PIC wants to share cake among black asset firms
‘It’s hard to justify investing, except that they are black’
The Public Investment Corporation (PIC) has challenged emerging black-owned asset management firms to innovate to attract more investment from the entity.
Abel Sithole, the CEO of PIC, said Africa’s largest asset manager is already the biggest supporter of black- and women-owned asset management firms, noting that there is room for the asset manager to do more in that space.
“We are already a significant supporter of black asset managers, and we still have the scope and ability to play a much bigger role. That is the intention of the PIC and its clients,” said Sithole.
“The other thing which is important to the PIC and other pension funds in a bid to support participants in the asset management space is the extent with which they differentiate themselves.
“To the extent that they don’t offer something different, it becomes very difficult to justify why invest in them other than the fact that they are black, which in itself is a good reason to invest in them, but can’t be the only reason.”
Sithole, who was addressing the Association of Black Securities and Investment Professionals transformation series, said there is also scope for the asset manager to transform the white-dominated asset management firms and other sectors of the economy.
“Yes, we can aspire to change the future in terms of new black players. But actually, there is a bigger opportunity to transform the existing white players, whether they are asset managers or companies in general.
“One such example is making sure that the boards of those entities are also driving transformation within those entities.”
The PIC, which is the biggest investor on the JSE, has often come under fire for its “failure” to trust black investment firms with the enormous resources at its disposal. At the close of the financial year on March 2020, the PIC had assets under management valued at R1.9-trillion.
According to an annual Beeconomics survey produced by 27four, black-owned asset management firms control R668-billion of South Africa’s investing and savings industry. This represents 9% of the more than R4.6-trillion of savings and investments managed by the private sector.
Khanyi Gama, the chairperson of the finance and investment committee of the KZN Municipal Pension Fund, said
Yes, we can aspire to change the future in terms of new black players
there was a need for consolidation of black players in the industry.
“We have noticed that within the black asset management space, there is a lot of fragmentation. Instead of all of us coming together, we’d rather open our small firms and compete against each other,” said Gama.