ASSETS under the management of the Public Investment Corporation grew 12.9% in the 2014-15 financial year to R1.8-trillion, making it one of the “most influential” organisations in the South African economy, the annual report tabled in Parliament last week noted.
The corporation, which invests funds on behalf of the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Commissioner Fund, among others, achieved a real rate of return on its portfolios of 13.72%.
Although the largest slice of assets under management are listed investments, the corporation is increasingly focusing its investment on unlisted developmental investments and private equity, CEO Daniel Matjila said. During the financial year to end-March the corporation approved R11.3bn for developmental investments, excluding its investment in listed infrastructure bonds and R1.8bn for private equity.
“Our focus on developmental investments and private equity is based on evidence that these assets classes have a direct impact on economic growth through job facilitation, transformation and improvement of ordinary people’s lives,” he said. The focus was to drive transformation in untransformed sectors and support emerging black industrialists.
Last year 26 unlisted transactions worth more than R13.1bn were approved, three of them in the rest of Africa. It committed more than R1.3bn to support emerging black fund managers in SA and Africa.
Of the total assets under management, 48.68% was invested in local equities, 34.31% in local bonds, 4.46% in cash and money market assets, 5.19% in property, 3.91% in offshore equities, 1.4% in offshore bonds, 0.65% in African equities outside of SA and 1.4% in the Isibaya fund.
The corporation invested R11.9bn on the continent last year. It entered into strategic partnerships with the African Development Bank and Russia’s Gazprombank, which is active in the oil and gas infrastructure sector.
“We will be accelerating investments in the rest of the African continent and other frontier markets as well as in Brics (countries),” Mr Matjila said. The report said investments in African private equity last year exceeded expectations due to the good pipeline of deals.
The corporation plans to align its investment strategy with the government’s policies and the priority sectors it has identified to foster economic growth and drive socioeconomic transformation.
Regarding its investment in the Victoria and Alfred Waterfront in Cape Town, the report said the construction of the final phase of the R1.5bn silo was under way. This involves the conversion of the old grain silo into an art museum.
The corporation made a R330m profit in the 2014-15 year.