As the curtain falls on 2024, we look back at some of the main corporate activity, the high-profile appointments and the job moves in the local asset management industry over the year.
More consolidation
Ninety One buys SIM
In a big surprise to the local market, Sanlam and Ninety One jointly announced the transaction. Ninety One will take over £17 billion (R400 billion) of assets managed by Sanlam in the UK and South Africa under a tie-up agreement between the South African investment giants.
Ninety One has done well to grow its assets internationally, leveraging a combination of its scale and investing in its offshore investment teams. From our discussions with Ninety One and Sanlam, the move is a natural progression given the long-term relationship between the two firms. Following the change to Regulation 28 whereby pension plans can invest 45% offshore, this could be the right direction for Sanlam, given the strength of Ninety One’s offshore capabilities.
With more assets moving offshore, the merger could be the start of more to follow. The merger can also be viewed as strategically smart, with Ninety One gaining access to Sanlam’s extensive distribution network and established umbrella fund. Investors will watch the merger of the SIM Investment teams into Ninety One closely as integration challenges may arise, with differences in corporate culture potentially being a hurdle.
Under the agreement, Ninety One will take over all the issued share capital of Sanlam Investment Management Proprietary Limited (SIM). It will also become the permanent investment manager to Sanlam Investments UK. In return, Sanlam will receive a 12.3% equity stake in Ninety One. The Sanlam UK investment teams included in the agreement will move over to Ninety One when the deal is completed.
There is a concern this merger between two of the largest asset managers could lead to market concentration.
The Competition Commission must still approve the merger and could delay or halt the deal if it believes the merger would result in anti-competitive outcomes. This is clearly not a ‘done deal’ after the Competition Tribunal recently, to everyone’s surprise, blocked Vodacom Group’s deal to buy a stake in Remgro’s fibre businesses. The government is now seeking to overturn the decision and allow the merger to proceed, according to the appeal document seen by Bloomberg News. The industry is largely supportive of the Vodacom deal, as there is an agreement that consolidation is needed for future growth prospects.
Hendrik Toit, the CEO of Ninety One says that the Commission should view the proposed deal as a substantial vote of confidence in SA and as good for the ecosystem. The transaction will support local investment businesses and allow them to compete with larger offshore investment firms, which attract investments from SA investors, often without substantial local operations, and not contributing as much to the local economy.
Anchor Capital and UK-based Credo merged
In November 2023 Anchor Capital announced they would be merging with UK-based wealth manager, Credo Wealth. The combined assets under management of the two firms will be more than R230 billion. In April 2024, the Competition Commission approved the merger of the Anchor Group and Credo Wealth.
Credo provides wealth management services to predominantly high-net-worth clients and operates a global investment platform. The business has about £4.6 billion in assets under custody. This, together with Anchor’s R120 billion in assets will almost double the size of the business.
-Coronation wins court case
The Constitutional Court found in favour of Coronation in its protracted battle against the South African Revenue Service (SARS). Coronation had almost R800 million worth of tax debt hanging over the its head. The matter, which has been dragging on since 2012, relates to South Africa’s controlled foreign company rules and the foreign business establishment tax exemption.
Tax commentators have called the Constitutional Court judgment “clear, smart and well-reasoned”. It brings an end to the protracted battle between Coronation and SARS.
Biggest industry moves
M&G: Anne Leepile joins from Alexforbes
M&G Investments Southern Africa has appointed Ann Leepile as its new Chief Executive. Anne was previously the Chief Executive at Alexander Forbes Investments. She left the employment of Alexforbes on 1 November and will assume the new role early in 2025.
Anne comes with a strong track record in portfolio management and global manager research. She will be based in Cape Town and report to Joseph Pinto, CEO of M&G Asset Management and the M&G Investments Southern Africa board.
Her appointment follows the resignation of Chris Sickle, who left the business at the end of May. He was with M&G for five years and was their CEO since November 2021. Marius Botha, the Group Chief Risk Officer, took on the role of interim Chief Executive Officer.
With Anne’s appointment, Marius will return to London, where he will resume his role as Chief Risk Officer.
PSG: new CIO and Anet Ahern to step down
John Gilchrist assumed the role of Chief Investment Officer at PSG Asset Management from March. He succeeded Greg Hopkins who held the position for more than a decade from 2012. Greg has transitioned to the role of Deputy CIO, a position previously held by John. To ensure a smooth handover, Greg and John served as joint CIOs from November 2022. During this period, they continued to manage their respective funds, with Greg focusing more on offshore funds
The business also announced that industry stalwart, Anet Ahern is to step down as CEO. This will take place in May 2025, when she will subsequently transition to the role of Chair. Over the next few months, Anet will hand over the reins while preparing for her new role, where she will oversee several boards. She has led the business since 2013 and has steered the company through significant growth and market changes.
Lyle Sankar, the current Head of Fixed Income, will succeed Anet, marking a pivotal change in leadership for the business. He has 11 years of experience at PSG and is expected to build on Anet’s legacy, while introducing innovative strategies. His previous roles include managing various income funds in the business and business development at Coronation Fund Managers.
Ninety One:
Duane Cable has been appointed as the new CIO for Ninety One, South Africa. In his new role, he will oversee the SA investment platform and collaborate with the global CIO office, while continuing his portfolio management duties, which include managing the absolute returns portfolios.
Ninety One also appointed Sangeeth Sewnath as Managing Director of the American division. He is now based in New York, overseeing institutional and adviser-client engagement and driving regional strategy. Sangeeth previously headed up the team in South Africa.
OMIG: MD resigned
During the year, Khaya Gobodo resigned as Managing Director of Old Mutual Investments. Chief Risk Officer, Zulfa Abdurahman, was appointed as interim Managing Director.
Futuregrowth: hires new CEO
In November Futuregrowth announced that Shaun Harris will officially take up the role of CEO from 1 January 2025. Shaun was the Head of the Institutional Client Group for RMB’s global markets division. He has been working closely with Paul Rackstraw who will retire as Managing Director on 31 December 2024, but will remain with Futuregrowth in an advisory capacity.
In conclusion: consolidation…more is expected
During 2023 Aluwani acquired 100% of Afena Capital and more recently, the heads of First Avenue Investment Management and Northstar Asset Management expect the firms to formally merge by mid-2026.
The larger consolidations – Anchor/Credo and Ninety One/Sanlam – point to changing dynamics in the industry. In addition to the change in Regulation 28, the investment industry faces numerous challenges including:
These shifting factors mean that asset managers need to rethink traditional strategies to remain competitive. Consolidation appears to be a natural response to mounting regulatory pressures and the need for greater economies of scale. However, it also raises questions about market concentration and the potential loss of diversity in investment approaches. Therefore, there will be much to stay on top of in 2025.