South Africa’s finance minister, Malusi Gigaba, has announced that the offshore investment allowance for institutional investors will be increased from 25% to 30%.
The changes were announced by the Financial Services Board (FSB) and confirmed yesterday by the South African Reserve Bank. Asset managers welcomed the move, as it effectively allows for a greater percentage of their assets under management, and selected pension funds within certain allocation limits, to move offshore. Investments into the rest of Africa had their allowance raised at the same time, from 5% to 10%.
The changes to pensions fall under Regulation 28 of the Pension Funds Act. The FSB’s deputy registrar of pension funds, Olano Makhubela, explained yesterday that pension funds may now “acquire foreign exposure up to the revised limit of 30% in respect of foreign portfolio investments, and an additional 10% in respect of foreign portfolio investments in Africa”.
There remain some notable exceptions, for the time being. South African unit trusts, for instance, will still be limited to investing no more than 25% of their portfolios outside Africa.