Share

More asset managers ‘blackening’ in hunt for profits

accreditation
A report shows that black asset managers still only manage R579 billion of the overall asset pool of more than R5 trillion. Picture: iStock
A report shows that black asset managers still only manage R579 billion of the overall asset pool of more than R5 trillion. Picture: iStock

A growing number of asset management firms are buying or merging with black partners to become black-owned and gain more benefits.

According to 27four Investment Managers managing director Fatima Vawda, the trend is expected to continue, and is reflected in BEE.conomics, an annual survey that measures the rate of transformation in South Africa’s asset management sector.

“We expect the mergers and acquisition activities to increase as large, incumbent firms seek to be black-owned. A good example is the recent transaction by Prescient Investment Management, which qualified the firm for participation in this year’s survey,” Vawda said, pointing out that the annual survey allowed as participants firms that were at least 51% black-owned.

Vawda said the research also showed that companies that had embraced transformation had demonstrated improved performance.

She said the research also showed that there was a trend of new entrants focusing on investing in unlisted asset classes rather than opting for those on the JSE.

“Listed companies have not been generating returns, so investors now prefer unlisted ones. Investors are increasingly looking to invest in asset classes that can support the economy and drive job creation, so they are seeking innovative approaches that can meet this demand,” she said.

The report shows that black asset managers still only manage R579 billion of the overall asset pool of more than R5 trillion.

One of the notable absentees from this year’s report is Mazi Capital, which was managing about R40 billion last year. Vawda said the firm did not participate in the latest survey because it did not meet the set deadlines.

She pointed out that only 68% of the 50 asset management firms were profitable, and that they employed a total of 668 people.

BEE, Vawda said, could only take asset managers to a certain point, after which they would have to depend on their own abilities to find competitive and innovative ways to generate profits.

Of the R579 billion in assets under management by 50 black asset management firms, the top 10 account for at least R482 billion of the overall value.

Black-owned firms, the report shows, now have less than half of the traditional equities market share at 28% – this is down from 61.5% in 2011.

For the third year in a row, the firm managing the most assets is Taquanta Asset Managers with R160 billion. Prescient Investment Management joined the list with R93 billion in assets under management, while Aluwani Capital Partners has moved down to number three with assets valued at R69 billion.


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you believe that the various planned marches against load shedding will prompt government to bring solutions and resolve the power crisis?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes
21% - 103 votes
No
79% - 394 votes
Vote