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Manager Pulse: Insights on developments within the asset management industry

Manager Pulse Winter Edition – July 2021
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MOVERS AND SHAKERS

 

Counterpoint Asset Management – CIO appointment

 

Counterpoint Asset Management has appointed Brian Pyle as Chief Investment Officer effective 1 August 2021. Paul Stewart will hand over the CIO’s responsibilities, after acting as both CEO and CIO following Sam Houlie’s departure at the end of March 2021.

 


Brian spent most of his 27 years of financial services experience at Old Mutual Investment Group (OMIGSA), having worked as the Head of Equity Research with both equity research and portfolio management responsibilities. In his role as CIO for Counterpoint, Brian will oversee the multi-strategy investment offering of the combined businesses – Counterpoint, Bridge and RECM – including the management of the overall investment process and monitoring overall portfolio risk management. Counterpoint manages approximately R8 billion in assets.

 


Futuregrowth – new hires, promotions, and departures

 

Futuregrowth hired two investment analysts, Khumo Keebine and Tshepo Shabalala. They bring industry experience of five and nine years respectively. There have also been promotions in the team, with Yunus January and Thina Manga being promoted to portfolio management. At the same time, Thato Khaole (credit analyst) and Luzuko Nomjana (investment
analyst) left the business during the quarter.

 

 

Perpetua Investment Managers – analyst departure

 

Investment analyst, Siya Mbatha left the Perpetua team at the end of May. Her responsibilities will be shared among the remaining analysts given the generalist investor approach that the company follows.

 

 

Prescient – team changes

 

In May and June 2021, Prescient announced four newcomers to the investment team, as well as two resignations.

  • Mayuresh Kulkarni has joined as a portfolio manager in the Income and Cash team. He joins from Fairtree Capital, where he gained six years’ of experience as a fixed income quantitative analyst in the hedge fund team
  • Vishal Rama joined as a quantitative analyst reporting to the Head of Bonds, Reza Ismail. Previously, Vishal worked at Prowess Investment Managers as a trainee quantitative analyst.
  • Odwa Sihlobo joined as a portfolio manager and co-head of the Multi-Asset team, alongside Rupert Hare. Prior to joining PIM, he was at Prescient Securities for six years.
  • Luzuko Nomjana joined as a portfolio manager in the Infrastructure team. He will be responsible for driving infrastructure investment propositions and will work closely with the Credit team under the leadership of Conway Williams.
  • Jessica Phalaphala, who worked as a quantitative analyst on bonds with Reza Ismail and was Chair of the ESG committee, has left for a career opportunity in Switzerland.
  • Jean-Jacques Duyvene De Wit, equities portfolio manager, has left to take up an opportunity with a crypto consulting firm.

 

Prudential – Fixed Income team bolstered

 

Bulent Badsha joined the Prudential Fixed Income team as a fixed income analyst on 1 June 2021. He joined from Sanlam Alternative Investments, having worked as a hedge fund manager. Reza Fakie, a quantitative analyst, left Prudential at the end of June to peruse other opportunities.

 

 

STANLIB – franchise resignations

 

Ann Sebastian, a portfolio manager in the STANLIB Index Investments team, resigned to pursue other opportunities after almost nine years with the company. Currently Rademeyer Vermaak, the Head of Portfolio Management. has taken over her portfolio management duties.

 

Vaughan Henkel, a portfolio manager in the STANLIB Multi-Strategy Investment team – previously STANLIB Absolute Return – resigned to pursue a research role at PSG Wealth.

 

Vanessa Pillay, Head of Corporate Cash Solutions resigned from STANLIB to pursue an exciting start-up opportunity. Tracy Coetzer, Head of the STANLIB Institutional Distribution team will caretake Vanessa’s role until a suitable replacement is found.

 

 

Taquanta – corporate activity

 

Taquanta Investment Holdings (TIH) acquired Ngwedi Capital Holdings (NCH) effective April 2021, which sees Ngwedi Investment Managers (NIM) being merged into Taquanta Asset Managers (TAM). In total, four people from NIM – Monei Pudumo-Roos, Raphael Nkomo, Farzana Bayat and Teresa Lu – have joined a business with a staff complement of 45.

 

The merged entity improves Taquanta’s empowerment credentials, with transformation now evident across all levels – Board, Exco and Investment Team. Black ownership is also expected to increase over time. The Taquanta founders, who currently own 40% of TIH, have committed to selling down approximately 50% of their shareholding and extending ownership to the joining Ngwedi members and other staff members.

 

Raphael Nkomo has taken over as Chief Investment Officer from Ray Wallace. Ray will remain involved in portfolio management, specifically responsible for cash-related mandates.

 

 

GAINERS AND LOSERS

 

The South African Multi-Asset Low Equity category average returned 2.4% over the past quarter.

 

The top-performing funds in the category were Counterpoint SCI Stable (7.8%), Kruger CI Prudential (5.1%) and Plexus Wealth BCI Conservative (4.9%). Over the past twelve months, the top performers were Kagiso Stable (24.5%), PSG Multi-Management Cautious (21.8%) and PSG Stable (21.4%).

 

Local equities (JSE Capped SWIX) and local bonds (ALBI) returned 0.6% and 6.9% respectively for the quarter.

 

The STANLIB Balanced Cautious was the biggest gainer over the past twelve months, increasing AUM by R 5.9 billion, followed by Ninety One Cautious Managed with R 3.2 billion.

 

The biggest losers were Prudential Inflation Plus and Allan Gray Stable. These are two of the largest funds in the category and together, account for almost 24% of the category.

 

The block chart below illustrates the market share within the SA Multi-Asset Low Equity category. Six funds make up 50% of the category.

 

 

South African Multi-Asset Low Equity category – market share

RESEARCH FOCUS: THE ROLE OF LARGE INVESTMENT HOUSES IN THE RISE OF BOUTIQUES 

 

Over the past two decades, the South African asset management industry has experienced a substantial rise in boutique asset managers. We reflected on how the landscape has influenced their journey and how they, in turn, have shaped the environment. In this first edition of a three-part series, we specifically looked at the large investment houses’ contribution to this microcosm of the asset management industry.

 

Some of the insights we drew are around how the large firms have been a breeding ground (as illustrated in the figure below) for the boutique managers we see today. We look at how much of what the boutique managers have become was written in their ‘genes’ – originating from large firms – and how much appeared from elsewhere.

 

In exploring the traces of their shared DNA, we also highlight how the boutique managers are not subjected to forced inheritance and are able to select their preferred genes while creating a new life for themselves. To read the full article, please click here.

 

Figure 1: A breeding ground*

 

Figure 1 - A breeding ground

 

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