Raquel Pichardo-Allison talks to John Oliphant, investment head at South Africa's Government Employees Pension Fund about his quest for high-impact, responsible investing
John Oliphant, head of actuarial and investments at the Government Employees Pension Fund (GEPF) in South Africa, the country’s largest scheme, said he carries out his tasks in a simple and boring way.
The ZAR926bn ($137bn) scheme boasts a 100% funding level, an enviable status for most other pension funds.
“I believe I am the most boring (chief investment officer). I don’t do fancy things. I do simple things like invest in index tracking...and buy real assets,” said Oliphant.
But at the heart of the fund’s activities is a strong commitment to responsible investment (RI), and more specifically to high-impact, high returning, developmental investing (DI). The theme weaves its way through the decisions made throughout not only the fund’s investments, but the strategic principles that form the cornerstones of the GEPF’s operations.
Raquel Pichardo-Allison: What are the strategic principles set out by the board of trustees?
John Oliphant: One of them is that we want to remain a leader in responsible investing. The second is to develop the ability to be a one-stop financial centre that offers our members and pensioners flexible benefits. We want to optimise the fund structure in terms of governance. We want to be an employer of choice, and we want to encourage and maintain credibility with our stakeholders.
Raquel Pichardo-Allison: What do you mean by becoming a one-stop shop?
John Oliphant: It links to responsible investing. There are two areas of RI. We speak about integration of (environmental, social and governance) issues, and us being signatories of the United National Principles of Responsible Investing.
The second leg is what we call developmental investing, where you put emphasis on high social impact. This year we launched a developmental policy framework where we try to look at how we can make investments that can generate excellent investment returns for the fund, but also have a positive impact on our members and a positive impact on society at large.
It links quite well with being a one-stop financial services centre. If you take our DI framework, it’s based on four pillars. One is economic infrastructure, which is about making investment in energy. We are constrained in terms of (energy) growth. If our overall energy supply is not growing, we as the GEPF will fail to grow, because we see ourselves as a universal owner – the fund owns a part of the economy. So if the economy is constrained in terms of growth, the GEPF itself will fail to grow. We own a third of the economy.
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