Employees Pension Fund (GEPF) and the
Unemployment Insurance Fund (UIF).
Earlier this year, the PIC and the GEPF signed a new
unlisted investment mandate, which is partially aimed at boosting enterprise
development and job creation. The investment manager is also reviewing its
mandates with other clients.
In a recent parliamentary oversight committee meeting, Rikhotso,
who took on the CIO role in May, said the PIC previously had one unlisted
mandate from the GEPF and UIF – a private equity allocation of about R70
billion.
Under the new mandate, private investments would be made via
fund of funds vehicles targeting South Africa and the rest of the continent, a
private equity vehicle focused only on South Africa, a rest-of-Africa fund, and
an agricultural fund. The PIC would also consider funding real estate developments
in under-supported rural areas.
These investments would seek strong financial returns, plus
“positive societal impact.” Rikhotso said there were opportunities in mineral
beneficiation and other sectors.
The PIC’s acting CEO, Makano Mosidi, said the firm would build
out its investment team to implement the unlisted mandate.
In terms of listed assets, about 80% of the PIC’s portfolio
is passively managed. The rest is managed internally and by external fund
managers, including Lwazi Capital and Mergence Investment Managers.
In early June, the PIC’s chief operating officer, Vuyani
Hako, was placed on “precautionary suspension” after allegations of misconduct
were made against him.
In the parliamentary oversight committee meeting, Mosidi
said Hako’s suspension was pending the outcome of an investigation, which was “at
an advanced stage.”
