Supporting transformation ‘doesn’t mean compromising on returns’

Retirement fund trustees can play a role in transforming the asset management industry without compromising on investment returns for members of their funds, trustees and consultants attending Alexander Forbes’ latest Hot Topics seminars heard this week.

The asset management industry was described as the least transformed sector of the financial services industry by National Treasury’s deputy director general Ismail Momoniat during hearings into transformation in the industry in parliament last week.

Transformation of the asset management industry will lead to greater competition and, with that, lower fees for you, as a retirement fund member and investor.

Among the 100 asset managers that offer their services to institutional investors, such as pension and provident funds, 40 are more than 51-percent black owned, according to Alexander Forbes.

But 50 percent of the assets are managed by the five largest asset managers, none of which are black-owned: Old Mutual Investment Group, Coronation Fund Managers, Investec Asset Management, Allan Gray and Sanlam Investment Management, according to Alexander Forbes’s latest Manager Watch Survey.

None of the next five biggest fund managers are black-owned either, but the top 10 all have level two or level three black economic empowerment scores.

This graph shows how five managers used in incubation programmes by the Eskom Pension and Provident Funds grew their clients and assets under management from the time they were appointed until December last year.