Grace Ashiru
The Eskom Pension and Provident Fund plans to diversify into venture capital additional assets.
Bloomberg says the fund manages about R185 billion in assets, about $10 billion. About two-thirds of those assets are in South African stocks, inflation-linked debt, land, and nominal bonds.
The fund’s assistant chief investment officer, Phathutshedzo Mabogo, said, “We are about to invest in venture capital, a type of private equity. “We’ll begin with regions like Europe and North America outside the country. We’ve agreed to give $100 million.”
Recent changes to South Africa’s pension laws let funds spend up to 45% of their assets outside of the country. About 30% of the share goes to the Eskom fund.
Mabogo also says private equity and venture capital are “an area of growth that could provide decent returns without adding too much risk to the overall portfolio.”
About 5–6% of the fund’s net asset value is currently invested in private equity. There are no plans to grow offshore private equity investments to the required 45% in the short term.
Since South Africa’s biggest venture capital fund, the Naspers Foundry, shut down in February, one would have thought that the Eskom fund would have looked into investing in local startups before looking abroad. Alas.
