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Johannesburg - The Government Employees Pension Fund (GEPF) is about to announce the names of the funds managers that will look after R90bn of its assets, which total R719bn.
This is according to Martin Kuscus, chairperson of the board of trustees of the GEPF, who was speaking at The Terrapin asset allocation summit in Sandton.
Kuscus said that the major beneficiaries will be boutique managers that have strong black empowerment credentials, and it appears that that number has been whittled down to 10 managers.
Kuscus confirmed that the process is almost complete and is in line with the GEPF policy framework. The pension fund has, in Kuscus' words, mopped up R90bn in assets that were held by the larger more established assets managers, colloquially referred to as the big four or big five, who were passive managers and charging fees as active managers.
Kuscus says that the fund's investment mandate - an 80-page document - signed the GEPF and the Public Investment Corporation (PIC) in September, is based on four policy issues.
The first concerns the development of intellectual property in the country and specifically in the investment industry, hence the decision to look for BEE-enabled boutique fund managers.
Thinking offshore
Kuscus says the R719bn fund could well be destroying value for its members if they only remain invested locally.
"The debate [on whether to take some funds offshore] will have to take place sooner, rather than later, as there are insufficient areas for a fund of their size to invest in locally," said Kuscus.
On the subject of investing in hedge funds, Kuscus said that the GEPF is still an old-school pension fund, which is underwritten by government, implying that this was not an option.
According to Vimal Chagan, chief operating officer at Advantage Asset Managers, Kuscus' comments should be seen in the context that up until 10 years ago, the GEPF was only invested in bonds.
In terms of investing offshore and looking at the hedge fund environment, Kuscus comments didn't fall on deaf ears and many of the asset managers present in the room certainly took note.
John Liackman, who is chairperson of Canon Asset Managers and on the board of the mine employees pension fund, suggested that the GEPF should invest offshore and allow some of the other pension funds to invest locally.
- Fin24