Manager Insights
Movers and shakers – 2023 under review
Introduction
Annually, we provide you with major corporate activities and the movement of people in the local asset management industry – business happenings, shareholding structures and senior staff movements.
This also provides a platform to give recognition to some of the industry stalwarts that retired. Two respected individuals retired this year, Chris Freund from Ninety One and Henk Viljoen from STANLIB. We recognize that both won numerous awards over the years and devoted most of their professional career to helping clients achieve their financial goals.
Bok leadership lessons
The recent success of the Springbok rugby team – winning back-to-back world cups – offers valuable lessons for investment management businesses. Strong leadership, teamwork and collaboration, as well as diversity and inclusivity are key to success.
It is for this reason that our DFM research team continuously monitors business structures and team dynamics. We believe that diversity and team-based investment decision making contributes to successful investment outcomes.
It is never about the individual, it is about the team.
A summary follows of some of the important events we monitored throughout the year in our overall evaluation of the local asset management industry.
Main corporate happenings 2023 was a rather subdued year with regards corporate activity, especially in the context of the Sanlam Investment Management and Absa merger, which dominated corporate news in 2022.
Following a court battle that arose from a South African Revenue Services (SARS) review of Coronation’s international operations for the 2012 to 2017 tax years, the Supreme Court of Appeal (SCA) ruled in favour of SARS in February. This saw Coronation face an additional tax bill of approximately R760 million. The SCA ruling reversed a Cape Town tax court’s decision that had been in Coronation’s favour
Coronation has since applied to the Constitutional Court (ConCourt) to grant it leave to appeal the SCA ruling, which it also wants dismissed. They argue that the SCA erred in upholding the appeal in a legal document filed with the ConCourt.
In view of that, SARS responded to Coronation’s ConCourt leave to appeal. In a November practice note, SARS wrote that they believe Coronation’s net income from its Irish resident company is taxable in South Africa. SARS argues that Coronation
Global Fund Managers (CGFM) does not meet the requirement of a ‘foreign business establishment’ (FBE) as such functions are not outsourced to a company in Ireland, where CGFM is located
The outcome of the ConCourt case is likely to impact on multinationals with similar offshore structures. We have engaged with managers with similar offshore structures, and they are being proactive on auditing and reviewing the setup of their FBE’s.
During the year, Aluwani Capital Partners acquired 100% of Afena Capital. The Afena employees were all absorbed into Aluwani, including the six investment professionals.
We also saw a significant change in the shareholding within the Prescient Group. Prescient Holdings (Pty) Ltd provides solutions in asset management, investment administration and stockbroking. Staff in the business now own 25% of Prescient Holdings’ business, up from around 16%. In addition, another existing shareholder, Sithega, increased its economic interest in the business to 36%. This brings their total black ownership to approximately 69%. Both transactions were facilitated by Stellar Capital Partners, who sold their economic interest in the Prescient Empowerment Trust. We view the increase in staff ownership and the increase in black ownership as positive.
Local wealth and investment business, Anchor Capital founded 12 years ago, will become part of London based Credo in a R2.5 billion-merger transaction. The merger, which is subject to South African and UK regulatory approval, will create a combined entity with assets under management and advice of R230 billion ($12 billion). Anchor and Credo will each own 25% of the new company. Quasi-institutional shareholders will own the other half of the company.
Lastly, global financial services firm, Apex Group, acquired the Efficient Group. Efficient is the parent company of Boutique Collective Investments (BCI), a collective investments scheme manager for third-party branded portfolios, and Boutique
Investment Partners (BIP), an independent investment management and consulting firm.
Senior management and CIO changes
New CIO for OMIG
Siboniso Nxumalo has been appointed as the new Chief Investment Officer for the
Old Mutual Investment Group (OMIG). Siboniso became Head of MacroSolutions
in January 2021 after the merger of the Old Mutual Equities and MacroSolutions
businesses.
In addition, Old Mutual Wealth appointed Kieyam Gamieldien as the managing
director of Old Mutual Multi-Managers. Gamieldien joined the multi-manager from
OMIG, where he was the head of Customised Solutions.
Sanlam – several senior appointments
Nersan Naidoo, CEO of Sanlam Investments, resigned with his responsibilities taken
over by the incumbent CEO of Sanlam Investment Group i.e., Carl Roothman. Sanlam Investments Multi-Manager (SIMM), appointed two deputy CIOs, Suvira Bodha, Head of Alternatives, and Mark Phillips, Portfolio Manager. Their appointments signify the organisation’s forward-thinking approach and dedication to business continuity.
New domestic CIO for Foord
Nick Balkin was promoted to Chief Investment Officer (South Africa) at Foord. Nick has been with Foord for 18 years. Dave Foord continues in the role of Global CIO.
New CIO model for M&G
David Knee, previously CIO of M&G Investments Southern Africa, has moved to the M&G UK investments business as the Co-Deputy Chief Investment Officer of Fixed Income. In his new role, he will continue to work closely with the South African Fixed
Income team. M&G has implemented a new CIO model tailored to each investment capability, and has assigned a dedicated CIO for each area. Sandile Malinga, the current Co-Head of Multi Asset, will assume the role of CIO for Multi-Asset. Gareth
Bern, the current Head of Fixed Income, and Ross Biggs, the current Head of Equities, will take on the roles of CIO for Fixed Income and for Equities, respectively.
CIOs swapping roles – PSG
Greg Hopkins, PSG Asset Management’s incumbent CIO, swapped roles with the deputy CIO, John Gilchrist, effective January 2024.
Replacement for Jeanette Marais
Momentum Metropolitan appointed Ferdi van Heerden as the CEO of Momentum Investments. He replaced Jeanette Marais, who took over as the group CEO. From an investment perspective, Mike Adsetts’ acting CIO role was made permanent in July 2023, replacing Sonja Saunderson who left at the end of 2022.
New roles at Alexforbes
Alexforbes Investments promoted Senzo Langa and Lebo Thubisi to newly established roles of Joint Deputy CIO, both reporting to CIO, Gyongyi King. Langa and Thubisi have spent more than 10 years within the investments business in senior roles. Langa will be heading up portfolio management and Thubisi, manager research.
First CEO for Cogence
Lastly, Jonel Matthee, who was head of Sanlam Multi-Manager International following the Absa merger, joined Cogence DFM as its first CEO, effective January 2024.
Key Points
- Two stalwarts retire, leaving a legacy
- Coronation embattled in a court case over tax bill
- Changing the guard – several new captains to lead their respective teams.