Black managers’ asset share still small

THE NUMBER of black asset managers in South Africa has grown to 45, and they manage R416 billion of the R4.6 trillion managed by the savings and investment industry, according to the latest 27four Investment Managers survey, which is expected to be released next month.

Akona Mlamleli, the head of transformation at 27four, said yesterday that the increase in the number of black asset managers had not translated into growth in size.

Mlamleli said black asset management represented less than a tenth of the total pie managed by the private sector.

“While the growth in the size of the black asset management sector has been relatively slow from 2016 to 2017, it has shown resilience in the face of a recession in South Africa.

“There is growth in the number of black asset managers, particularly in Johannesburg, and the number of black asset managers has more than doubled since 2009, along with similar growth in assets under management,” Mlamleli said.

Since 2009, 27four Investment Managers has been conducting an annual industry wide survey of black fund management firms in South Africa.

Last year, Alexander Forbes released a survey that found that none of the top 10 asset managers in South Africa was black-owned.

According to the survey, of the 130-plus asset managers in South Africa, only 42 were black-owned and only two black asset managers, Taquanta and Aluwani, managed assets of more than R50bn.

Alexander Forbes said the reasons for low black participation in the asset management industry included a product offering focused mainly on specialist mandates, low penetration in the unit trust market, and trustees’ preference for the well-known managers.

In June, the Association of Black Securities and Investment Professionals said black entrepreneurs and financial professionals could receive cash support of R120bn if proposed revisions to the Financial Sector Code of Good Practice are adopted, with newly established black asset managers being supported through an incubation programme.

Mlamleli said the current draft of the Revised Financial Sector Code had the objective of growing the economy through nurturing new enterprises, as envisaged in the 2015 Generic Codes of Good Practice issued by the Department of Trade and Industry (DTI), and this would assist black asset managers.

“This is further supported by the DTI’s commitment to growing 100 black industrialists over the course of the next few years. The establishment of black-owned, managed and controlled asset management firms falls firmly within these policy directives driven by government.”

A study of independent/boutique asset managers conducted by Rand Merchant Investments found that, of the 126 managers, the top 10 managed 76 percent of the independent/boutique industry’s asset under management.

The study found that blackowned asset managers manage R400bn, or 4.5 percent, of the R8.9trn managed by the savings industry and 7.6 percent of the R5.2trn managed by the asset management industry.

Black-owned firms managed 16 percent of the R2.4trn in assets managed by independent/boutique managers.