South African Pension Fund Investment Plan Raises Red Flags

A proposed plan to invest R10bn of metalworkers' pensions in a new company called Metal Bridge has been criticized by the Financial Sector Conduct Authority (FSCA). The authority warned that the funds could be at "high risk" if the plan goes ahead. The investment is intended for a new company with no track record, which has raised concerns about its viability. The FSCA also questioned the ownership structure of Metal Bridge, which could leave workers with less than half of the proceeds of the investments.

The proposed ownership structure of Metal Bridge has been criticized for favoring business interests over workers. Leading black business figure Elias Monage and top asset manager Costa Economou are at the center of the plan. Economou, who is also the co-founder and CEO of Colourfield Liability Solutions, confirmed that he authored the proposal. The plan was presented to the pension funds' boards, but trustees claim they felt pressured into agreeing to the scheme. They complained that board papers arrived too late for them to read and that the chair's summary represented only the views of business.

The Metal Industries Provident Fund and the Engineering Industries Pension Fund have more than 200,000 contributing members combined. Their investment consultants had offered another investment route, but the task team instead backed Monage's proposal. In June 2025, Willis Towers Watson and Novare Actuaries and Consultants presented guidelines on when to deploy the money and how to manage the risk. However, the FSCA has raised several red flags over the move, including that Metal Bridge does not yet have a license to run a financial services company.

The FSCA has also expressed concerns about the misrepresentation of Metal Bridge's ownership structure. Economou is listed as the sole shareholder, while the funds claim to hold a 40% stake in the company. The regulator has told the pension funds that R10bn is an extraordinarily large amount and investing it in Metal Bridge, an upstart asset manager, is inconsistent with prudent risk management. The FSCA also said there appears to be a misrepresentation about who owns Metal Bridge.

Economou denied any misrepresentation, saying he was the sole shareholder when Metal Bridge was incorporated in 2025, before the shareholding was finalized in March 2026. Bloom Bridge Holdings now owns 50%; a new company, Filotimo, 10%; and each fund 20%. He confirmed that the funds had paid commitment fees, which help cover Metal Bridge's costs, but declined to disclose the fees. At a 2% annual fee common among private-equity managers, a R10bn mandate would earn Metal Bridge about R200m a year.

The FSCA has demanded answers from the pension funds, including minutes, recordings of board meetings, and the due diligence report. The regulator has also expressed concerns that the funds' members were never told about the proposed deal with Metal Bridge. The FSCA said it could not confirm that Metal Bridge belonged to a recognized private equity industry body, as the rules require. This left it unable to verify whether the investment complied with the Pension Funds Act.

Economou said the proposal drew on discussions convened by the funds, in which he had taken part at the trustees' invitation. He said no capital has been drawn and no investment made, but confirmed that the funds had paid commitment fees. The FSCA's concerns have raised questions about the viability of the investment plan and the potential risks to workers' pensions.

Key points

• The Financial Sector Conduct Authority has warned of high risk in the R10bn Metal Bridge investment plan.
• The proposed ownership structure of Metal Bridge favors business interests over workers.
• The FSCA has expressed concerns about the misrepresentation of Metal Bridge's ownership structure.