INVESTOR’S NOTEBOOK STEPHEN CRANSTON

Many asset managers, following the success of Coronation and Allan Gray, now claim to be consistent, and singlephilosophy. Only a few, such as Foord, fish in multiple ponds to add value. But only Investec Asset Management successfully offers a true department store of different offerings, making CE Hendrik du Toit the Mr Selfridge of his age. To his critics, Du Toit is in the business of offering fads. He made some money from the Internet boom with his Wired Index and Wireless World funds. He started the first Value fund in SA in 1997 and he and his colleagues who have owned the fund from the beginning have done well — it is 4,6% ahead of the Alsi since inception, but people who got on the value bandwagon much later on are regretting it as over three years it is 8,4% below the index and barely made cash returns. But I admire Du Toit’s loyalty in supporting its fund manager, John Biccard, who is sticking to his philosophy. Investec, at the top, is dominated by Du Toit loyalists with at least 15 years’ service such as Kim McFarland, the chief operating officer, Mimi Ferrini and John McNab, the co-chief investment officers. And they are finally getting some direct equity in the business now that the group has sold 15% to the top 40 executives. In a recent meeting in London, Du Toit told me that maybe he had put too little emphasis on Investec’s more cautious equity capability, run by Chris Freund. It gives a more predictable series of returns than Investec Value. I am sure Freund would not like to be thought of as a middle of the road manager but he has a better balance of shares: his top three shares are FirstRand, Old Mutual and Richemont; Biccard’s are Steinhoff, Amplats and AngloGold Ashanti. It is not surprising that Du Toit sees room for a more pragmatic, more benchmark-aware — and less volatile — fund. Du Toit has a knack of spotting investment trends; he has had a huge hit with emerging market debt, in which he has attracted more than US$20bn with a client base that stretches from the Nordics to Chile. Unlike the large American houses, Investec specialises in debt issued on local currency rather than in dollars. In a yield-starved world, the portfolio has offered an annual return that has run as high as 9,3%. It was an area that proved far less competitive than emerging market equities, where Investec is building a solid track record.