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South Africa: Abel Sithole new boss of Africa’s largest asset manager

By Quentin Velluet
Posted on Friday, 29 May 2020 13:34

Abel Sithole speaking at the University of Stellenbosch in South Africa.
Abel Sithole speaking at the University of Stellenbosch in South Africa. © University of Stellenbosch/Youtube/2017.

As head of the Public Investment Corporation, the pension fund specialist will be responsible for improving the image of the South African institution.

“We wish him well in leading the organisation and in restoring its integrity”, said Tito Mboweni, South African Finance Minister, officially welcoming Abel Moffat Sithole on 27 May, as the new CEO and Executive Director of the Board of Directors of Public Investment Corporation of South Africa (PIC), the continent’s largest asset manager ($122bn under management).

READ MORE South Africa: Nigeria to the PIC’s rescue?

The date of his actual appointment is yet to be determined, although he is already involved in the recruitment of the rest of the public company’s senior management.

Political interference

The 57-year-old has been told that his number one priority for his next five years in office will be to restore the image of an institution tainted by several accusations of political interference during Jacob Zuma’s presidency, as acknowledged by a report of a judicial commission of inquiry published on 12 March 2020.

READ MORE Africa’s largest pension fund changes tack

He will also have to define a new investment strategy and restore confidence after the PIC was left without a managing director since Dan Matjila’s resignation eighteen months ago.

Sithole was chosen from among 200 candidates to head a company that holds direct and indirect interests in a myriad of large pan-African and international groups.

The PIC has stakes in companies such as:

  • Ecobank
  • the four leading South African banks (Absa Bank, FirstRand Bank, Nedbank and Standard Bank)
  • the insurer Sanlam – thus indirectly Morocco’s Saham –
  • Naspers
  • MTN
  • Vodacom
  • British American Tobacco
  • Dangote Cement Plc

Abel Sithole is familiar with the institution since he has headed the South African Public Servants Pension Fund (GEPF) since July 2015.

The latter is one of the largest pension funds in the world with $103bn in reserves for 1.2m active members and represents 87% of the funds managed by PIC.

READ MORE South Africa’s GEPF pension fund ready to take a leap offshore

The entity has also entrusted some of its funds to investors such as Blackrock Advisors UK Ltd ($5.6bn at the end of March 2019), JP Morgan ($331m) and Goldman Sachs ($168m).

With a master’s degree in international relations from the University of Stellenbosch and an MBA from the University of the Witwatersrand, this chartered accountant specialising in insurance and financial regulation also studied in the United States, where he earned a bachelor of arts degree from Lawrence University in Appleton, Wisconsin.

Conflict of interest?

Prior to joining the PFEG, where he remains Managing Director, Sithole was Deputy Director of the Institute of Futures Research at the Stellenbosch University Business School.

He is also a Commissioner of the South African Financial Sector Regulatory Authority (FSCA) and has served two terms as Head of the Pension Funds Institute (PFI) and as a member of the Board of the Financial Planning Institute (FPI).

READ MORE South Africa’s PIC in talks with Barclays on African business stake

Sithole’s various hats – including those of the PPEG and the FSCA – led to suspicions of conflict of interest in 2018, which the FSCA’s Transition Management Committee dismissed in an interview with the trade magazine Today’s Trustee: “The PPEG was not regulated and supervised by the FSB [FSCA’s predecessor] before, nor is it currently regulated and supervised by the FSCA. So there is no conflict in this regard. … Dr. Sithole is not part of any governance structure of the PIC and is not involved in any of its internal operational and decision-making processes,” the committee stated at the time.

This new appointment at the head of the PIC could therefore reopen the debate and constitute an additional difficulty in the already delicate management of the institution.