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Johannesburg - The Public Investment Corporation (PIC) will switch billions of rands in government pension funds on April 1 to black money managers in an effort to support them, it said in a statement on Friday.
"... the Government Employees Pension Fund (GEPF) mandate provides for transformation of the industry through the participation of black economic empowerment (BEE) managers and the development of an incubation fund." the statement said.
The new equity fund structure, announced by PIC chief investment officer Daniel Matjila, maintained 25% of the pension fund's investment in equities through a blend of external managers.
The PIC managed the balance of equities investments in-house.
Following the evaluation of tenders according to pre-determined criteria including overall performance and broad-based BEE, the PIC said it had allocated general equity mandates amounting to 30.5% of its externally managed equity funds, to Stanlib, Absa, Coronation, Kagiso and Taquanta.
A further 16.7% had been allocated to style mandates managed by Omigsa, Cadiz and Frater while 36.8 percent was being invested in industry mandates through Prudential, Investec, Sanlam Investment Managers, and Coronation.
Incubation managers including Argon and Renaissance would manage four percent of the equity funds, the PIC said.
A further 12 percent was yet to be allocated in this asset class.
An allocation of 10% of the listed property portfolio was made to Catalyst, Sortino and Meago to manage listed property funds.
The announcement followed an 18-month tender process to improve the risk/return characteristics of the fund and to comply with the GEPF mandate.
"The purpose of the process was to solicit investment tenders to determine the blend of specialist asset managers that will best achieve the overall performance goal set by the GEPF," said Matjila.
"Through rigorous due diligence we have identified those managers best suited to manage differentiated investment mandates."
Broad-based BEE carried a weight of 30%, indicating the importance assigned to transformation, said John Oliphant, GEPF's head of investment and actuarial services.
"The rationale behind this decision was to level the playing field between well-established managers with a distinguished performance track record and not such good BEE credentials and emerging black managers with a shorter performance track record."
- Sapa
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