- The PIC's mandate to manage unlisted investments for the GEPF lapsed in March 2021.
- The state-owned asset manager used to oversee R70 billion of the GEPF's unlisted investments, but stark findings by the Mpati Commission raised questions about governance at the PIC.
- It took more than a year to renegotiate a mandate for the unlisted investments.
After more than a year, the Government Employees' Pension Fund (GEPF) and the Public Investment Corporation (PIC) have finally agreed on a new mandate for unlisted investments.
When the PIC's mandate to oversee R70 billion of the GEPF's unlisted investment fund lapsed in March 2021, the pension fund didn't renew it.
The GEPF first introduced the unlisted developmental investment mandate in 1997, for an entity called the Isibaya Fund.
The mandate was renewed without problems over the years, until the Mpati Commission of Inquiry highlighted governance shortcomings and alleged corruption at the PIC.
In 2020, the commission found that many of the governance lapses involved unlisted investments, including the state-owned asset manager's investments in Ayo Technology. (Ayo was subsequently listed on the JSE.)
The PIC announced on Tuesday that the two institutions have now signed the new mandate.
In a statement, the PIC emphasised that the developmental investment funds falling under this newly negotiated mandate were crucial for generating financial and socioeconomic benefits for SA's economy. This money helps fund developmental projects in South Africa and the rest of Africa.
"[They do so] by addressing structural imbalances in the economy to facilitate transformation, economic growth, job creation, and environmental and financial returns," said the PIC in the statement.
The PIC didn't specify if it would still manage R70 billion under the Isibaya Fund like before, or whether the GEPF had reduced this. But the pension fund previously said that it expects to reduce the amount of money it allocates to the Isibaya Fund under the new mandate.
Nevertheless, the PIC said under the new mandate, the target of developmental investments for South Africa is between R300 million and R500 million per entity. But it may consider "attractive investments" starting at R100 million per entity. Its developmental investment portfolio for other African countries will mainly comprise of investments between $20 million (~R320 million) and $40 million.
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