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The Public Investment Corporation: What You Need To Know

The Public Investment Corporation Limited (PIC) is one of the largest investment managers on the African continent. The PIC’s investments contribute about 12.5% towards the market capitalisation of the JSE Limited, and the corporation manages an asset base of over R1.928 trillion and growing.

Like many other asset managers, the PIC is a registered financial services provider – but this one is fully owned by the South African Government. The company invests funds on behalf of public sector entities, based on investment mandates set by each of these clients and approved by the Financial Services Board (FSB). It’s sheer size, government ownership and critical mandate make it an influential (and potentially vulnerable) market player.

A brief background

Established back in 1911 as the Public Debt Commissioners, the organisation’s mandate evolved between 1962 and 1984 from a debt-management focus (managing trust funds placed in the care of the government), to a focus on investing funds on behalf of the public sector.

On 1 April 2005, the Public Debt Commissioners became the Public Investment Corporation, in accordance with the Public Investment Corporation Act of 2004. Corporatisation has allowed the PIC to mirror private sector investment managers’ structure of  investment activities and operations, and the company benchmarks its investment performance against market-driven indices.

The PIC is a long-term investor. The funds invested in are mainly pension, provident, social security, and guardian funds, and investments are diversified across Listed Equities, Capital Markets, Money Markets, Property and their Isibaya Fund (which promotes investments that have a social impact and contribute to South Africa’s development goals).

Top 5 clients

The PIC’s top five clients are the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF), the Associated Institutions Pension Fund (AIPF), the Compensation Commissioner: Pension Fund (CCPF), and the Compensation Commissioner Fund (CC).


The assets of the GEPF make up the vast majority of the total assets under management, at 87.72%. About 80% of the equities portfolio is managed passively to allow the GEPF to benefit from the significant saving in management fees, without compromising on performance. External managers manage the remaining 20% of the fund. The PIC has invested 5% in offshore equities, while  the remaining 5% allotment will be invested in the rest of the African continent. 

The PIC in the media

The PIC has been in the media a few occasions in the last year for various reasons, including allegations that corrupt politicians may be pressuring the corporation to serve their own interests.

PIC hit by cabinet reshuffles

The PIC reported that it lost R99 billion on the markets over two days in December 2016 after the finance minister, Nhlanhla Nene, was fired. The Unemployment Insurance Fund lost R7 billion and the Compensation Fund R3 billion in the 48 hours after Nene was fired.  Any losses from the cabinet reshuffles in March and October 2017 have yet to be reported.


In April, there were rumours that senior members of the ANC were putting pressure on PIC chief executive Daniel Matjila and other senior managers to sell the company’s stake in Vodacom to one of a number of competing BEE consortia, with former Vodacom executive Romeo Kumalo as a key player. Matjila fully rejected these claims, explaining that the PIC’s investment decisions follow “an established process and are underpinned by clients’ investment mandate.”


The Public Investment Corporation is currently the largest shareholder in Lonmin, with a 30% stake. In May, the platinum producer was in financial difficulties thanks to a downturn in commodity prices, and there was speculation that the PIC could be called upon to rescue the company – again. Back in 2015, Lonmin’s rights offer to raise cash was underwritten by the PIC, and was undersubscribed, which meant that the PIC had to take up the unsold shares. Another less-than-successful rights offer underwritten by the PIC could have meant it became the majority shareholder – resulting in a state-owned mining company running at a loss. This is the danger of investment organisations rooted in the public sector – even corporatised ones – as they can be forced into a bailout situation to protect jobs.

Corruption within the PIC?

EFF commander-in-chief Julius Malema alleged in September that the chairperson of the PIC, Deputy Finance Minister Sifiso Buthelezi, was using PIC deputy chairman Xolani Mkhwanazi to raid the PIC of R3 billion, to be given to an empowerment entity headed by his sister, Philisiwe Buthelezi (who is married to Arts and Culture Minister Nathi Mthethwa), and ensure that she becomes the new PIC CEO. Malema alleged that the PIC was being pressured into handing the National Empowerment Fund (NEF) R3 billion without following proper processes. There has been no update from the media since the allegations were made, besides news that Malema had his email account shut down for a period of time.

Smear campaign against CEO?

PIC CEO Daniel Matjila reported in September that forces opposed to him were looking to get their hands on the PIC’s R1.9 trillion, telling the Sunday Times that several requests for transactions that did not meet the PIC’s investment criteria had been made by “politically connected people”. He also alluded to a plot to oust him from his post. However, Matjila later rejected the article, calling it “distasteful, inaccurate and designed to drive a wedge between myself and the minister”. The Sunday Times published transcripts of the article, however, which indicate that it was indeed accurate and that Matjila may in fact be the victim of a smear campaign.

Matjila was also called to attend a special board meeting to answer claims that he had used PIC money to fund an alleged girlfriend’s business, but was cleared of any wrongdoing after an internal investigation led by the PIC’s audit unit.

The reason for the smear campaign seems to be the PIC’s refusal to bail out SAA. Matjila confirmed that SAA had approached the PIC for a loan of R6-billion, but the PIC’s due diligence on SAA had led it to decide not to invest in the airline, due to it failing the minimum requirements of its investment mandate.

PIC ordered to conduct an internal forensic investigation

In October, Finance minister Malusi Gigaba requested that the PIC conduct a forensic investigation into concerns of irregularities at the corporation, as well as provide a list of all the investments it has made, and their beneficiaries. Gigaba intends to make this list public, to try to address the “politicising” of the corporation.


The Public Investment Corporation in itself seems to be a robust institution with clear mandates and accountability. But if the media reports are anything to go by, the institution is increasingly under threat of political pressure to use the vast amounts of money it is responsible for, in less-than-responsible ways.

Central to public concern is the pressure to rescue ailing state-owned entities, and its refusal to do so has led opponents to use various (often personal) means to discredit the organisation. Trade unions are fiercely opposed to the use of the PIC to bailout failing parastatals, and have vowed to take serious action should this take place. However, the PIC’s take up of bonds issued by parastatals such as Eskom, Transnet and Sanral may have already over-exposed the corporation to these state-owned enterprises.



Natalie Mayer

Natalie Mayer is an independent writer and editor with 12 years’ experience. She has a B.Com in Economics (UCT) and a Master’s in Sustainable Development (University of Stellenbosch) and has worked for a number of high-profile clients, such as the United Nations Educational, Scientific and Cultural Organization (UNESCO), Nedbank, the Sustainability Institute, Counterpoint Asset Management, Pearson Education, and of course, Sharenet – to name a few. Natalie has written and edited research papers, textbooks, print and online articles, and website content on a vast array of topics, including finance and money matters, education, property, social and environmental issues. She is passionate about communication that meets the needs of the audience, and her particular strength is to bring clarity to text.

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