RETENTION FUNDS
Investors recoup funds from African Bank ‘side pockets’
The bank has issued retrenchment notices that may affect up to 652 jobs, according to a report
Asset managers that created retention funds to "side pocket" R4.6bn of African Bank debt have been slowly returning this money to relieved investors, whose capital was tied up for 18 months or longer. Stanlib — which transferred R3.47bn into side pockets, by far the most of any money manager — had returned about R2.2bn in capital and R326m in interest to investors by April 4 2017. Ringfencing African Bank debt had been the fairest way to ensure that only those investors affected by the curatorship benefited from the recovery of any capital and interest, said Anthony Katakuzinos, Stanlib’s retail chief operating officer. Investors suffered a 10% write-down on the value of African Bank debt when it was placed into curatorship in August 2014. Trade in its bonds was also suspended. At the time, the creation of 47 retention funds, to house the impaired, illiquid debt investments, was controversial.
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