Tributes pour in for humble pioneer Allan Gray

Of all the words that could be used to describe Allan Gray, the founder of the firm that carries his name, perhaps the most apt is “enigmatic”.

Although his company’s brand is one of the most recognisable in the country, it is not widely known that there was a real Allan Gray behind it.

“Some people even wondered if he really existed, because they never saw him or heard him,” says Delphine Govender, who spent more than a decade at Allan Gray before starting her own firm, Perpetua Investment Managers. “That is so unusual compared to the leadership we see today, but he was nevertheless hugely influential.”

Gray, who launched Allan Gray in 1973, died this weekend in Bermuda at the age of 81.

The man who founded South Africa’s largest asset manager was a very private individual who was renowned for his humility. His role as a pioneer in reshaping the local investment industry cannot, however, be exaggerated.

“He was, in a way, the great disruptor,” says Sandy McGregor, a portfolio manager who has worked at Allan Gray since 1991. “When he arrived on the scene in the early ’70s, the quality of investment management was, by modern standards, rather lax.

“He upped everyone’s game because he was so much better at it,” McGregor explains.

When Gray launched his firm in Cape Town, the professional investment industry was the sole preserve of banks and insurers. There were no private asset managers in South Africa, but Gray saw an opportunity to do things differently.

“It wasn’t as though he had anyone he could refer to as a role model. Starting Allan Gray was hugely trailblazing,” says Govender.

He also brought an approach to investing that had not been seen in this country, which in many ways was the true birth of active management in the local market.

“Allan Gray started building portfolios from blank sheets and only buying the stocks that they believed in rather than the ones that would minimise under-performance,” Govender says.

“These things were happening in the US, but there was nobody here doing anything similar.”

This may seem self-evidently necessary for managers to do now, but it wasn’t the way asset management worked in South Africa before Gray set up his company. And this new perspective didn’t remain just within Allan Gray.

“He was a very good mentor,” McGregor recalls. “Over time there was quite a big diaspora of Allan Gray people around the market, so his ideas spread quite rapidly across the system.”