Government pension fund should invest more in unlisted assets, says head

Government Employee Pension Fund Principal Executive Officer Abel Sithole told reporters on Thursday that the fund, its members and the economy could enjoy untold benefits if the fund broadened its investment portfolio’s exposure to unlisted investments.

The GEPF is Africa’s largest pension fund, with over 1.2m active members and more than 400 000 pensioners and beneficiaries. The GEPF's investment portfolio currently stands at R1.8trn.

The fallout from PIC investments gone wrong, including AYO Technologies and Steinhoff International Holdings, has caused anxieties about Africa’s largest asset manager and the GEPF, which invests through the PIC.

The GEPF currently has R50.6bn invested in unlisted domestic equities, compared to R970bn in listed equities. The recent investment storms prompted the establishment of a commission of inquiry into the PIC to investigate the circumstances surrounding the ill-fated investments.

"Whatever the commission finds, I hope that we do not do away with the investment portfolio and that we, in fact, do more and do so correctly, because that would be of immense advantage to the members of the fund and the economy," Sithole said.

Sithole told reporters in Cape Town on Thursday that there was no prescription to how the GEPF should invest, other than that it must be done in consultation with the employer, namely the government.

"From a strategic point of view, investing more in unlisted [assets] makes sense. It would make sense to incorporate unlisted [investments] and increase the fund’s exposure in that space.

"That does not prescribe where, how and to whom," said Sithole.

Sithole said the increasing its investment portfolio into unlisted assets would open the GEPF up to continue paying generous benefits to members and allow it to boost the economy by investing in small and medium enterprises.

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