PIC’s CEO Masilela resignation looms transparency speculation

Public Investment Corporation (PIC) CEO, Elias Masilela will officially step down from the Pretoria-based Africa’s biggest fund manager, which manages R1.6 trillion of assets, at the end of this month.

Elias Masilela's resignation as the chief executive officer of South Africa’s Public Investment Corporation (PIC), Africa’s biggest fund manager, has raised questions about the reasons for his departure.

Masilela will be joining DaMina Advisors, a frontier-markets consultancy.

“Masilela will provide high-level, unique insights on major untapped African capital markets opportunities to DaMina’s clients,” the New York-based company said in a statement. He will officially step down from the Pretoria-based PIC at the end of this month.

As well as increasing the PIC’s assets by 60 percent since 2010, Masilela sought to back development projects to underpin economic growth and fought for domestic control of companies. His resignation raised questions about the reasons for his departure, David Couldridge, an investment analyst at Element Investment Managers in Cape Town, said in a phone interview May 30, when Masilela quit PIC.

“There must be transparency as soon as possible as to why he’s moving,” Couldridge said.

Former Guinean Prime Minister H.A. Kabine Komara, former U.K. High Commissioner to South Africa Lord Paul Boateng and former African Development Bank President Babacar Ndiaye are also senior global advisers at DaMina.

Transparency had its limits, Patrick Mngcokola, the acting chairman at the Public Investment Corporation (PIC), said this week, as controversy simmered over why CEO Masilela mysteriously walked off the job with two years of his five-year contract left.

Although the process of appointing a new CEO at the giant South African investment company has begun, the PIC and Masilela remain mum on the reasons for his exit.

Mngcokola said “procedural matters” related to human resources had kept the PIC from practising the same degree of transparency it demanded from the fund managers and companies it dealt with.

“We are saying that once the CEO is appointed we will make a public statement. Is that not transparent?”

The outcome is likely to be closely scrutinised for any possible political meddling, especially as the PIC has battled to shake off the stigma of bad investment decisions — such as buying 30% of the politically connected Camac Energy. The PIC paid $270m in November, when the entire firm was valued at about $150m.

But the silence since Masilela’s sudden departure has left the domestic and international investment community, as well as the public and the pensioners on whose behalf the PIC invests, wondering about the quality of governance at Africa’s largest pension fund administrator.

The PIC, which is wholly owned by the South African government, manages R1.6-trillion in assets, which belong to about 35 public-sector pension, provident, social-security, development and guardian funds. Its largest client is the Government Employees Pension Fund whose head, John Oliphant, has been on suspension for nearly eight months.

The PIC owns about 11% of all the shares on the JSE on behalf of civil servants — and the investment community is concerned that the corporation has not used its financial clout as responsibly as it should have.