How does the PIC's loss on Isibaya Fund investments affect the South African government?
PIC losses on Isibaya Fund investments expose the government to significant financial risk. The South African government faces potential financial strain due to the losses incurred by the PIC on the Isibaya Fund. The PIC, a state-owned asset manager, manages the retirement savings of South African public servants through the Isibaya Fund. The fund carries the direct risk of the investments, and any shortfall ultimately falls on the state budget that backs it.
- Effect
- Strong negative
- How direct
- 2 steps, all reported
- When
- Over the long term
- The story
- Gone quiet
How it reaches government
-
The Public Investment Corporation lost R18.2bn, equivalent to about US$1.1bn, across 23 unlisted investments made through its Isibaya Fund, according to a parliamentary reply. The Isibaya Fund, which invests in private and developmental deals, was valued at R75.15bn in the 2022 financial year, declining 7.79% after impairments were recorded that year.
The full event1independent outlet -
The Public Investment Corporation lost R18.2bn (about US$1.1bn) on 23 unlisted investments in the Isibaya Fund. These investments recorded an internal rate of return of minus 100%, meaning the money was lost in full.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- riotimesonline.com Sep 21
-
South African state-owned asset management firm
Everything about Public Investment Corporation -
The Isibaya Fund holds the retirement savings of South African public servants. The reports state that a shortfall at the fund would ultimately fall on those members or on the state budget that backs it.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- riotimesonline.com Sep 21
-
system or group of people governing an organized community, often a state
Everything about government
Tap any step to see the evidence behind it.
The facts so far
As reported. Each one links to where it comes from.
- The PIC lost R18.2bn (about US$1.1bn) on unlisted investments in the Isibaya Fund.riotimesonline.com
- The losses were spread across 23 companies, with the fund having 15 investments showing a minus 100% return.riotimesonline.com
- The Isibaya Fund holds the retirement savings of South African public servants.riotimesonline.com
- The PIC manages the fund, which is the unlisted-investment arm of the company.riotimesonline.com
Why it matters
The PIC is a state-owned entity whose financial health is intrinsically linked to the government's fiscal stability. The losses are not merely operational; they represent a direct financial risk to the state budget, which ultimately guarantees the fund.
This situation draws attention to the governance of state-owned assets and the risks associated with high exposure to unlisted, private ventures. The question remains how the government will account for this risk and ensure the long-term viability of the pension fund.
What we don't know yet
- How will the government account for the ongoing risk associated with the Isibaya Fund?
- What measures are being taken to mitigate future exposure to high-risk unlisted investments?
What would change this answer
Who else could feel it
Other paths from the same event.
Reporting
- riotimesonline.comSep 21
Keep going
Brind's analysis is written by AI from the reporting linked above and can be wrong. It explains possible effects; it is not investment advice.