Biggest Africa fund manager without key mandate from main client

Africa’s biggest fund manager said its R70 billion unlisted assets division has been without a mandate to invest from its largest client since March, highlighting the dysfunction in the unit that drives investment in Black-owned businesses.

The five-year agreement with the Government Employees Pension Fund, which accounts for 89% of the Public Investment Corp.’s total assets under management of R2.34 trillion lapsed on March 30 and has yet to be renewed, the PIC said in its annual report. That mandate doesn’t affect investments in listed equities, which the PIC also makes on behalf of the GEPF.

“The PIC team has worked on a new five-year commitment, which is being reviewed by the PIC and the GEPF,” it said in its annual report.

In May staff at the unlisted division, the Isibaya Fund, submitted complaints to the investment committee and senior executives at the PIC about management of the unit. In a letter seen by Bloomberg they said activity had ground to a halt and the organisation faced an “existential crisis.”

The Isibaya Fund was a central focus of a government backed commission of inquiry into the PIC that ended in 2019. Findings alleged that investment decisions had been made under political pressure and proper processes had not been followed.

The fund has a second mandate from the Unemployment Insurance Fund but that came to a halt after that institution’s reserves were drained by coronavirus-related payouts, leaving the unit with a single mandate from the Compensation Commissioner Fund.

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