Social investment ‘will not reduce pensions’
CAPE TOWN — The Government Employees Pension Fund’s (GEPF’s) R13bn investment in a range of socially responsible ventures would not compromise the returns achieved for pensioners, Deputy Finance Minister Nhlanhla Nene said yesterday.
The GEPF announced yesterday that R13bn would be invested in various sectors to boost job creation and contribute to renewable energy, food security and broadbased black economic empowerment (BEE).
“This forms part of GEPF’s long-term developmental investment strategy whereby 5% (about R60bn) of its total assets (of over R1-trillion) is allocated for investment in commercially viable South African-based projects that will have positive, long-term impacts on development, in addition to providing the financial return expected by the board,” the statement read.
A R5bn investment would be made in the environmental sustainability fund, R3bn in the priority sector’s investment fund and R5bn in the South African private equity fund. The Isibaya division of the Public Investment Corporation (PIC) would manage the funds. “This type of investment will not compromise returns which form part of the mandate which the GEPF gives to the PIC,” Mr Nene said.
The GEPF has more than 1.2million active members and over 360,000 pensioners.
He said the investments also did not mark a shift in investment policy by the GEPF and the PIC.
Socially responsible investment had been at the heart of the PIC’s investment strategy and had been built up gradually over the past two years, Mr Nene said.
SA and the PIC were signatories to the United Nations Principles of Responsible Investment and the United Nations Global Compact. Therefore, funding was only provided for projects and to entities which promoted environmental social and good governance practices.
According to the GEPF, the environmental sustainability fund will invest in energy renewables and efficiency, energy storage, clean energy and recycling projects. The fund is expected to generate 500MW of new, renewable energy and 300-million litres of biofuel a year and create about 3,000 jobs during and after the construction of renewable energy plants and recycling centres.
The priority sectors investment fund will focus on job creation and food security projects, including manufacturing, agriculture, tourism, mining beneficiation and agro-processing.
The South African private equity fund will concentrate on medium-to-large capital buy-outs, and mergers and acquisitions, and will promote broad-based BEE. .
GEPF principal officer John Oliphant said the sustainability of the GEPF investment portfolio was intrinsically linked to the growth of the economy.
“With more than R1-trillion assets under management, representing a third of the SA gross domestic product, we think it is prudent to invest in projects that contribute to economic growth and job creation.”