After a string of controversies in recent years, senior staff at a subsidiary of South Africa’s Public Investment Corp. have accused executives at the continent’s largest asset manager of sparking an “existential problem.”
According to a nine-page letter to the company’s investment committee seen by Bloomberg, staff at the Isibaya Fund, which manages unlisted funds at the $136 billion PIC, sent a series of grievances, including a refusal to renew a mandate with the division’s biggest customer and claims of general bad management.
The writers of the letter, dated May 7 and supported by the PIC, wrote that a 2016 deal with the Government Employees Pension System, which oversees South African state-worker retirement funds, is being permitted to expire.
The Isibaya staff wrote in the letter that “an error of this nature and extreme effect, which puts the PIC in a vulnerable situation, normally will entail accountability.” “We are not informed of any legal proceedings brought against the issue’s custodian.”
The PIC’s goal of playing a transformative role in South Africa by fostering the growth of Black-owned companies and engaging in ventures with a social effect would be hampered if its investments in unlisted properties were halted. The problem arises when the PIC tries to rebound from the findings of a judicial investigation last year, which concluded that management has broken internal protocols and taken poor investment choices over a long period.
The Isibaya division accounts for around 4.3 percent of PIC properties, except unlisted property holdings. According to a source familiar with the situation, who demanded anonymity, the team of around 100 people won’t be able to complete existing investments or start new ones before a new contract with the GEPF is negotiated. According to the money managers’ rules, up to a quarter of the PIC’s funds will be transferred to unlisted portfolios.
In answer to queries, the PIC said that the matter is “being addressed internally.” According to the GEPF, it should not “discuss organizational issues between itself and the PIC in the open domain.”
Managerial Styles
The Isibaya team has requested a meeting with the investment committee to address their concerns about the division’s acting head, Lusanda Kali, in addition to resolving the mandate matter.
According to the letter, Kali restructured the division three days after her appointment on March 27 last year, infringing on the work contracts of several members of the party. According to the workers, she also runs the squad in an “oppressive, antagonistic, and retributive” manner. They also said that as a result of her management style, key employees had left, some had been booked off sick, and others were planning to quit.
Bloomberg called the PIC and demanded to speak with Kali, but the calls were not returned.
According to the PIC’s website, the Isibaya Fund “invests in economically feasible African ventures that have a solid, constructive transformative effect and transition,” ranging from green energy to healthcare.
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