Public servants’ pension money — the R88bn question behind the PIC’s Isibaya portfolio

The Public Investment Corporation’s Isibaya portfolio, which invests money on behalf of the Government Employees’ Pension Fund (GEPF), has delivered an internal rate of return of 4.25% from March 2006, according to a written parliamentary reply by Finance Minister Enoch Godongwana.

The figure was disclosed in response to a question from DA MP Andrew Bateman, who asked for the rate of return on the Isibaya investments listed in a previous annexure. The minister said the 4.25% internal rate of return, or IRR, covers the entire Isibaya portfolio for investments conducted on behalf of the GEPF since 1 March 2006, and includes transactions that have already been fully realised.

A separate reply, also to Bateman, provided an updated schedule of Isibaya’s unlisted investments. The annexure shows a wide spread of investments across infrastructure, empowerment vehicles, financial services, media, property, agriculture, housing, energy and private equity funds.

Pension puzzle

The numbers show a portfolio with some big winners, but also some heavy bruises.

Committed capital is the amount promised or allocated to investments; invested capital is the portion actually paid into them. According to the annexure, the Isibaya investments listed had committed capital of about R94-billion, with about R88-billion invested. The total value reflected in the schedule, comprising proceeds already received and current market value, amounts to about R98.8-billion. That implies a money multiple of about 1.12 times the amount invested, before getting into the more complicated questions of timing, risk and opportunity cost.

In plain English, the portfolio appears to have turned R88-billion invested into about R98.8-billion in value over a long period. That is not a disaster in absolute rand terms, but, over almost 20 years, it is not exactly a champagne cork moment either.

For pension fund members, a 4.25% annualised return over nearly 20 years raises uncomfortable questions about whether enough value has been created for public servants whose retirement savings are ultimately exposed to these decisions.

The Isibaya portfolio has never been a plain vanilla investment bucket. It is meant to support developmental and socially useful investments, including black economic empowerment, infrastructure, job creation and transformation. That makes direct comparison with listed equities imperfect. A road, a housing fund or an empowerment transaction may be judged partly on economic impact, not only on investment return.

But the counterargument is just as important: developmental intent does not make pension money any less real. Every rand invested still belongs to workers and retirees.

The winners

Siyanda Resources is the standout performer in the disclosed Isibaya schedule: an investment of about R212-million has produced proceeds and current value of roughly R2.45-billion, a money multiple of 11.6 times and an IRR of 30%.

SA Home Loans is also a significant positive contributor, although the exposure is split across three entries. The strongest SA Home Loans line shows R929-million invested and a total value of just over R3-billion, while the combined SA Home Loans exposure reflects about R10.86-billion invested and R18.46-billion in proceeds plus market value.

But there are also deep losses.

The losers

On the other side of the ledger, AfriSam is the whale-shaped bruise: more than R11-billion invested, with only R807-million reflected in proceeds and no remaining market value.

Independent Media, the trading name of Independent News and Media South Africa, is shown as a total wipeout in the parliamentary schedule, with R888-million invested, no proceeds, no market value and a -100% IRR. That amount appears to reflect the PIC/GEPF’s combined exposure to the Independent Media/Sekunjalo transaction, including equity, loans and preference shares.

The GEPF annual report separately records impairments on Independent News and Media SA of R117.9-million in 2025, after R177.3-million in 2024.

VIA Bounty is another zero-value entry, with R1.37-billion invested and no proceeds or market value, while Edcon shows R1.2-billion invested and a total value of about R294-million, a money multiple of just 0.24 times.

The annexure also lists a number of investments with negative IRRs or zero market value. That does not automatically mean every investment has failed, because some may have generated proceeds, been restructured or held for long-term developmental reasons. Still, the overall picture is not particularly reassuring.

The disclosure is important because the PIC manages public sector pension money at a vast scale, and Isibaya has long attracted scrutiny because its investments are unlisted, harder to value and less visible than shares traded on the JSE.

Although the parliamentary replies go some way towards shining a light on this, they do not explain the investment rationale for each deal, the current recovery prospects for impaired investments, or whether any governance lessons have been drawn from the worst performers.

But they do provide a clearer window into a portfolio where the wins are real, the losses are large, and the average return leaves pension fund members entitled to ask whether the risk was worth it. DM