Rob Southey, head of asset consultants at Alexander Forbes, says of over 130 South African asset managers, only 42 are black-owned. Of these, only two firms – Taquanta and Aluwani – manage in excess of R50 billion in assets. Twelve of them have amassed between R5 billion and R50 billion, while 28 manage less than R5 billion.
South Africa’s biggest asset managers manage in excess of R400 billion each.
“It is a bit of an indictment of the industry that we are so slow [to transform].”
None of the top 10 South African asset managers are black-owned, with five asset managers managing 52% of industry assets. According to 27Four Investment Managers’ 2016 BEE.conomics survey black asset managers only manage about 5% of the overall South African savings and investment industry.
The issue around transformation is often an emotive one, which is complicated by the methodology used to differentiate asset managers.
Southey says while one real black manager may have a poor B-BBEE rating, another manager may have a very good rating, but not really be regarded as a black manager due to the inner workings of the rating system. It should therefore be used with caution.
“It is nice to have and it is good to see but it doesn’t necessarily always tell the whole story.”
Regulation 28 of the Pension Funds Act notes that trustees should give consideration to black managers or B-BBEE, but does not explicitly define the term.
An analysis of the performance of black-owned managers in the Alexander Forbes Manager Watch Surveys for the three years to December 31 2016 in the local equity, bond and listed property space show that up and coming black managers are performing in line with other mainstream managers.
But black asset managers face various other obstacles.
