Govt pension fund looks offshore
ADDED INVESTMENT: MOVE COULD HAVE SIGNIFICANT IMPACT FOR LISTED COMPANIES
The GEPF currently has over 92% of its assets invested in JSE-listed companies.
The Government Employees Pension Fund (GEPF) is planning to invest over its R2 trillion under management outside SA and in unlisted assets to reduce risk of overexposure to locally-traded companies.
The strategy was outlined by GEPF principal executive officer Abel Sithole to a commission of inquiry into allegations of wrongdoing and poor governance at the Public Investment Corporation (PIC), the fund’s biggest manager.
The GEPF has over 92% of its assets invested in companies trading on the JSE and is a significant holder of government bonds and those of state-owned enterprises, he said.
“We now need to have that discussion with the finance minister.”
The GEPF’s “significant home bias” isn’t wrong and has historically served the GEPF well, but it needs to manage risk, he said.
Moving more GEPF cash offshore could send shockwaves through SA’s listed companies, many of which count the PIC as its biggest shareholder.
Meanwhile, increased investment in unlisted assets may help back new industries and support black entrepreneurs, he said, part of a wider initiative to redress economic imbalances.
When asked by one commissioner how much the GEPF would look to invest outside the country, the executive said private SA pension funds are able to keep as much as 30% of their assets offshore.
The GEPF wouldn’t do the same immediately, but it would “probably make sense over time.”