Africa’s Biggest Fund Manager Seeks to Salvage Soiled Reputation
Africa’s Biggest Fund Manager Seeks to Salvage Soiled Reputation
(Bloomberg) -- The image of Africa’s biggest fund manager has been damaged by allegations of misconduct and breaches of corporate governance and the institution must now strive to preserve what’s left of its reputation, its interim chairman Reuel Khoza said.
The Public Investment Corporation, which oversees 2.13 trillion rand ($139 billion) of mainly South African government worker pensions, has been the subject of a commission of inquiry. That’s involved months of public testimony into allegations of political interference and questionable investment decisions.
Key Insights
- The organization will need to “salvage what is left of its reputation,” Khoza said in The PIC’s annual report. The chief executive officer left in November and his acting replacement was suspended for interfering with the inquiry. Other senior executives have also been suspended. In a gallery of the money manager’s 15-member executive committee, eight were listed as being in an acting capacity, two were suspended and two others have left.
- Over a three-year period to the end of March the PIC said its listed investments returned an annual average of 4.75%, ahead of the 4% for its peers but below the 5.2% average inflation rate. Assets under management grew to 2.13 trillion rand in the financial year from 2.08 trillion rand the year before.
- The money manager approved investments of $873.7 million in the rest of Africa during the year, ranging from telecommunications in Angola to platinum processing in Zimbabwe.
“These interventions and prolonged negative publicity have impacted on the image, performance and staff morale of the PIC,” said Khoza, who was appointed as interim chairman in July as the government broke with the tradition of naming the deputy finance minister to the post.
The board is an interim one as the commission is scheduled to make recommendations on how the money manager is run by the end of this month.
To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net
To contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Robert Brand, John Viljoen
©2019 Bloomberg L.P.