Large pension funds have a duty to consider investments that will help rebuild the country, says Elias Masilela, the new chair of Sanlam’s board and the national task force on impact investing. Masilela said as pension funds exist in an economic system, they have a long-term interest in preserving that system and must therefore consider investments that contribute to rebuilding SA’s economy, but not at the expense of their own growth.
Futuregrowth and Alexander Forbes were among the managers invited to participate in the government’s sustainable infrastructure development symposium in June. This in turn affects the returns you can earn on your savings, which are invested in shares and bonds issued by businesses and the government.
They say funds can already make use of the existing different asset class limits for such investments, Only large defined benefit funds such as the Government Employees Pension Fund will ever have more than about 5% exposed to unlisted infrastructure projects because the unlisted debt and private equity investments are typically not very liquid, she says.
Slawski says the envisaged infrastructure needs funding beyond what local retirement funds can provide, which is why the infrastructure symposium was aimed at international sovereign wealth funds, large international infrastructure funds, big defined benefit funds like those in Europe, foundation trusts and US endowment funds.
Slawski agrees that linking returns to the risks is key and is concerned that the ANC has said changes to regulation 28 are required to “enable cheaper access to finance for development” — pension funds’ financing should not be cheaper than that provided by any other investors, she says.