Achieving Investment Excellence

Case Study—GEPF

THE DUAL MANDATE DILEMMA

Background

The Government Employees Pension Fund (GEPF) was launched by the Mandela government in May 1996.¹ At the moment, it is the largest fund in Africa. Its assets under management are more than R1.67 trillion in March 2017, which is about $150 billion (depending on exchange rates).² It employs a liability-driven approach to maximize returns and minimize risks relative to liabilities.³ The fund was set up for government employees in South Africa and has more than 1.2 million active members and in excess of 400,000 pensioners and beneficiaries.

The board, appointed for a four-year term as prescribed by law, consists of 16 trustees, led by an elected chairperson and vice-chairperson. As GEPF is committed to building a better society, it plays an important role in “driving the corporate sector towards adopting sustainable business practices that generate long-term financial rewards and have a positive impact on South Africa.”⁴ GEPF has created the GEPF's Development Investment Policy, which has adopted a four-pillar approach to developmental investing:

1. Investment in economic infrastructure;
2. Social infrastructure;
3. Sustainability projects; and
4. Enterprise development projects.

“Many of these developmental projects are located in areas where poverty is high and GEPF believes these investments will go a long way towards creating jobs, alleviating poverty, increasing economic participation of impoverished communities, and assisting and ...