Senior PIC staff accuse managers of failing to renew GEPF mandate, causing a 'crisis'

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  • Staff at the PIC's Isibaya Fund have submitted a list of complaints including a failure to renew a mandate with the state-owned asset manager's largest client - the  Government Employees' Pension Fund
  • A halt to the PIC’s investments in unlisted assets would hamper its aim to play a developmental role promoting the growth of black-owned businesses and investing in projects with a social impact.
  • This comes as the PIC struggles to recover from the outcome of a judicial inquiry, which last year found that it made questionable investment decisions over many years


Senior employees at a unit of the Public Investment Corporation (PIC) have accused executives at the continent’s biggest fund manager of causing an "existential crisis" after a series of scandals over the past few years.

Staff at the Isibaya Fund, which oversees unlisted assets at the $136 billion (nearly R2 trillion) PIC, submitted a list of complaints including a failure to renew a mandate with the division’s biggest client and allegations of general poor management, according to a nine-page letter to the company’s investment committee seen by Bloomberg.

A 2016 agreement with the Government Employees' Pension Fund (GEPF), which manages South African state-worker retirement funds, is being allowed to expire, wrote the authors of the message, dated 7 May and confirmed by the PIC.

"An oversight of this magnitude and severe impact thereof, which places the PIC in a precarious position, ordinarily would require accountability," the Isibaya workers said in the letter. "We are unaware of any action taken against the custodian of this issue."

A halt to the PIC’s investments in unlisted assets would hamper its aim to play a developmental role promoting the growth of Black-owned businesses in South Africa and investing in projects with a social impact. The issue also comes as the PIC struggles to recover from the outcome of a judicial inquiry, which last year found management had flouted internal procedures and made questionable investment decisions over many years.

The Isibaya division, which doesn’t include holdings in unlisted property, accounts for about 4.3% of PIC assets. The team of about 100 people won’t be able to complete ongoing investments or embark on new ones until a new deal with the GEPF is negotiated, said a person familiar with the situation, who requested anonymity. As much as about a fifth of the PIC’s assets can be allocated to unlisted investments, under the money managers’ guidelines, the person said.

The matter is "being attended to internally," the PIC said in a response to questions. The GEPF said it doesn’t "discuss operational matters between itself and the PIC in the public domain."

Manager behaviour

As well as calling for the mandate issue to be resolved, the Isibaya team has demanded a meeting with the investment committee to discuss their complaints about the division’s acting head, Lusanda Kali.

Kali implemented a restructuring of the division within three days of her appointment on March 27 last year, according to the letter, breaching the employment contracts of some members of the group. She also manages the team in an "oppressive, antagonistic and retributive way," the staff said. They also said that important staff had resigned, others had been booked off sick and more were looking to leave as a result of her management style.

When Bloomberg called the PIC and asked to be put through to Kali the calls were not answered.

The Isibaya Fund, founded in 1995, "invests in commercially viable African projects that have a strong, positive developmental impact and transformation" ranging from renewable energy to healthcare, according to the PIC’s website.

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