PIC’s secret investments are unveiled
More than R1bn invested in Surve’s media
THE Public Investment Corporation (PIC) has finally provided parliament’s standing committee on finance with a comprehensive list of the unlisted investments of its Isibaya Fund, which totalled R44.6-billion as at end-March 2016.
This came as the DA put pressure on the PIC to disclose details of its unlisted investments, especially in Iqbal Survé’s Independent Media, and its investment in a company called Opiconsivia.
DA finance spokesman David Maynier has been pushing for the release of the information for several months in the interest of transparency.
The list of the Isibaya Fund’s investments include a R166million direct equity stake of 25% in Independent Media and R763-million in shareholder loans to the company, and R346-million of converted debt.
PIC executives appeared before the committee on Tuesday for a briefing on the corporation’s 2015-16 financial report.
The Isibaya Fund was established in 1999 to invest in projects that would have a positive social effect and that supported long-term economic, social and environmental growth. These projects were also expected to deliver positive returns for PIC’s clients, the largest of which are the Government Employees Pension Fund and Unemployment Insurance Fund.
MPs were informed that R23.5-billion of the Isibaya portfolio was invested in developmental investments and R21billion in private equity, of which R14.9-billion was in domestic equity and R6.2-billion non-domestic.
Of the R44.6-billion, R37.4-billion was invested in SA, with 29% of this invested in manufacturing, 16% in renewable energy, 9% in housing, 6.5% in agriculture, 6% in property-related sectors and the remaining 33% in various other sectors of the economy.
The $438-million (R6-billion) worth of investment in the rest of Africa was invested in financial services (33%), manufacturing (32%), telecommunications (24%) and the remainder in various other sectors.
Investment in the health sector in SA (R2-billion) was through the Razorite Healthcare Fund and black-owned hospital group Busamed. Investment in the education sector (R1.35-billion) was in Eduloan and the Schools and Education Investment Impact Fund.
At year-end R6.7-billion had been invested in the affordable housing sector and R9.7-billion had been committed to renewable energy projects, of which R6.8-billion had been invested in projects generating 2 318MW of electricity.
The Isibaya Fund had invested R3-billion in agriculture including direct investments in Afgri, Daybreak Farms, Just Veggies and Southern Farms, and indirect investments to Futuregrowth Agri Fund.
Investments in small- and medium-sized enterprises (SMMEs) amounted to R785million and included investments in financial intermediaries Business Partners, Mazwe Financial Services and Venda Building Society.
A total of 299 SMMEs had been facilitated and 60 169 community groups had been funded to start small businesses to sustain their families.
At the end of the financial year, the PIC’s total assets under management was R1.9-trillion. The information provided by the PIC showed the fund had produced an internal rate of return of 9.68%, higher than the benchmark 8.21%.
Maynier welcomed the disclosure of the “secret investments”, which included the name, type, value, internal rate of return and the names of all directors of all 250 investments as on March 31 2016. — BDLive