Black-owned asset managers diversify into private markets
IT-ONLINE / 20 AUGUST 2019 - 13.57 / STAFF REPORTER
Black-owned asset management firms are introducing product offerings that cater towards increased interest from institutional investors towards real assets such as infrastructure and private equity.
That’s one of findings from 27four Investment Managers’ 2019 edition of BEE.conomics, an annual survey which measures the rate of transformation in South Africa’s asset management sector.
27four Investment Managers MD Fatima Vawda says the number of companies listed on the JSE has halved from its peak in 1990 (696) to 354 currently.
From the peak of the “Ramaphoria” era to the end of June 2019 foreigners have been net sellers of both South African equities and bonds to the tune of R85-billion and R75-billion respectively.
Over the same period volumes traded on the JSE have fallen by a staggering 44% and performance has been sub-par. This structurally low growth environment has spurred the appetite of institutional investors towards real assets such as infrastructure and private equity in search for returns that can immunise long-term liabilities. This has seen a resultant increase in the number of black-owned asset managers introducing product offerings to cater for this need.
The BEE.conomics survey, now in its 11 edition also shows that merger and acquisition activity has increased across the sector with established firms doing deals to become black-owned and transforming their investment team composition.
“This is a positive signal of normalisation within the asset management -sector,” says Akona Mlamleli, investment executive at 27four Investment Managers.
The total industry assets under management (AUM) of black-owned firms is R579-billion, representing an increase of 18% from last year.
Recent anecdotal evidence suggests transformation practices are improving across the entire industry, but does this evidence ring true?
To answer this and many other questions, 27four researchers gathered a decade’s worth of information on the change in transformation patterns across the sector.
The BEE.conomics data spans the period from 2009 to 2019, and the companies surveyed range in size (AUM) from firms managing over R100 billion to small companies, managing less than R1-billion.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER