PIC turns 100 years

The Public Investment Corporation Celebrates 100 Years Of Excellence

The 2nd of May 2011 marks an important turning point in the history of the Public Investment Corporation. This day marks its pinnacle of success by reaching a centenary.

In our long history, we seldom made a fuss about our achievements. This is simply because we have been and continue to be driven purely by an attitude to serve.

Our existence as a sound public entity as well as a beacon for the industry and economy is certainly worth celebrating. We have been managing public sector funds since 1911, and we believe that our 100th birthday is reason to proudly celebrate with the whole of South Africa and partners across the globe.

It is also the perfect time to voice our commitment to meeting and exceeding our clients’ investment objectives, our commitment to stakeholders, and our commitment to creating a working environment that will ensure the best skills are attracted and retained – with the ultimate objective of effectively supporting South Africa’s economic development.

More significantly, this centenary uniquely coincides with PIC firmly reaching a Trillion Rands in assets under management. This is no small achievement.

We would like to share this magnificent result with all economic players who have made it possible. In particular we would like to celebrate with our clients who have trusted us with their nest eggs throughout the long and hopeful years.   

Together we have delivered.

South Africans of today, as well as future generations, will be boldly proud of this achievement as it directly contributes to the improvement of their well- being.

In celebrating a hundred years of managing public sector funds, the following milestones stand out when looking at a century of the evolution of money and public asset management.

1911 – 1984 – First Phase

The Public Debt Commissioners (PDC) was established with a mandate to control investments on behalf of the state sector. In the early stages of its development, the PDC invested trust funds of the government and the South African Railways and Harbours, but by 1924 this included the funds of the provincial administrators.

By the mid-20s, the PDC had extended its power, acquiring more and more responsibility of granting loans to local governments. It was also allowed to establish the Government Sinking Fund which provided for “unproductive debt” to be redeemed over 40 years (SA Financial Sector Forum 2001). The PDC created a pool of government money mostly from pension funds, which allowed the government to borrow from itself.

1984 – 2004 – Second Phase

The passage of the Public Investment Commissioners Act (No. 45 of 1984) boosted the early expansion of the PIC and allowed for the appointment of commissioners (then called Public Investment Commissioners) with the power to invest funds on behalf of public bodies.

In 1995 the Public Investment Commissioners announced the formation of the Isibaya Fund, made up of a portion of GEPF’s investments, which are set aside to invest in Environmental, Social and Governance (ESG) issues. These investments, managed through the Isibaya Fund, are targeted at economic growth through infrastructural investments in Africa, and aim to deliver risk adjusted returns while enhancing social outcomes.

2004 – 2011 – Third Phase

This phase which is still pretty much in motion was characterised by the South African Parliament passing the Public Investment Corporation Act in 2004, and the memorandum on the object of the Public Investment Corporation Bill 2001 together which legally formalised the Public Investment Commissioners as asset managers.

The concept of a separate body responsible for the investment of trusts and other government deposits, the PIC, has its origins in the Public Debt Commissioners Act, 1911 (Act 18 of 1911) which came into operation on 2 May 1911; this Act was later replaced by the Public Debt Commissioners Act, 1969 (Act 2 of 1969).  The successor of the Public Debt Commissioners was the Public Investment Commissioners which was governed by the Public Investment Commissioners Act, 1984 (Act 45 of 1984).  In 2005 the PIC succeeded the Public Investment Commissioners.

These days the Public Investment Corporation operates very much like a privately-owned asset management firm, but it is still wholly owned by the state who is the sole shareholder, with the Minister of Finance as its representative. 

The Public Investment Corporation is a world class asset management company, and it boasts a 100-year reputation of delivering excellent results.

We look forward to the next 100 years which will certainly surpass the previous, intellectually, technologically, financially as well as developmentally.

South Africa is implored to celebrate with us!

PIC CEO

Elias Masilela