JOHANNESBURG – The Public Investment Corporation (PIC) allocated more than R100 billion to black asset managers as it grew assets under management to R2.08 trillion in 2018, representing a growth rate of 8.6 percent, the organisation said in its annual report to March 2018.
It grew investments to the rest of the continent with $876 million (R12.36bn) approved for investments in Africa.
The PIC invests on behalf of South African public sector clients.
Among these are the Government Employees Pension Fund, which is a defined benefit pension fund for government employees and which is guaranteed by the government; Unemployment Insurance Fund, which is a short-term unemployment insurance with contributions from employers; and the Compensation Commissioners Fund, a fund that caters for employees injured on duty.
Individual clients’ portfolios have also grown over the years.
It reported that 152 226 jobs were created and sustained.
Over the past nine years, the PIC has been allocating a portion of its listed equity portfolio for management by black asset managers.
Started in 2009, the broad-based black economic empowerment (B-BBEE) development manager programme aims to transform the asset management industry by increasing participation of black owners and the number of black investment professionals (particularly black women) in the industry.
Transformation targets
Through this programme, the PIC increased allocations to black asset managers and holding the traditional, large, established firms accountable to transformation targets within their businesses.
At inception, R64bn was allocated across 18 mandates in the domestic listed equity and listed property asset classes.
At that time, seven of these mandates were managed by black-owned and over 80 percent of the assets allocated to established firms.
During the 2017/18 financial year, externalised assets had increased to R171.2bn through market movement and additional flows.
At March 31, 2018, R103.4bn, which is about 60 percent of externalised assets were managed by black-owned firms across domestic asset classes.
Over 85 percent of procurement spent was directed towards level 4 or better BEE companies, whilst approximately 98 percent of brokerage business (trading on the stock exchanges) was directed towards transformed stockbrokers who are 51 percent and above owned by black people.
It approved a total of R18.55bn approved for private equity, impact investing and unlisted properties.
Investments
Underpinned by fundamental in-house research, most of these investments were in healthcare, manufacturing and energy projects among others.
“We are pleased with the performance of the entire PIC portfolio, which was by all accounts brilliant, given that the year under review was riddled with domestic and global economic and political challenges,” PIC chief executive, Dr Daniel Matjila said.
During the year, R9.5bn was approved for impact investments, R5.8bn for unlisted properties and R3.25bn for investing in private equity and structured investments products.
Among others, through unlisted investments, the PIC has so far created and sustained 152 226 jobs; contributed 2 654.25 megawatts through its investments in renewable energy; funded 22 low fee hospitals and contributed to 3 049 hospital beds; contributed to the provision of more than 11 000 beds for students; and financed and supported 785 small and medium enterprises.
“Extensive research has been conducted to identify sectors of the economy, which could have high impact and there is a plan to accelerate investments in these sectors in the succeeding financial years,” it said in its report.