Black asset managers get royal treatment
Transformation is one of the biggest challenges facing the local asset management industry, with black asset managers still owning only 4% to 5% of assets under management in the country.
Chris Meyer, the CEO of RMI Investment Managers, says that about 28% of the boutique managers in South Africa are black – but the challenge remains to make these businesses sustainable.
Given the clear commercial opportunity in empowerment asset management, RMI Investment Managers has set up a separate company focused on this market. Royal Investment Managers, which has Royal Bafokeng Holdings as its main shareholder, will partner with predominantly black-owned asset managers.
“The reason we decided to set up a separate entity with Royal Bafokeng is that we think the business does need its own identity and majority black ownership,” Meyer says.
The affiliate model used by both companies is to take minority equity stakes in boutique asset managers and then support their growth and
There are probably only three property managers in the country who are of high quality that deliver consistent alpha to clients, and Sesfikile is one of them.
Kabelo Rikhotso Royal Investment Managers CEO
Royal Investment Managers recently completed its first transaction – a stake in specialist listed property managers Sesfikile Capital that has built up an exceptional reputation in a short space of time. It gives Sesfikile a huge boost in its plans to grow its global and retail business.
“Royal wants to partner with affiliates that share our values and culture,” says Royal Investment Managers CEO Kabelo Rikhotso. “There are probably only three property managers in the country who are of high quality that deliver consistent alpha to clients, and Sesfikile is one of them.”
Rikhotso says that Royal Investment Managers has plans to partner with around six to eight affiliates over the short term.
“So we will add a lot of value at a strategic level by sitting on our affiliates’ boards and helping to formulate strategies for these companies going forward.” – Patrick Cairns