South Africa’s Public Investment Corporation Invests Over R8 Billion to Boost Africa’s Growth

South Africa’s Public Investment Corporation (PIC), the country’s largest pension fund manager, is expanding its investment footprint across Africa, deploying over R8 billion in private credit over the past two years. As the organization seeks to diversify beyond its home market, it is prioritizing private debt to finance infrastructure and economic growth across the continent.

PIC’s Private Credit Strategy in Africa

With around R3 trillion in assets under management, the PIC is looking beyond South African borders for investment opportunities. Chief Investment Officer Kabelo Rikhotso emphasized at a Cape Town conference that private credit presents a more viable option than listed equities or private equity in Africa.

“Private equity hasn’t worked, but private debt is working well. You fund, and you receive your interest,” Rikhotso stated.

Why Private Credit Over Other Investments?

The PIC avoids listed equities in other African countries due to their small and illiquid markets. Additionally, many African businesses are family-owned and reluctant to accept private equity funding, which would dilute ownership stakes. Private credit, however, allows the PIC to support businesses and infrastructure projects while earning predictable returns.

Infrastructure Development: A Key Investment Focus

Africa faces a major infrastructure funding gap, with the African Development Bank estimating annual needs of $130 billion to $170 billion—over half of which remains unmet. The PIC sees private credit as a crucial tool in bridging this gap.

Key PIC Investments in Africa:

• $100 million investment in Africa 50, a unit of the African Development Bank that mobilizes public and private financing for infrastructure.
• Investments through intermediaries such as the African Finance Corporation to mitigate political and regulatory risks.

The Need for Strategic Partnerships

“What we’ve learned on the continent is that you can’t just go in and do it on your own,” Rikhotso said. “We have to buy into vehicles that give us diversified exposure.”

By leveraging partnerships and structured credit investments, the PIC aims to balance risk while supporting economic growth in emerging markets.

PIC’s Global Portfolio and Future Outlook

Despite a regulatory limit allowing up to 45% offshore investment, the PIC currently allocates only 12% of its portfolio internationally. Of this, 4% is invested in emerging markets, with China and India being the most significant holdings.

As the PIC scales its African investment strategy, it is likely to play a more significant role in the continent’s economic transformation, reinforcing the power of private credit as a sustainable financial instrument for growth.

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