SSC pulls plug on N$693m offshore manager after policy breach

The Social Security Commission (SSC) has moved N$693 million in offshore investments to a new manager after detecting a policy breach by its previous service provider.

The funds were moved from Retirement Investments and Savings for Everyone (Rise) to Symmetry after Rise breached the commission’s investment policy, standards and procedures by investing in unlisted private credit instruments – an asset class not permitted under the policy.

SSC chief executive Milka Mungunda says the breach was detected during monitoring of the portfolio, prompting immediate corrective action.

“When the SSC detected that Rise had invested in the prohibited unlisted private credit instruments, the commission acted to rectify the breach and terminated Rise’s mandate with 30 days’ notice once the breach was corrected,” she says.

She says no funds were lost during the process.

“At termination, the total assets transferred from Rise to Symmetry totalled US$39 919 461 (about N$689.3 million).

This translates to an investment growth of US$5 634 054 (about N$97.5 million).over the period.

The commission would like to make it clear once again that no money or assets were lost or unaccounted for,” Mungunda says.

She says the SSC subsequently conducted due diligence on two reputable offshore multi-manager providers with a local presence: Sanlam Multi-Managers (Glacier International) and Symmetry (formerly Old Mutual Multi-Managers).
Following this process, Symmetry was appointed as the new offshore specialist manager.

Mungunda says the selection process was carried out in line with the SSC’s investment policy, standards and procedures and supported by an exemption letter from the minister of finance dated 9 December 2020 under the Public Procurement Act.

“The letter stated that ‘in the absence of the modalities on the appointment of asset managers in terms of the Public Procurement Act, 2015, you are hereby authorised to proceed as per the provisions of the investment policy standards and procedures’,” she says.

Mungunda says offshore investing was introduced in 2017 to diversify the SSC’s portfolio, which had previously been confined to the Common Monetary Area (CMA).

As part of the diversification strategy, three asset managers were appointed for the CMA, and Rise was appointed in June 2023 as the offshore specialist manager under a full discretionary multi-manager mandate.

The SSC initially invested US$34.3 million (about N$591 million) with Rise, with no additional contribution or withdrawal made during the mandate period.

“The offshore diversification initiative has strengthened the SSC’s long-term financial position while maintaining strict compliance with our investment policies and governance standards,” Mungunda says.

By 31 August, the SSC’s total investment portfolio had grown to N$6 billion, up from N$3 billion in 2016, with offshore investments accounting for up to 30% of total assets as permitted by policy.

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