Pension fund boss Abel Sithole to head the PIC
Sithole will have a huge task to restore the state-owned investment manager to its former glory
Abel Sithole, principal executive officer of the Public Investment Corporation’s (PIC’s) largest client, the public service’s pension fund, has been appointed as permanent CEO of the asset manager.
The PIC, Africa’s largest investment manager with assets under management worth R2-trillion, said on Wednesday that finance minister Tito Mboweni had ratified its board’s choice of CEO. Sithole has been heading the Government Employees Pension Fund (GEPF) since July 2015, and becomes the first permanent CEO since Dan Matjila, who resigned under a cloud in November 2018.
Sithole was not immediately available to comment on his appointment.
Reuel Khoza, chair of the PIC, said Sithole stood "head-and-shoulders" above any other candidate in the recruitment process.
Khoza is expected to provide more insight into how the board reached its decision in coming days. Former head of the GEPF, John Oliphant, now founder and chair of Thirdway Group, said that it was a good appointment and would strengthen the relationship between the PIC and its largest client, the government pension fund.
"I think Abel coming from the asset owner and ultimate client will be able to take forward the ideas of the GEPF and ensure they are implemented," Oliphant said.
In addition to holding three masters degrees — two from the University of Stellenbosch in International Relations and Futures Studies — Sithole also has an MBA from Wits University.
He worked for Metropolitan for seven years, during which time he served as an executive director, CEO of the asset- management cluster, MD of Metropolitan Asset Managers and CEO of Metropolitan Employee Benefits.
He has also held directorships of a number of Metropolitan subsidiaries as well as serving on several committees of the board.
Sithole is serving as the chair of the Financial Sector Conduct Authority (FSCA), an organisation that regulates the financial advice and investment industry.
"Given his previous experience at Metropolitan and as chair of the FSCA, he has nothing to prove," said Oliphant.
"He will be able to stabilise the organisation and mentor investment professionals, and will be the glue between the board of the PIC and the board of the GEPF," Oliphant said.
As head of the GEPF, Sithole had advocated a greater allocation to investing the GEPF’s R1.8-trillion portfolio offshore. The proposal is still being considered by the Treasury.
Sithole will have an extensive "to do" list when he begins his first day of work after the release earlier in 2020 of an exhaustive report by the PIC commission of inquiry.
President Cyril Ramaphosa established the commission to look into a range of allegations of impropriety involving the state-owned asset manager and also to evaluate and make recommendations on the organisation’s corporate structure and procedures.
Sithole will be required to co-ordinate the work of the executive with various subcommittees of the board responsible for overseeing a range of forensic investigations of deals and former executives accused of impropriety, including his predecessor.
Recovering funds relating to controversial investments the PIC made on Matjila’s watch, including in companies such as Iqbal Surve’s Ayo Technology Solutions and loans made to Jayendra Naidoo’s Lancaster Group, will also require urgent attention.
Sithole was particularly aggrieved about the way the PIC made representations on its investment in Ayo, as he described in his testimony to the PIC commission in 2019.
Sithole said at the time there should be "legal consequences" for such misrepresentation.
In conjunction with the finance minister and the PIC’s board, which has already begun a process to redesign the PIC, Sithole will be expected to implement decisions on its restructuring.
Among the ideas being considered is breaking the organisation up into boutiques according to each major asset class.
At the same time, Sithole will need to replenish talent at the top of the organisation, which has seen senior executives leaving, being suspended, or fired over the course of the past 18 months, which has affected morale drastically.
Mboweni said the cabinet had given approval for the board of the asset manager to proceed with Sithole’s appointment as CEO and executive director for a period of five years.