The Public Investment Corporation (PIC), Africa’s largest pension fund, has emerged as the biggest winner in the sustained gold rally that has seen stocks in gold mining companies surge — with the asset manager adding billions of rand in assets under its management since January.
The PIC, which breached R3-trillion in assets under management last year as SA equities rallied after the formation of the government of national unity, has enjoyed a purple patch due to the rally in gold stocks — to which it has significant exposure, the biggest of any domestic asset manager.
Chaired by deputy minister David Masondo, the entity owns about 15.5% of Harmony, 20.2% of Gold Fields, 15% of Sibanye-Stillwater and 14.8% of AngloGold Ashanti.
Harmony’s stock have risen 81% since the start of the year, while Anglo Gold’s stock has rallied 66% and Gold Fields is up 70%. Sibanye-Stillwater’s market value is up just less than 40% since the start of the year, with the combined market value of the four quoted companies coming in at R962bn.
The surge in the gold price, which has translated into higher valuations for gold mining stocks, puts the PIC as the anchor shareholder in these companies in the pound seats — giving it exposure of about R164bn to the sector based on current valuations.
The PIC manages assets on behalf of mainly government employees and is the largest single investor on the JSE.
The asset allocator started building up its stake in gold mining firms two years ago when the price of gold began to show resurgence as geopolitics took centre stage, driving investors to safe haven assets — of which gold is king.
The world’s largest asset manager, BlackRock, has also not missed out on the action, with the US-based group having sizeable exposure to JSE-listed gold miners. The Larry Fink-led group on Wednesday upped its stake in Harmony to just above 5%.
BlackRock’s World Gold invests globally at least 70% of its total assets in the equity securities of companies whose predominant economic activity is gold-mining.
The gold price has been on a sustained record-breaking spree since 2024. Rising inflation expectations, lower rates and continued geo-economic uncertainty are playing in gold’s favour — with the price of the precious metal having breached the $3,000 mark — and gold mining firms reporting windfalls from the surge.
Data from the World Gold Council’s 2024 third quarter gold demand trends report shows that total gold demand exceeded $100bn for the first time yet, supported by strong investment in a record-high price environment.
In another move, the PIC on Wednesday said it had invested $40m in Africa50 Group, a pan-African infrastructure investor, joining the likes of African Development Bank, the Central Bank of West African States, and the Bank Al-Maghrib as investors in the company.
Kabelo Rikhotso, the PIC’s chief investment officer, said: “Africa50’s extensive presence and expertise across the continent provides PIC with a valuable opportunity to achieve both financial and developmental objectives in line with our client mandates.”
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