The local asset management industry is under huge pressure to offer international solutions and to lower their fees while doing right for their clients. Recent moves by Coronation and Prudential reflect some of these pressures.
The ten-year bull run in international equities combined with the poor performance of the JSE over the last five years has resulted in a growing interest among South African investors in offshore investing.
This is putting pressure on local fund managers to provide international investment skills to their clients – which is no small ask considering there are 3,530 stocks listed in the US alone – before one counts Europe and Asia – relative to the 350 listed on the JSE.
In the face of this trend local fund managers, big and small, have adopted different strategies. Some, like Absa, Nedgroup Investments and Stanlib have partnered with global firms – Schroders, Veritas and Columbia Threadneedle respectively – which bring global expertise to the party.
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Others like Coronation, Ninety One and Element Investment Managers have focused over many years on building an in-house capability, while some including Flagship, Rootstock, Northstar and Blue Alpha have concentrated almost exclusively on offshore investing.