GEPF grows investment portfolio by 8.3%, laments Steinhoff mess
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CAPE TOWN – The Government Employees Pension Fund (GEPF) announced on Wednesday that its investment portfolio recorded 8.3 percent growth at the tabling of its financial results contained in the 2017/18 annual report.
The increase on the investment portfolio was as a result of the performance in the domestic assets over the past year, particularly bonds and equities, according to a report by SANews.gov.za on Monday.
“GEPF’s investment portfolio grew by an impressive 8.3 percent from R1.6 trillion in 2017 to R1.8trln. This was achieved despite the South African economy only growing by 0.8 percent during 2017/18 financial year,” said the GEPF in a statement.
The pension fund’s principal executive officer Abel Sithole said listed equities increased by 10 percent, domestic bills and bonds by 6 percent, collective investment scheme by 7 percent due to new investment.
He said unlisted equities increased by 37 percent as a result of a positive fair value adjustment and additions.
“The GEPF’s accumulated funds and reserves have grown at an average rate of 10.21 percent over the past 10 years. The past year has indeed been one of renewed affirmation for GEPF, as we continue to actively fulfil our mandate to effect meaningful and sustainable change through our investments,” Sithole was quoted as saying.
Sithole said the fund in the year under review experienced an increase in member contributions, with 7.3 percent during the reporting period, going from R65.6 billion in 2017 to R70.4bn.
“Despite our investment portfolio’s impressive 8.3 percent growth – considering that the South African economy grew only by 0.8 percent during 2017/18), we cannot ignore the proverbial elephants in the room: the Steinhoff affair and to a lesser extent the case of VBS Mutual Bank, on which it is too early to comment.
“VBS bank was placed under curatorship on March 11, due to liquidity problems.
“The alleged accounting irregularities at Steinhoff International Holdings NV are most disappointing as GEPF expects the highest standards of corporate governance from all investee companies. As at 31 March 2017 the GEPF, through PIC, owned about R28 billion in Steinhoff International Holdings which is about 10 percent of the shares of the company and 1 percent of the total assets of the GEPF.
“Notwithstanding the collapse in the Steinhoff share, the GEPF portfolio remains financially healthy, because of its diversified nature. It is also important to note that GEPF members’ benefits will not be affected by these developments, given that the GEPF is a defined benefit pension fund,” reads the report in part.
Sithole said the fund in the year under review experienced an increase in member contributions, with 7.3% during the reporting period, going from R65.6 billion in 2017 to R70.4 billion.