Investment Strategy
The Eskom Pension and Provident Fund (EAPF) is the pension fund for employees of Eskom Holdings SOC Ltd, South Africa’s state-owned electricity utility. Managing approximately $15 billion in assets, EAPF is one of the largest standalone corporate pension funds in South Africa. The fund has been in operation since 1952 and provides retirement, death, and disability benefits to Eskom employees and their dependents.
EAPF operates independently from Eskom in its investment governance, with a board of trustees responsible for setting the fund’s investment strategy and overseeing its implementation. The board includes representatives from both employer (Eskom) and employee constituencies, ensuring that investment decisions are made in the interests of all fund members.
The fund’s investment strategy is designed to meet its defined benefit pension obligations while managing risk at appropriate levels. EAPF employs a diversified asset allocation spanning South African and international equities, fixed income, real estate, private equity, infrastructure, and hedge funds. The fund has been progressively increasing its international diversification as South African exchange control regulations have been relaxed.
EAPF’s investment approach balances financial return objectives with a commitment to responsible investment and developmental impact. The fund integrates ESG considerations into its investment process and considers the broader social and economic impact of its investments within South Africa. EAPF is a signatory to the UN Principles for Responsible Investment and participates in industry initiatives promoting responsible investment in the South African pension industry.
The fund manages its investments through a combination of internal management and external mandates, with asset allocation and portfolio strategy overseen by the investment team and board.
Private Markets Approach
EAPF’s private markets allocation spans private equity, infrastructure, and real estate, representing approximately 10% of the total portfolio.
In private equity, EAPF commits capital to South African and pan-African private equity funds, as well as selectively investing in international private equity strategies. The fund evaluates private equity opportunities based on financial return potential, manager track record, team quality, and transformation credentials. B-BBEE (Broad-Based Black Economic Empowerment) compliance is an important consideration in manager selection, reflecting both regulatory requirements and the fund’s commitment to South African transformation objectives.
Infrastructure investment is particularly relevant given EAPF’s connection to the energy sector through its sponsor, Eskom. The fund invests in South African and African infrastructure through fund commitments and other investment vehicles, with exposure to sectors including energy (particularly renewable energy), transportation, water, and telecommunications. EAPF has been interested in clean energy infrastructure investments, reflecting both the financial opportunity and the broader energy transition considerations relevant to a fund sponsored by a fossil-fuel-dependent utility.
Real estate investments include South African property exposure through fund commitments and direct holdings. The fund’s real estate portfolio spans commercial, residential, and industrial property. EAPF considers both financial returns and developmental impact in its real estate investment decisions.
EAPF’s private markets approach is shaped by the South African regulatory environment for pension funds, including the requirements of Regulation 28 under the Pension Funds Act, which sets limits on asset allocation categories including alternatives. The fund also considers transformation requirements and developmental impact as part of its investment evaluation framework.
As one of South Africa’s larger standalone pension funds, EAPF has the scale to access a range of private market opportunities. The fund’s approach balances the desire for competitive financial returns with its responsibilities as a South African institutional investor committed to transformation and responsible investment.
Frequently Asked Questions
How much does EAPF allocate to alternative investments?
EAPF allocates approximately 10% of its portfolio to alternative investments, including private equity, infrastructure, and real estate. The fund invests in alternatives through a combination of fund commitments and direct investments, with a focus on both financial returns and developmental impact in South Africa. EAPF's alternatives program is managed through a combination of internal oversight and external manager relationships.
What is EAPF's background?
EAPF is the pension fund for employees of Eskom, South Africa's state-owned electricity utility. The fund has been operating since 1952 and serves both active Eskom employees and retirees. EAPF operates independently from Eskom in its investment activities, with its own board of trustees and investment governance structure. The fund is one of the largest standalone corporate pension funds in South Africa.
How can fund managers engage with EAPF?
EAPF manages its investments through a combination of internal management and external mandates. Fund managers can approach the fund's investment team in Johannesburg. EAPF evaluates managers on track record, strategy, transformation credentials (B-BBEE compliance), and alignment with the fund's investment objectives. The fund follows structured procurement processes for external manager appointments, consistent with South African pension fund governance requirements.
