The Public Investment Corporation, a South African government-owned financial services provider, plans to invest R2.5 billion on the African continent during the 2014/15 financial year.
“The commitment to invest in the rest of the continent is born out of a realisation that our collective success is premised on economic integration,” says Nhlanhla Nene, chairman of PIC in the corporation's annual report tabled in Parliament on 2 October 2014.
Nene says the PIC has established two funds: the Africa Developmental Investments and Private Equity Africa, which will assist the corporation to discharge its mandate to invest on the rest of the continent.
The continent will soon be the second fastest growing region in the world after Asia. For this reason, the PIC will, in the new financial year, also focus on developmental investments in Africa with a minimum commitment of approximately R5,485million for developmental investments in Africa and a further R548million towards private equity in Africa,” says Nene, adding that the African story presents the PIC with unique investment opportunities.
Acting PIC CEO, Matshepo More, says in the next financial year the PIC plans to invest “at least a further R2.5 billion in the rest of the continent”.
Investments in the rest of Africa currently represent 0.5% of the PIC's total R1.6- trillion assets under management, which grew from the previous year's R1.4-trillion.
More says the PIC is in good financial health “with its profitability at R209 million as at 31 March 2014, up from R130 million at the end of the 2013 financial year”, adding that the PIC has also set aside 1% of the profit after tax from the 2013 financial year for corporate social investment.
Established in 1911, the PIC is one of the largest investment managers in Africa, managing assets of over R1.6 trillion and still growing. Of total assets under management, 49% is invested in local equities, 32.4% in local bonds, 7% in cash and money-market instruments, 4.39% in properties and 5.36% in offshore equity and bonds.
During the 2013-14 financial year R11.4bn worth of unlisted investments were approved, of which R4.8bn has already been disbursed.
The PIC is increasingly expected by the government to contribute towards socioeconomic development. In this regard, Nene says PIC investments had created in excess of 7 805 direct and indirect jobs, and sustained 78 636 jobs.
