This forms part of GEPF’s long-term developmental investment strategy whereby 5 per cent (approximately R60-billion) of its total assets is allocated for investment in commercially viable South African-based projects that will have positive, long-term impacts on development, in addition to providing the financial return expected by the Board.
John Oliphant, GEPF Principal Officer said the sustainability of the GEPF investment portfolio is intrinsically linked to the growth of the SA economy. “With more than R1trillion assets under management, representing a third of the SA GDP, we think it is prudent to invest in projects that contribute to economic growth and job creation. This, we believe, is in the best interest of our investment portfolio in the long term.”
GEPF is the largest pension fund in Africa with more than 1.2-million members, 360 000 pensioners and more than R1-trillion worth of assets under management.
GEPF and PIC have signed private placement memoranda (PPM) that will ensure guided investment processes in the different investment funds.
To date commitments to the following three Funds have been approved:
• Environmental Sustainability Fund —R5-billion;
• Priority Sectors Investment Fund —R3-billion; and
• South African Private Equity Fund —R5-billion.
The Isibaya division within the PIC will manage the funds.
The Environmental Sustainability Fund will invest in energy renewables and efficiency, energy storage, clean energy and recycling projects. The Fund is expected to generate 500MW of new, renewable energy and 300-million litres of biofuel per annum. It is estimated that the Fund will create approximately 3 000 jobs during and after the construction of renewable energy plants and recycling centres.
The Priority Sectors Investment Fund will focus on projects that will have substantial and positive impact on areas such as job creation and food security. These include manufacturing, agriculture, tourism, mining beneficiation and agro-processing. This Fund aims to create more than 3 000 jobs, of which 25 per cent will be in rural areas.
The SA Private Equity Fund will concentrate on medium-to-large capital buyouts as well as mergers and acquisitions. The Fund will seek to achieve broad-based black economic empowerment (BBBEE) to levels 1 and 3 over three to eight years measured over the 10-year span of the portfolio.
It is expected that commitments will be made to two additional Funds, the Economic Infrastructure and Africa Private Equity during the year.