FAST FACT
27Four Investment Managers conducts a monthly and an annual, industrywide, survey of black fund management firms in South Africa.
The biggest black-owned asset manager is Taquanta, which specialises in money market investments.
The second largest, Aluwani, was established late in 2015 after senior staff bought out the thirdparty institutional business in Momentum Asset Management.
The amount invested with blackowned asset managers, however, remains “stubbornly low”, according to the Manager Watch Survey.
According to the 27Four BEEconomics Annual Survey 2016, black-owned asset managers manage 4.6 percent of the industry’s assets.
Rob Southey, an independent consultant at Alexander Forbes, says some of the reasons black fund managers find it difficult to find their way into portfolios are:
They tend to manage portfolios to specialist mandates so the opportunity set is limited; Few have unit trust funds; Asset consultants find it difficult to research the full manager universe;
Trustees tend to prefer larger well-known brand managers;
Most black managers are small and have short performance track records.
Southey says incubation programmes are used internationally to foster small managers and are one way retirement funds can assist in transformation.
These programmes have been used by the Eskom Pension and Provident Funds, the Telkom Retirement Fund, the Public Investment Corporation, the Mineworker’s Provident Fund and one is being implemented by the Alexander Forbes Retirement Fund (an umbrella fund for multiple employers’ fund members).
Southey says incubation programmes are not the same as providing seed capital to a new manager, but are designed to ensure that a manager is supported while it is still small and is free to manage assets.
Many start-up black-owned asset managers are seasoned investment professionals who can hold their own against larger managers, but it is not easy to start an asset management business, particularly if you do not have a track record.
This is why funds can play a