Latest news with #R3-trillion
Daily Maverick
14-07-2025
- Business
- Daily Maverick
After the Bell: The staggering size and stumbles of the colossal PIC
While so many of the Public Investment Corporation's investments are in listed entities and we can all see whether it's making good decisions, the problems come in with its unlisted investments where, perhaps, someone gets to play with a huge amount of money without a huge amount of attention. If it is true that compound interest is the 'eighth wonder of the world', then the Public Investment Corporation (PIC) must be its colossus. It is so staggeringly big that it almost defies comprehension. The PIC currently has more than R3-trillion in assets. And it controls about 10% of the JSE. The scale of it is so big that its investment decisions could not just make or break companies, they might even make or break entire industries in South Africa. It makes the proposed Transformation Fund that would invest R100-billion look like a tiddler by comparison. It is just that big. There are important reasons it got so big, but one of them must be its age. It was created in 1911. That's just one year after South Africa was formed as a nation state in a colonial project. Like Warren Buffett's investing career, the PIC is a really good example of how time in the market is such an important factor. At the same time, of course, as the number of government workers has increased (leading to many, many bitter fights), so has the money it has to manage. The Government Employees' Pension Fund is its main client – millions go from government employee salaries into the fund every month. Considering how much money we are talking about, it is quite strange that we don't talk about it more. One of the reasons for that is so many of its investments are in listed entities. Basically it is putting money into companies listed on the JSE. And that means we can all see whether or not it's making good decisions. This is a kind of forced transparency (in its 2024 annual financial statements it flags 'transparency' as its first pillar of governance'). And by and large, it works. The problems come in, obviously, in its unlisted investments. This is where it makes decisions that we cannot see so easily. And I suspect we are going to see a lot more attention on this soon. On Monday, News24 published an important story saying that the acting head of the manager's unlisted investments unit, Thabiso Moshikara, is being accused of trying to get a R3-million bribe from someone whose company is being funded by the PIC. The person making the claim, Ralebala Mampeule, even claims Moshikara came to his house with 'unidentified males'. This must have come as a huge shock to the PIC and they will now have to investigate thoroughly. The problem is that it could take quite a while to know for sure what happened. Unfortunately, we now live in a society where it's entirely possible that someone offered Moshikara money for his influence, and when he refused, decided to simply make something up to get rid of him. Or it could all be true. At the same time, the PIC has recently been under fire over the Daybreak Farms fiasco. There it was quite clear that some of the directors and managers were just extracting money from a failing enterprise. While workers were protesting because they had not been paid and chickens were suffering because they were not being fed, the chair, Bojane Segooa, hung on until the last minute. The moment she received a payment of R625,000, she resigned. Daybreak is wholly owned by the PIC. Sunday Times journalist Sabelo Skiti had been warning us for years and years that this would happen at Daybreak. And his reporting and warnings were ignored by the PIC. This has infuriated Finance Minister Enoch Godongwana to the point where he has instituted an inquiry into the unlisted fund. I've never understood why an institution as massive as the PIC would not act when someone like Skiti reports on Daybreak in the way he did. It surely has the resources to monitor its unlisted investments. It is negligence that borders on the criminal to allow this to happen. I would think that its main customers, government workers, would be the first to shout and scream when this happens. It is their money that is going up in smoke. But they don't, because they're going to be fine. The pensions they receive are a defined benefit, meaning they'll receive the same amount of money no matter what happens to the PIC's investments. This is probably a very good thing. Workers should not suffer in their old age because, for example, Markus Jooste took everyone for a ride at Steinhoff. But it does mean that perhaps, just perhaps, someone gets to play with a huge amount of money without a huge amount of attention. It does look like the PIC is going to change slightly. There will probably be a new system to appoint its chair (since 2021, the law has been that the finance minister can appoint a deputy finance minister to the position of PIC chair). And I think there will be more demands for more transparency. We should all know how the PIC makes its decisions in the unlisted space. There are many advantages to being a colossus; you can take a lot of pain and keep trucking. But you are impossible to hide. And so we will always want to know what is going on behind the scenes. DM
TimesLIVE
24-06-2025
- Business
- TimesLIVE
PIC partners with UK finance institution on African infrastructure
SA's state-owned Public Investment Corporation (PIC) and UK development financier British International Investment (BII) have formed a partnership to boost investment in African infrastructure, the organisations said. Financial terms were not disclosed. The partnership will mobilise private capital in Africa at scale to expand climate funding and boost the rise of private credit as a new asset class, said Leslie Maasdorp, CEO of BII, the UK government's development finance institution. Under the memorandum of understanding, PIC, Africa's biggest fund manager, and BII will create a framework to jointly explore co-investment opportunities across Africa. Priorities include small and medium enterprise financing, financial inclusion, green economy transitions and infrastructure in countries in southern, eastern and western Africa, the PIC said. Investment opportunities will be considered on a case-by-case basis, a PIC spokesperson said in an email. Africa faces an annual infrastructure and climate finance gap of more than $100bn (R1.8-trillion), according to the African Development Bank. Many bilateral donors are pulling back due to domestic fiscal and political pressures. The PIC manages R3-trillion in assets. BII has an Africa portfolio of $5.6bn (R99bn).
TimesLIVE
10-06-2025
- Business
- TimesLIVE
Mandate, not mismanagement: PIC clarifies position on unlisted investments and Daybreak
There are ongoing allegations that the Public Investment Corporation (PIC) has 'squandered R33bn' of pensioners' money on politically motivated investments. The PIC strongly denies these claims, arguing they misrepresent and oversimplify a complex investment process aimed at identifying opportunities in a broad market, where outcomes cannot be guaranteed. While acknowledging the inherent risks associated with these investments, the PIC asserts that it remains committed to seeking opportunities with the highest likelihood of positive results. This issue has come to public attention recently due to the challenges faced by Daybreak Foods, which the PIC acquired in 2015 for R1.2bn. This investment was intended to achieve long-term sustainable returns while contributing to food security in the country and supporting economic transformation. The PIC emphasises that the claims against it oversimplify the complexities of long-term developmental investing and the inherent risks that come with it. The PIC manages more than R3-trillion in assets, with about R2.5-trillion allocated for public servants through the Government Employees Pension Fund (GEPF). The remainder of the assets represents clients whose beneficiaries are contributing workers across the country. The PIC acknowledges the seriousness of its responsibilities and operates under a clear mandate that goes beyond simply maximising financial returns. This mandate includes making investments that foster economic development, industrialisation, job creation and broader transformation in South Africa. Unlisted investments, such as Daybreak Foods, play a crucial role in our developmental mandate. Though there are operational and governance challenges at Daybreak Foods — currently undergoing business rescue — the PIC believes the criticism it has received presents an incomplete and misleading view of the situation. The PIC asserts that the ongoing business rescue process should not be seen as a sign of impending liquidation or a total loss. Rather, they view it as a strategic and legally sound method to stabilise the company, preserve more than 3,000 jobs and ultimately recover value for its clients, primarily government pensioners. Daybreak Foods supplies 7% of South Africa's poultry, making its ongoing operations essential for national food security.
TimesLIVE
10-06-2025
- Business
- TimesLIVE
Mandate, not mismanagement: PIC clarifies position on unlisted investments and Daybreak Foods
There are ongoing allegations that the Public Investment Corporation (PIC) has 'squandered R33bn' of pensioners' money on politically motivated investments. The PIC strongly denies these claims, arguing they misrepresent and oversimplify a complex investment process aimed at identifying opportunities in a broad market, where outcomes cannot be guaranteed. While acknowledging the inherent risks associated with these investments, the PIC asserts that it remains committed to seeking opportunities with the highest likelihood of positive results. This issue has come to public attention recently due to the challenges faced by Daybreak Foods, which the PIC acquired in 2015 for R1.2bn. This investment was intended to achieve long-term sustainable returns while contributing to food security in the country and supporting economic transformation. The PIC emphasises that the claims against it oversimplify the complexities of long-term developmental investing and the inherent risks that come with it. The PIC manages more than R3-trillion in assets, with about R2.5-trillion allocated for public servants through the Government Employees Pension Fund (GEPF). The remainder of the assets represents clients whose beneficiaries are contributing workers across the country. The PIC acknowledges the seriousness of its responsibilities and operates under a clear mandate that goes beyond simply maximising financial returns. This mandate includes making investments that foster economic development, industrialisation, job creation and broader transformation in South Africa. Unlisted investments, such as Daybreak Foods, play a crucial role in our developmental mandate. Though there are operational and governance challenges at Daybreak Foods — currently undergoing business rescue — the PIC believes the criticism it has received presents an incomplete and misleading view of the situation. The PIC asserts that the ongoing business rescue process should not be seen as a sign of impending liquidation or a total loss. Rather, they view it as a strategic and legally sound method to stabilise the company, preserve more than 3,000 jobs and ultimately recover value for its clients, primarily government pensioners. Daybreak Foods supplies 7% of South Africa's poultry, making its ongoing operations essential for national food security.
The Herald
03-05-2025
- Business
- The Herald
Plans for radical cuts in Trump's budget
US President Donald Trump's administration on Friday proposed a $163bn (R3-trillion) cut to federal spending next year, which would eliminate more than a fifth of the non-military spending, excluding mandatory benefit programmes. The proposed budget would raise defence spending 13% and homeland security spending nearly 65% from 2025 enacted levels. Non-defence discretionary spending would be cut 23% to the lowest level since 2017, the White House office of management and budget (OMB) said in a statement. The so-called skinny budget is an outline of administration priorities that will give Republican appropriators in Congress a blueprint to begin crafting spending bills. As Trump's first budget since reclaiming office, it sets out to make good on his promises to boost spending on the armed forces and border security, while slashing the federal bureaucracy. 'At this critical moment, we need a historic budget — one that ends the funding of our decline, puts Americans first, and delivers unprecedented support to our military and homeland security,' OMB director Russ Vought said in the statement. The federal government has a growing $36-trillion debt pile, and some fiscal conservatives and budget experts worry Trump's tax-cut bill will add to it without sufficient spending cuts. Trump is pushing the Republican-controlled Congress to extend the 2017 tax cuts that were his major legislative achievement in his first term, which non-partisan forecasters say could add $5-trillion to the nation's debt. The annual White House budget request includes economic forecasts, as well as detailed proposals about how much money should be spent by every government agency for the fiscal year that starts on October 1. Outlays in fiscal 2024 amounted to $6.8-trillion, according to the congressional budget office. Legislators often make substantial changes in the White House's budget request. But Trump commands unusual sway over this Republican-controlled Congress. Republicans hope to enact the tax cut bill by July 4, and are working to bridge internal divisions to pay for it. They may have to factor in growing stress in the US economy from Trump's tariff hikes. The proposal furthers Trump's promise to greatly diminish the US department of education, OMB said, while preserving funding for low-income families' children. 'Trump's days of pretending to be a populist are over,' said Sen Chuck Schumer, the Senate's top Democrat. 'His policies are nothing short of an all-out assault on hardworking Americans. As he guts health care, slashes education and hollows out programmes families rely on, he's bankrolling tax breaks for billionaires ...' The budget calls for an additional $500m in discretionary spending to bolster border security and aid Trump's push for mass deportations, as well as $766m to procure border security technology funding. Reuters
