PIC even stronger at 100

Public fund manager observes centenary

PIC CEO Elias Masilela
Elias Masilela
The Public Investment Corporation (PIC) is poised to position itself to remain the asset manager of choice for the official sector for the next century,” insists Elias Masilela, the chief executive of the PIC, as Africa’s biggest sovereign wealth fund celebrates 100 years since its launch.

“We look forward to the next 100 years, which will certainly surpass the previous (100 years) – intellectually, technologically, financially as well as developmentally.” He reveals that the PIC remains financially sound and has even managed to pay dividend to the government, the power behind the PIC throne.

“Marking our centenary as an organisation, the PIC can proudly state that it has grown the assets under its management to more than R1-trillion from R461.5-billion in 2005 when it was corporatised, and from £106.4-million in 1912, at the end of the first year since the corporation was established as the Public Debt Commissioners,” notes Masilela. 

The marked growth in assets under manage- ment recorded in recent years is attributable to strong economic performance experienced over the past few years and satisfactory growth in equity during the same period. 

At 5.6% annual growth in the years 2006 and 2007, the PIC recorded a peak in eco- nomic performance. Subsequent to this peak, global economic growth decelerated as the world financial crisis unfolded, leading to the deepest global downturn in recent history. 

Though the economy is still below the pre- crisis level, it has somewhat recovered and is expected to hover around the 3% level. 

Given the possibility of yet another global economic downturn, which economists say could be unleashed by the current eurozone debt crises, it seems Africa’s biggest sov- ereign wealth fund could be dealing with other challenges. 

Nhlanhla Nene, Deputy Minister of Finance and chairperson of the PIC, says although the immediate past period has been character- ised by doubt as to whether the economy is approaching a phase of economic recovery or not, all indications show South Africa may be entering a new upward economic cycle, albeit soft. 

“This new cycle brings new challenges ... for the PIC,” he says, without detailing the nature of the challenges. 

But the most obvious problem the PIC faces is whether the global financial crisis can return.
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