Africa’s largest asset manager PIC tops R2-trillion in asset growth

Assets under management grow by less than 1% in year to March

01 October 2018 - 05:08 Linda Ensor

Principled stand: Dan Matjila, CEO of the Public Investment Corporation, has insisted on adhering to sound investment principles and standing up to looters. Rumour has it he is earmarked to be pushed out of office. Picture: SUNDAY TIMES

The Public Investment Corporation (PIC), Africa’s largest asset manager, grew its assets under management by less than 1% to R2.08-trillion in the year to end-March 2018 from R1.928-trillion the previous year.

Assets under management grew 0.75%, which represented a compound annual growth rate of 8.6%, PIC CEO Dan Matjila said in the annual report tabled in parliament on Friday.
The PIC invests on behalf of the Government Employees Pension Fund (GEPF) — its major client, which makes up 87.12% of the funds under management — as well as the Unemployment Insurance Fund, the Compensation Fund and other funds.
"The PIC listed equity assets, our largest single asset class, has consistently outperformed Swix-Alsi over an extended period," Matjila noted.

"The GEPF listed portfolio [combined] achieved an overall outperformance of 0.09% over a 24-month rolling period and 0.18% over a 36-month rolling period," Matjila said.
Of the assets under management, 46.33% are in listed equities, 33.2% are in bonds, 5.38% are in cash and money markets and 2.93% are in properties.
Unlisted investments include 1.02% in private equity, 2.35% in impact investing and 2.26% in properties.
Global listed equities make up 4.38% of the total portfolio, international listed bonds 0.99%, listed investments in Africa 0.92% and unlisted investments in Africa 0.24%.
Matjila noted that a total of R18.6bn was approved during the year for unlisted investments. Most of the investments were made in health care, manufacturing and energy projects.
Investment in the rest of the continent continued to grow, with $876m approved during the year.
At the end of March the PIC had over R100bn allocated towards BEE asset managers. About 98% of the PIC’s brokerage business was directed towards transformed stockbrokers who are 51% or more owned by blacks.
The PIC made a corporate profit of R417m (R532m).
The corporation has had to write down R82.3m of its investment in the Bophelo Insurance Group, which was highlighted in the auditor-general’s report on the PIC.
Bophelo had a material deposit with VBS Mutual Bank, which was placed under curatorship when it was unable to meet its obligations.
Insurance business
The Financial Services Board — now called the Financial Sector Conduct Authority — prohibited Bophelo from issuing a new insurance business because there were concerns about its financial soundness and its ability to meet the capital adequacy requirements.
Following a valuation by independent valuators, the PIC’s investment in preference shares and equity was impaired to nil "due to high business risk, capital injection requirements and operating stabilisation of the entity in the future," a note to the PIC’s financial statements said.
ensorl@businesslive.co.za.