‘Attacks on PIC investment practices unfounded’
DANIEL Matjila, the chief executive of the Public Investment Corporation (PIC), winner of the African Institutional Investment Personality of the year Award in New York last month, questions the objectives of some journalists and politicians regarding the PIC’s investments in unlisted South African firms.
“These attempts aim to undermine the professional decisions of the PIC and our management teams” he says.
The PIC has a triple bottom line mandate which is growing the value of investments, transforming the South African economy and investing in sustainable green projects.
The PIC tabled details of its unlisted investment portfolio of R47 billion in Parliament this week, and strangely the only investment that was highlighted was the PIC’s investment in Independent Media.
The media landscape is regarded as highly influential, and cannot be divorced from the overall turbulence that the country is facing. The PIC invested substantially in media companies over the years and Independent Media is just but one of the investments.
Multiple investments
Matjila points out that the Independent Media investment is aligned to the PIC’s objectives of transforming the ownership of media houses from foreign to black owned.
He finds it bizarre, but not suprising, that competing media companies are criticising the PIC’s investment in Independent Media while it is known that the PIC supported transformation of Times Media.
“The PIC’s investments are done with detailed due diligence processes and a clear understanding of the sectors we chose to invest in. Our media investments are no different” he argues.
“The time has come for all South Africans to focus on solutions. Our investments focus on sustainable returns over the long term, while stimulating economic growth and bringing about radical socio-economic transformation.”
Matjila says the PIC remains committed to investments that contribute to the development and transformation of the economy, as well as the financial services and asset management sectors within the prescripts of its clients’ mandates.
The PIC manage R1.8 trillion worth of assets – an equivalent of 40 percent of the country’s gross domestic product (GDP).
The listed equity component comprise of 40.59 percent of total assets under management, which amount to approximately 13 percent of the market capitalisation of the JSE.
Matjila says the PIC invests in various vulnerable sectors, such as mining, construction, agriculture and agro-processing, energy, manufacturing, beneficiation and education.
He says about 90 percent of its assets are invested in South Africa, while the rest have been ploughed abroad since 2012, particularly in Africa.
According to the latest annual report, investments in unlisted local companies amounted to 7.2 percent of the 20 percent earmarked; it is expected this portfolio might increase extensively in the near future as opportunities present themselves.
The investment in Independent Group supports the PIC’s mandate and long-term objectives to invest in unlisted companies and projects that contribute towards the transformation of the economy.
Independent, with its footprint in Africa, can play a leading role to advance opportunities for the PIC across the continent. The Independent Group is uniquely positioned to enhance the digitalisation of the African media sector.
Transformation
The PIC is confident the partnership with Independent will enhance transformation, economic and job creating activities that will adhere to the goals of the National Development Plan (NDP), as well as African growth and development targets.
One of the PIC’s largest investments in the media sector was the investment in the Naspers group. The strategy of Naspers to convert to the digital space has paid huge dividends for the group. Naspers grew over many years, with the support of Afrikaner businesses, to become the biggest company by market capitalisation on the JSE. This was achieved by embracing their number one thread, namely the digitalisation of the media industry.
In following its transformation goals and initiatives, the PIC in the same manner as with Naspers and other media companies, invested in the Independent Group. The group is geared to become Africa’s premium provider of content across all media platforms. The PIC is confident that Independent will lead the new media revolution by building and strengthening a truly transformed South Africa.
The unnecessary criticism against the partnership between the PIC and Independent Group is unfounded as both companies strive towards bringing about radical socio-economic transformation.
Minister Pravin Gordhan stated in the recent annual report: “Our own structural challenges and reforms are articulated in the NDP. Our economic recovery depends on our ability to convert the plan into actions that deliver on the promise of a better life for all”.
Despite the volatile global and domestic financial markets, poor South African economic performance and political uncertainty, the PIC performed exceptional by delivering double-digit returns, outperforming the CPI with more than 5 percent.
With returns of this magnitude every nurse, teacher, policeman, filing clerk, executive manager or any civil servant can be assured their pensions are in good hands and will yield handsome returns on retirement, while their hard earned income at the same time have a great economic impact on the SA landscape.