The event, nevertheless, prompted us to further accelerate and improve services, and several technology initiatives that were in the pilot phase at the time it occurred were expedited to fill some of the gaps in our client engagement capabilities. Among other initiatives, we fast-tracked the development of our Artificial Intelligence (AI)-powered engagement engine, Ushur, which enabled us to continue engaging with investors through non-web-based channels. Risks, challenges and opportunities The business faced fewer significant challenges in 2021 than it did in 2020, with the impact of the pandemic nevertheless still making itself felt. While remote and hybrid working arrangements were formalised during the year and while all staff working in this way were ably supported by Group IT, continuing loadshedding and unreliable internet connectivity presented efficiency challenges. COVID-19 fatigue was also an issue for staff, as was the disruptive effect of the civil unrest. Despite these challenges, there was no break in service to our members and we were able to continue to provide the quality products and services they expect from us. As already mentioned, an anticipated increase in redemptions due to the economic impact of the pandemic on investors, which we had identified as a risk for the year, did not materialise. Similarly, only a few members switched to lower-risk investment options, demonstrating the understanding they have of short-term market shocks and the long-term performance of well-managed investment portfolios. The business managed these challenges primarily through regular communication with staff, advisers and investors, which kept them updated on developments following the cyber event, on notable shifts in the economic environment and on market responses to these. And, as in 2020, we were able to retain our full staff complement on full pay throughout the year despite intermittent lockdowns. This was important to us from a staff management perspective and also because we need to retain the value of our highly skilled and experienced staff for the benefit of our members. Prospects PPS and PPSI will continue to follow a diversified investment strategy to mitigate against the weak economic conditions in South Africa as much as possible. Restoring consumer, business and investor confidence in South Africa is also crucial for economic growth and we are committed to playing a constructive role in doing this. The escalation of the Russian and Ukrainian conflict has heightened geopolitical risk, impacted energy and food prices, and introduced material uncertainty into financial markets. In the immediate term, there are significant inflationary risks, the prospect of lower global economic growth and increased scope for policy error. The situation is fluid and dynamic, however, with a wide range of possible outcomes. In addition, markets have been highly volatile with sharp daily moves in both directions. In situations like this, PPS takes a longer-term perspective and relies on the diversified positioning of our underlying managers and their assessment of the relative risk and rewards to manage our portfolios. Going into the conflict, PPS had minimal (0.2%) direct Russian exposure, and managers did not add to it into initial weakness. Managers are assessing their positioning on an ongoing basis and will make changes to the broader portfolio (the Russian exposure is effectively untradable) where they feel necessary. The increased scale of our asset base has numerous benefits for our investors, in that it presents further opportunities for reduction of costs both within the operations of the business and within the PPS funds. The business is on track to meet an ambitious five-year plan of having R60 billion of assets under management and serving 60 000 investors. Further scale will be added during 2022 as PPS Multi Managers will manage a bigger portion of our members’ Profit-Share Account assets in line with the Board-approved asset management strategy. This will further enhance the proposition for PPS members to benefit from the investment performance of our funds and to enjoy sustainable Profit-Share allocations from their investments in the funds, as well as their use of the PPSI retirement and savings solutions. 2021 2020 2019 2018 2017 Total assets under management (R'bn) 28.6 31.4 37.8 43.1 54.0 2021 2020 2019 2018 2017 New business: investments (R'bn) 4.0 5.9 6.1 7.5 7.1 R54.0 billion R7.1 billion 65 | PPS Group performance at a glance PPS Integrated Report 2021
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