Senior employees at a unit of South Africa\u2019s Public Investment Corp have accused executives at the continent\u2019s biggest fund manager of causing an \u201cexistential crisis\u201d after a series of scandals over the past few years.<\/p>\n
Staff at the Isibaya Fund, which oversees unlisted assets at the $136 billion PIC, submitted a list of complaints including a failure to renew a mandate with the division\u2019s biggest client and allegations of general poor management, according to a nine-page letter to the company\u2019s investment committee seen by Bloomberg.<\/p>\n
A 2016 agreement with the Government Employees Pension Fund, which manages South African state-worker retirement funds, is being allowed to expire, wrote the authors of the message, dated May 7 and confirmed by the PIC.<\/p>\n
\u201cAn oversight of this magnitude and severe impact thereof, which places the PIC in a precarious position, ordinarily would require accountability,\u201d the Isibaya workers said in the letter. \u201cWe are unaware of any action taken against the custodian of this issue.\u201d<\/p>\n
A halt to the PIC\u2019s investments in unlisted assets would hamper its aim to play a developmental role promoting the growth of Black-owned businesses in South Africa and investing in projects with a social impact. The issue also comes as the PIC struggles to recover from the outcome of a judicial inquiry, which last year found management had flouted internal procedures and made questionable investment decisions over many years.<\/p>\n
The Isibaya division, which doesn\u2019t include holdings in unlisted property, accounts for about 4.3% of PIC assets.<\/p>\n
The team of about 100 people won\u2019t be able to complete ongoing investments or embark on new ones until a new deal with the GEPF is negotiated, said a person familiar with the situation, who requested anonymity. As much as about a fifth of the PIC\u2019s assets can be allocated to unlisted investments, under the money managers\u2019 guidelines, the person said.<\/p>\n
The matter is \u201cbeing attended to internally,\u201d the PIC said in a response to questions. The GEPF said it doesn\u2019t \u201cdiscuss operational matters between itself and the PIC in the public domain.\u201d<\/p>\n
Manager behavior<\/strong><\/p>\n As well as calling for the mandate issue to be resolved, the Isibaya team has demanded a meeting with the investment committee to discuss their complaints about the division\u2019s acting head, Lusanda Kali.<\/p>\n Kali implemented a restructuring of the division within three days of her appointment on March 27 last year, according to the letter, breaching the employment contracts of some members of the group. She also manages the team in an \u201coppressive, antagonistic and retributive way,\u201d the staff said.<\/p>\n They also said that important staff had resigned, others had been booked off sick and more were looking to leave as a result of her management style.<\/p>\n When Bloomberg called the PIC and asked to be put through to Kali the calls were not answered.<\/p>\n The Isibaya Fund, founded in 1995, \u201cinvests in commercially viable African projects that have a strong, positive developmental impact and transformation\u201d ranging from renewable energy to healthcare, according to the PIC\u2019s website.<\/p>\n
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