Investment Information

The GEPF has the largest asset portfolio of the Public Investment Corporation (PIC), who acts as its investment portfolio manager. The investments held on behalf of the Fund represent 92,3% of the total investments under its administration.

The PIC invests in a range of five asset classes consisting of:

fixed interest instruments (e.g. long-term Government bonds)
equities (shares in listed companies)
money market (e.g. short-term interest-earning deposits)
property (commercial and residential), and
other investment instruments.

The PIC manages capital, money market and property portfolios internally, while the bulk of its equities portfolio and certain other investment classes have been outsourced to external investment portfolio managers, monitored by the PIC.

The external equity managers are Old Mutual Asset Managers (OMAM), Sanlam Investment Managers (SIM), Stanlib Asset Management, Future Growth Asset Management and Rand Merchant Bank Asset Management (RMBAM). Various other asset managers are involved with special investments and related investment products.

The Board, in consultation with the Minister of Finance, approved a revised strategic asset allocation in the 2006-07 financial year. The approved guidelines for various asset classes, which allows for a balanced portfolio, for the financial year under review are listed in the table below:

Strategic asset allocation percentages

	Proposed lower limit	Proposed strategic %	Proposed upper limit
Equities · Domestic listed · Private equity aimed at infrastructure, socially desirable investments and BEE financing (Isibaya Fund, Pan African Infrastructure Development Fund, etc)	40% 3%	51% 6%[1]	55% 9%
Bonds	25%	31%	45%
Property	0%	5%	7%
Cash/money market instruments	0%	5%	10%
Structured investment products	0%	2%	3%
Total	100.0%

Note: In terms of the Financial Sector Charter, 5% should be invested in local targeted investment.

The Fund’s investment portfolio at 31 March 2007 amounted to R662,3 billion (2006: R548,6 billion). Total investment income and net investment income (net of portfolio management fee) amounted to R116,0 billion and R115,6 billion respectively (2006: R128,4 billion and R127,9 billion respectively).

Net interest contributed R22,5 billion (2006: R18,6 billion) to total investment income, dividends R10,0 billion (2006: R7,4 billion), rental, insurance and sundry income from property R0,2 billion (2006: R0,1 billion), net profit on sale of investments R9,4 billion (2006: R17,8 billion) and adjustment to fair value R73,9 billion (2006: R84,5 billion).

Since the establishment of the GEPF the annual investment income has increased steadily from R17,4 billion in 1997 to R115,6 billion in 2007 (2006: R128,0 billion).