10 facts about South African fund managers
Patrick Cairns Moneyweb
Glacier by Sanlam analysed SA’s asset management industry, uncovering fascinating stats. The survey covered 146 funds across multi-asset low-equity, medium-equity, high-equity, flexible, and general-equity categories. 1. Almost half of all fund managers obtained undergraduate degrees from UCT While UCT is an excellent university with a strong financial programme, and the asset management industry is concentrated in Cape Town, this raises diversity questions. 2. 49% of all fund managers are CFA charter holders, yet on average they underperform those who aren’t On average fund managers with a CFA qualification underperformed (10.24%) those without one (11.59%) over the past five years. “I think there is so much power in diversity generally. From a recruitment perspective asset managers need to look at diversifying their UCT and CFA
risk,” says Leigh Kohler at Glacier. 3. Only 18% of investment professionals are female Less than one in five investment professionals is a woman. In the entire sample only one woman held the position of portfolio manager. 4. Average employment equity (race) representation is 31% While there’s a commitment from many companies in the industry to improve their employment equity, it still appears to be happening more slowly than many would like. 5. The average size of an investment team is 11 This study suggests any team of 10 people or fewer in SA can be considered small and 12 plus large. 6. Big teams can outperform Glacier analysed the sizes of investment teams against their five-year standard deviation and performance numbers. This didn’t reveal the optimal team size, but that it’s possible for any sized team to perform well. 7. Confusion around who makes
decisions affects returns If there’s an investment team behind a fund, there must be clarity on who makes the final portfolio construction decisions. Glacier found there are only small differences in performance whether those decisions are made collectively or by a single individual. When it’s a combination of both, performance suffers. 8. Managers without a model
underperform Only 3% of the sample said they
use a model when investing and instead rely entirely on gut instincts; their performance is significantly worse than for managers with proper processes in place. 9. Most managers invest in their
own funds Overall, Glacier found 85% of investment professionals invest in the funds they manage. Only 26% invest more than half of their discretionary wealth in their own funds, and 3% invest all their discretionary wealth. 10. Most fund managers own
shares in their company Glacier found 81% of investment professionals are shareholders in the asset management companies they work for.
Less than one in five investment professionals is a woman