Warning on bridge too far for pensions

Share current article via EmailShare current article via FacebookShare current article via TwitterShare current article via LinkedInSipho MasondoEnter fullscreen mode displaying this image.ExpandElias Monage, president of the Black Business Council and a trustee in the Metal Industries Provident Fund and the Engineering Industries Pension Fund. Picture: SEIFSA A controversial plan to commit R10bn of metalworkers’ pensions to a new company with no track record called Metal Bridge has come under fire from the Financial Sector Conduct Authority (FSCA), which warned the funds could be at “high risk” if the plan goes ahead.

In terms of the proposed ownership structure, workers under the Metal Industries Provident Fund and the Engineering Industries Pension Fund would receive less than half of the proceeds of Metal Bridge’s investments — even though they would be funding the entire business.

At the centre of the drama are leading black business figure Elias Monage, who first presented the proposal to the pension funds’ boards, and Costa Economou, said to be a top asset manager and the former president of the Actuarial Society of South Africa. Economou is also the co-founder and CEO of Colourfield Liability Solutions, which already manages money on behalf of the funds.

Unimpressed trustees of the pension funds claim they felt “pressured or bullied” into agreeing to the scheme at a special board meeting in March. They complained that the board papers arrived too late for them to read them and that the chair’s summary “represented only the views of business”.

The two funds have more than 200,000 contributing members combined.

Their own investment consultants had offered another investment route. In June 2025, Willis Towers Watson and Novare Actuaries and Consultants presented the funds’ internal infrastructure task team with guidelines on when to deploy the money and how to manage the risk. However, the task team instead backed Monage’s proposal.

A R10bn allocation to a new, co-owned platform is material and high risk

One trustee called it “a recipe for disaster”, while another asked, “Are we building a business for others using workers’ money?”

They demanded to know who really owned Metal Bridge.

Correspondence seen by the Sunday Times shows the FSCA has raised several red flags over the move, among them that:

In particular, the regulator has told the pension funds that R10bn was an extraordinarily large amount and investing it in Metal Bridge, an upstart asset manager, was inconsistent with prudent risk management.

“A R10bn allocation to a new, co-owned platform is material and high risk,” warned the FSCA, which regulates financial services companies.

The FSCA also said there “appears to be a misrepresentation” about who owns Metal Bridge. Its records show Economou as the sole shareholder, while the funds claim to hold a 40% stake in the company.

The regulator also shredded the funds’ claim that they had done “comprehensive due diligence” on the investment scheme, because the report was never handed over.

According to the correspondence, in February last year, Monage, a trustee of the two funds, presented a proposal to the task team established to set up a new, dedicated internal infrastructure investment company, which would later become Metal Bridge.

Monage’s proposal was pitched as a vehicle for transformation and job creation in the industries where the funds’ members work. But the funds, whose members’ money would bankroll the venture, would get just 40% of the company, with 15% for “other black investors”. The biggest slice was earmarked for unnamed “key investment individuals” with expertise in liability-driven investment and infrastructure.

Costa Economou, an asset manager and the former president of the Actuarial Society of South Africa. Though the proposal was signed by Monage, Economou confirmed to the Sunday Times that he authored it. He also confirmed he was one of the “key investment individuals” listed in the proposal.

Metal Bridge had come to the table with an even bigger appetite: initially, talks centred on a R20bn pipeline of deals for Metal Bridge to manage. Only when the consultants pointed out that this would breach the funds’ own investment limits and regulation 28 of the Pension Funds Act (PFA) was the figure cut to R10bn. Even then, the consultants warned, this amount would swallow almost all of the roughly R11.2bn the funds had left for infrastructure.

Following the March meeting, a concerned party blew the whistle and informed the FSCA about Monage’s proposal. Four days later, the regulator used its legal powers to demand answers. It wanted minutes, recordings of board meetings, the signed resolution, the due diligence report, and an answer on whether trustees had been coerced.

The funds’ answers only deepened the regulator’s concerns. It said they had presented the actuary’s commentary as advice, which was “misleading”, and overstated a qualified legal opinion based on facts supplied by Economou. The FSCA also took issue with the funds’ members never having been told about the proposed deal with Metal Bridge.

The regulator also said it could not confirm that Metal Bridge belonged to a recognised private equity industry body, as the rules require. This left it “unable to verify” whether the investment complied with the PFA.

Economou said Metal Bridge had applied for membership of such a body but confirmed that Colourfield was not a member.

He said the proposal drew on discussions convened by the funds, in which he had taken part “at the trustees’ invitation”, and that the trustees who invited him “knew who prepared the proposal”. He said he “did not ask Mr Monage, or anyone else, to act on my behalf or to present a proposal as their own”.

Economou said no capital has been drawn and no investment made — but confirmed the funds had paid commitment fees, which help cover Metal Bridge’s costs

Economou denied any misrepresentation, saying he was the sole shareholder when Metal Bridge was incorporated in 2025, before the shareholding was finalised in March 2026. Bloom Bridge Holdings now owns 50%; a new company, Filotimo, 10%; and each fund 20%. He said the two companies belonged to Metal Bridge’s investment professionals, including him, but declined to name the others.

He said the funds’ shares were issued at par value but conceded they “had no value at the time of their issue”.

Economou said no capital has been drawn and no investment made — but confirmed the funds had paid commitment fees, which help cover Metal Bridge’s costs. He declined to disclose the fees, saying they were negotiated by the funds’ consultants and were confidential.

At the 2% annual fee common among private-equity managers, a R10bn mandate would earn Metal Bridge about R200m a year. Members would pay all of it, while the funds’ 40% stake means most of the profit would flow to Bloom Bridge and Filotimo.

Economou said R10bn was about 5% of the funds’ combined assets and that the decision on its size was “the trustees’ own”.

“It is not being used to build a business for others,” he said, adding that the funds share in Metal Bridge’s profits through their stake in the company and that every deal must be approved by an investment committee on which no trustee sits.

He said his interest was “fully and consistently disclosed”, that Metal Bridge operated lawfully under Colourfield’s licence, and denied any business dealings with Monage.

The funds’ principal officer, Mphumzi Maqungo, said the matter was subject to an “information-gathering exercise” by the FSCA, not an investigation. He declined to answer questions, saying the funds’ engagement with the regulator and the boards’ deliberations were confidential “as a matter of law”.

Monage did not respond to requests for comment. Neither did the FSCA nor Mariaan de Jager, chair of the two funds’ trustees.

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