PIC is one of the largest investors in South African equities, with investments contributing towards approximately 12.5% of the market capitalisation of JSE Limited.
The PIC’s largest client is the Government Employees Pension Fund (GEPF).
Because of the size and scope of this fund, approximately 80% of the equities portfolio is managed internally on an enhanced index or ‘passive’ basis, which allows the GEPF to benefit from the significant saving in management fees, without compromising on performance.
External managers managed the remaining 20% of the fund, presenting the opportunity to focus on active asset management, thereby maximising shareholder returns with minimal market impact.
The current GEPF mandate prescribed that up to 10% of the equities fund can be invested outside of South Africa. Currently, PIC has invested 5% in offshore equities, while the remaining 5% allotment will be invested in the rest of the African continent to the exclusion of South Africa.
Investments in emerging markets resident in Africa will aid in diversifying the funds. It will also create a footprint for future corporate investment throughout the African continent.