The Financial Sector Conduct Authority, a body that I also have to give stuff to and report to, has started investigating the Public Investment Corporation. There are a few articles in the news about this.
The PIC is a state-owned investment organisation. It manages a lot of money, more than any other asset manager in the country, made up of public servant’s pension funds.
In short, the PIC has made some poor investment decisions and lost a couple of billion Rands, because companies invested in have collapsed and gone into business rescue. These companies are unlisted companies, meaning they are not listed on the stock market, where controls over companies are better. Investing in unlisted, private companies, has also brought the question to the FSCA as to whether individuals benefitted from some of these private investments.
The thing is, that the people running the investment side of things, the people playing the investment managers, are just human beings. There might be a committee, there might be just a small group of individuals, but they are just other human beings. This group of human beings could be different, could be another group of employed people.
Our investments are not run by some big building with a fancy name and entrance hall and waiting room with a nice coffee machine. They are run by ordinary humans who somehow got the job. I know that the managers of the funds I use for you and me, are different to the above. Why? I hear, learn and sense the ethics at play when talking to them or visiting their offices, plus these managers do not invest in private companies, plus unit trust funds have independent Trustees overseeing the compliance, plus every individual manager has to have some of his/her own money in the funds they manage. Brings ownership.
My opinion, firstly, is that investment managers of these sorts of funds should not be allowed to invest in private, unlisted companies. Subject closed. Secondly, no investment management company should be owned by a government.