Institutional investors have financial might to change mindsets and investment patterns

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Institutional investors have financial might to change mindsets and investment patterns, writes Ndabe Mkhize

Pension funds collectively have assets under management worth about R4.5-trillion, and therefore the muscle to make a major, positive impact on our world.

We all grasp the pressing need for investment in our country’s infrastructure, I think; indeed, President Cyril Ramaphosa made it a cornerstone of the government’s agenda for inclusive economic growth in his 2020 state of the nation address. In a country such as ours, with its relatively small taxpayer base and high debt burden, it’s simply not feasible to expect government to foot the entire bill for infrastructure development. But such development has to happen if we are to build a better, transformed society: one that is stable, sustainable, just and equitable.

Nearly two decades ago, as SA began legislating BEE, the EPPF embraced transformation as a central tenet of its investment philosophy, along with financial performance. Our initial focus was on transforming the asset management industry, which at the time was overwhelmingly white and male in its composition .

In the past decade we’ve taken transformation a step further, with a development programme for managers in the private equity space. This programme, which is run by an independent entity on our behalf, has made a significant contribution to growing investment teams that reflect transformation and greater diversity.

We grasp the importance of not going it alone: collaborative action, involving pension funds, asset consultants and international players, makes infrastructure development investment more viable, more affordable and less risky.

 

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