Rival loses analysts to Old Mutual
THE OLD Mutual Investment Group (Omig) poached three members of rival Coronation’s emerging markets team — at huge cost — to establish a global equities team based in SA.
Coronation has allowed its staff to go, but with lengthy restraint-of-trade periods.
Pieter Hundersmarck, David Cook, and Kyle Wales, all former equities analysts in Coronation’s emerging markets team, will set up and manage Omig’s global equities fund, offered on Omig SA’s distribution platform, but managed from London.
“The new global equity team’s remuneration package will be structured in a similar way to our existing investment boutiques, which includes a profit-share scheme and equity ownership in the respective boutiques,” said Hywel George, Omig director of investments.
Coronation offers staff members a share of 30% of its pretax profits in bonuses — a “contractually binding” provision that has come under fire from shareholder activist Theo Botha amid slowing revenues caused by a R15.3bn slump in net client flows for the 2015 financial year.
In 2015, Omig enjoyed R7.3bn in cash flows from institutional clients, while retail customers contributed R6.1bn, according to George. “The bulk of the flows came from South African investors,” he said.
Institutional clients invested R2bn in global assets, while retail clients invested R1.8bn.
A Coronation representative said the team members had resigned with effect from the end of July, but they could not compete with Coronation for up to nine months. “(This) prevents them from competing in the market until May 2017.”
Coronation had handed over the stocks they covered to “members of the broader investment team of 62 experienced professionals”.
“Coronation has a number of analysts who scrutinise companies in key emerging market sectors. As such we already have the necessary capability to ensure seamless coverage in the emerging market universe. Coronation will look to recruit three to four new analysts into the (global emerging markets) team over the near term.”