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Alexforbes launches policy to back emerging black asset managers

Andries Mahlangu Markets Writer mahlangua@businesslive.co.za

SA’s largest pension fund administrator Alexforbes has launched a transformation policy to help emerging blackowned asset managers and stockbrokers to gain scale by giving them a share of investment opportunities.

SA’s asset management industry is still heavily concentrated, with the top 10 companies accounting for nearly 80% of total assets under management, indicating the journey that capital allocators still need to travel to change skewed patterns. Transformation is seen as one of the instruments to realise an inclusive society, after the socioeconomic disparities created by apartheid.

In a bid to play its part, Alexforbes said on Thursday the transformation policy will support select asset managers and stockbrokers with an emphasis on gender diversity to ensure more black females are included in critical strategic and investment decision roles.

The fund administrator said black asset managers have a strong ability to outperform, so need to be supported.

Start-ups and emerging black asset managers will be identified for support, allowing them to build appropriate track records and give them access to investment opportunities that may otherwise be inaccessible.

Qualifying start-up asset managers will have assets of less than R2bn at appointment and be capable of meeting mandate requirements based on either a track record as portfolio manager, or as members of an investment team who have shown successful and verifiable track records with previous asset management firms.

Selection criteria for emerging black asset managers and more established managers include having a track record not exceeding 10 years at appointment and assets under management not extending beyond R15bn, among others.

“This policy is an extension of our overall commitment to the transformation of the SA economy through broad-based BEE,” said Alexforbes Investments CEO Ann Leepile.

Alexforbes will require asset managers who have existing contractual agreements in its portfolios to allocate an increasing portion of its brokerage services to black-owned stockbroking businesses.

“We will allocate and direct our own brokerage to blackowned stockbrokers by allocating 15% to black-owned stockbroking businesses within the first year, increasing the allocation to 30% within three years and at least 40% within five years,” Leepile said.

Makwe Fund Managers chief investment officer Makwe Masilela welcomed the transformation policy, but said more still needs to be done to open up the industry to emerging black players.

“If truth be told, given where we are, any efforts to transform the industry are appreciated, but these should have been done a long time ago,” he said.

Ninety One, Old Mutual Investment Group, Stanlib Asset Management and Coronation Fund Managers are among the country’s largest private sector fund managers.

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2022-05-20T07:00:00.0000000Z

2022-05-20T07:00:00.0000000Z

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