Dr Dan seeks a cure for PIC's many problems

Dr Dan Matjila faces a steep challenge as the new head of the R1.6-trillion Public Investment Corporation: raising the pensions of government workers while kick-starting flagging economic growth, reviving investor confidence and meeting demands from government.

In a career ranging from maths professor to chief investment officer of the PIC, the 52-year-old Matjila won the respect of his peers as someone who can handle the pressure of the big time and reduce the state-owned company's many challenges into simple ideas.

"There's a plethora of stakeholders," says Royal Bafokeng Holdings CEO Albertinah Kekana, who worked with Matjila at the PIC.

"I think he has a very good grasp [of the issues]. Running a fund of R1.6-trillion is not easy. There's so much complexity. If you can remain calm in a demanding role, it's very helpful."

This week, South Africa's cabinet promoted Matjila to CEO in place of Elias Masilela, who resigned in murky circumstances a few months back. Neither government nor the PIC released the reasons for his departure, leaving a cloud of poor governance hovering over an entity that, ironically, is meant to promote governance at the companies in which it invests.

The PIC has a say in most corporate issues in South Africa. About 55% of its funds are in listed assets, making up 13% of the entire value on the Johannesburg Stock Exchange, while 35% is in bonds. This gives it an immense amount of power, evident when Matjila helped scupper a takeover bid for drug maker Adcock Ingram Holdings earlier this year by Chile's CFR Pharmaceuticals SA, arguing it was a bad deal.

Matjila 's challenges will be many: battered by strikes, ratings downgrades and a jobless rate of about 25%, the country is projected to post its lowest growth since a 2009 recession. The JSE's benchmark All Share index has climbed 3.6% this year, compared to 18% last year and 23% in 2012.

The PIC's first mandate is to get good returns for state worker pensions, which make up about 90% of the funds it manages.

Under Matjila's lead, it's done that, with assets under management more than trebling to R1.6-trillion. In the year to March, the Government Employees Pension Fund reported a return of 14.77%, excluding offshore investments. The All Share index rose 20%.

But the PIC's mandate is often confused: government has also directed the PIC, whose chairman is Deputy Finance Minister Mcebisi Jonas, to support its efforts to tackle the issues holding back economic growth such as a lack of power supply and transport routes, while supporting black-owned businesses.

"He's got a very rare combination of being very strategic and being very technical," said Patrice Rassou, head of equities at Sanlam Investment Management. "He grasps issues very quickly. He is someone who has big-picture thinking."

Matjila holds a PhD in mathematics and completed a diploma in mathematical finance at Oxford.

Initially, he stayed in academia. He was popular with students when he lectured in applied mathematics at what is now known as the University of Limpopo in Polokwane.

Dressed in the best suits he could afford, he would stand at the small chalk board in his office without supporting documents and show students and colleagues how to work out problems, according to Bethuel Ramadisha, a fellow mathematics lecturer there.

"You would go to him if you couldn't solve something," said Ramadisha. "He would solve it. He would go to class without any notes with him, but he knew exactly what to say and when to say it."

Ambition drove him to the private sector.

After stints at Anglo American and Stanlib Asset Management, Matjila was hired as a risk manager at the PIC in 2003 by then CEO Brian Molefe, who promoted him to chief information officer two years later.

Observers have said Matjila held more sway at the PIC even before Masilela resigned.

"He was in charge of PIC and its activities," says Peter Attard Montalto, an economist at Nomura International.

"He gave the PIC a much firmer overall strategy than they had had before and is probably more gutsy around some of the interventions."

Among the issues Matjila has committed himself to tackling are disproportionate executive pay and the poor conditions mine workers live in.

Sanlam's Rassou said: "All these issues, which were at the fringe of investing, have become more mainstream now." The PIC and Dr Matjila have been at the forefront of this thinking."

- Bloomberg