Illustrative image | Daybreak Foods in Delmas. (Photo: Felix Dlangamandla) | Public Investment Corporation. (Photo: Guillem Sartorio / Bloomberg via Getty Images) | The Colossus. (Photo: Wikipedia) 
If it is true that compound interest is the “eighth wonder of the world”, then the Public Investment Corporation (PIC) must be its colossus.
It is so staggeringly big that it almost defies comprehension. The PIC currently has more than R3-trillion in assets. And it controls about 10% of the JSE.
The scale of it is so big that its investment decisions could not just make or break companies, they might even make or break entire industries in South Africa.
It makes the proposed Transformation Fund that would invest R100-billion look like a tiddler by comparison. It is just that big.
There are important reasons it got so big, but one of them must be its age.
It was created in 1911. That’s just one year after South Africa was formed as a nation state in a colonial project.
Like Warren Buffett’s investing career, the PIC is a really good example of how time in the market is such an important factor.
At the same time, of course, as the number of government workers has increased (leading to many, many bitter fights), so has the money it has to manage.
The Government Employees’ Pension Fund is its main client – millions go from government employee salaries into the fund every month.
Considering how much money we are talking about, it is quite strange that we don’t talk about it more.
One of the reasons for that is so many of its investments are in listed entities. Basically it is putting money into companies listed on the JSE. And that means we can all see whether or not it’s making good decisions.
This is a kind of forced transparency (in its 2024 annual financial statements it flags “transparency” as its first pillar of governance”). And by and large, it works.
The problems come in, obviously, in its unlisted investments. This is where it makes decisions that we cannot see so easily.
And I suspect we are going to see a lot more attention on this soon.
On Monday, News24 published an important story saying that the acting head of the manager’s unlisted investments unit, Thabiso Moshikara, is being accused of trying to get a R3-million bribe from someone whose company is being funded by the PIC.
The person making the claim, Ralebala Mampeule, even claims Moshikara came to his house with “unidentified males”.
This must have come as a huge shock to the PIC and they will now have to investigate thoroughly.
The problem is that it could take quite a while to know for sure what happened. Unfortunately, we now live in a society where it’s entirely possible that someone offered Moshikara money for his influence, and when he refused, decided to simply make something up to get rid of him.
Or it could all be true.
At the same time, the PIC has recently been under fire over the Daybreak Farms fiasco.
There it was quite clear that some of the directors and managers were just extracting money from a failing enterprise.
While workers were protesting because they had not been paid and chickens were suffering because they were not being fed, the chair, Bojane Segooa, hung on until the last minute. The moment she received a payment of R625,000, she resigned.
Daybreak is wholly owned by the PIC.
Sunday Times journalist Sabelo Skiti had been warning us for years and years that this would happen at Daybreak. And his reporting and warnings were ignored by the PIC.
This has infuriated Finance Minister Enoch Godongwana to the point where he has instituted an inquiry into the unlisted fund.
I’ve never understood why an institution as massive as the PIC would not act when someone like Skiti reports on Daybreak in the way he did. It surely has the resources to monitor its unlisted investments.
It is negligence that borders on the criminal to allow this to happen.
I would think that its main customers, government workers, would be the first to shout and scream when this happens. It is their money that is going up in smoke.
But they don’t, because they’re going to be fine.
The pensions they receive are a defined benefit, meaning they’ll receive the same amount of money no matter what happens to the PIC’s investments.
This is probably a very good thing. Workers should not suffer in their old age because, for example, Markus Jooste took everyone for a ride at Steinhoff.
But it does mean that perhaps, just perhaps, someone gets to play with a huge amount of money without a huge amount of attention.
It does look like the PIC is going to change slightly. There will probably be a new system to appoint its chair (since 2021, the law has been that the finance minister can appoint a deputy finance minister to the position of PIC chair).
And I think there will be more demands for more transparency. We should all know how the PIC makes its decisions in the unlisted space.
There are many advantages to being a colossus; you can take a lot of pain and keep trucking.
But you are impossible to hide. And so we will always want to know what is going on behind the scenes. DM