The Public Investment Corporation (PIC), Africa’s largest asset manager with assets under management of more than R3-trillion, is confident struggling poultry producer Daybreak Foods can be turned around.
The PIC last week invested an additional R150m of its own operational funds in the now 100% owned company to protect it from liquidation and to allow the business rescue process, which commenced last month, to proceed. This brought the PIC’s additional investment this year to R400m and its total investment to R1.7bn.
Deputy finance minister and PIC chair David Masondo said in a briefing to parliament’s standing committee on public accounts the PIC did not intend to continue putting money into Daybreak, which had to improve.
The business rescue plan, which Masondo hoped would avert liquidation, was expected by August 22.
PIC chief investment officer Kabelo Rikhotso said the company could be turned around but stressed the PIC did not want a long, costly business rescue process as Daybreak could not sustain its funding.
He said that as Daybreak had fixed assets worth R700m-R800m the PIC was “comfortable” it would get its R400m new investment back. But it needed a strong management team.
Masondo said the PIC had underestimated the risk of its investment in Daybreak and overstated the returns. “This was the original sin,” he said. “In this particular case the PIC overpaid for this investment.”
The company has been beset by poor financial management, fraud and corruption and was also hit hard by avian flu, load-shedding and cheap poultry imports.
Its activities have also been curtailed by a high court judgment in favour of the National Society for the Prevention of Cruelty to Animals after an exposé of starving chickens, hundreds of thousands of which had to be culled.
The committee was briefed on the performance of the PIC’s unlisted investment portfolio the day after the acting head of the portfolio, Thabiso Moshikara, was placed on precautionary suspension on the basis of whistle-blower allegations, according to a News24 report, that he solicited a R3m bribe from businessman Ralebala Mampeule whose company Levoca 804 had received PIC funding of about R693m.
Newly appointed PIC CEO Patrick Dlamini said the corporation planned to begin lifestyle audits of its senior officials.
He said the PIC invested in unlisted companies to bring about transformation and job creation. The unlisted Isibaya Fund, which has a market value of R73bn and a total value of R116bn, is dedicated to transformation and developmental objectives and has created more than 190,000 jobs since inception.
Since 2020, R400m, or 0.6%, of the total Isibaya portfolio had been impaired, with only one impairment of R100m over the past three years in Enable Capital, which is in business rescue.
About 1% of the book is in the 20 worst performing investments, which include AfriSam (R11bn), Bayport (R1.8bn), Kefolile (R1.8bn) and Daybreak (R1.7bn). These 20 posed a significant drag on the portfolio’s performance, the PIC said, adding that they were either in turnaround process, litigation, liquidation, business rescue or in the process of being exited. African Bank was also underperforming.
The top 20 investment performers constitute 61% of the total book.
Rikhotso said the total unlisted portfolio of 153 company investments comprised 4.5% of the total PIC’s assets under management, which had grown 30% from R2.3-trillion in 2021 to R3-trillion by end-March 2025 and now stood at about R3.2- trillion. Of the entire book, 3.1% resides in the Isibaya Fund.
Two of the PIC’s clients, the Unemployment Insurance Fund and the Compensation Fund, have suspended their mandate to the PIC on unlisted investments. It also invests on behalf of the Government Employees Pension Fund and other smaller clients.
Masondo told MPs the PIC planned to set up a dedicated infrastructure investment unit within the organisation.
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