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The Mpati commission of inquiry into the Public Investment Corp (PIC) is hearing allegations of impropriety and possible corruption, but budget documents answer a larger question: how has the PIC performed as a fund manager? Short answer: not well. The PIC is by no means on its own in the "poor returns by fund managers department", but the impact of underperforming investment returns in the case of the PIC is worrying because of its huge size: just over R2-trillion. It also illustrates the problem of larger fund managers, which are effectively in the position of tracker funds when markets underperform, and there is none even close to the size of the PIC. The problem is not currently acute, however, because the Budget Review notes that an actuarial valuation, completed in December 2018, showed that the PIC’s then R1.8-trillion in assets was sufficient to cover 108.3% of its liability on a "best estimate" basis. A "best estimate" basis measures the present value of future pension liab...

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