JOHANNESBURG - Black-owned asset management firms increased their total assets under management by 18percent to R579billion by June 30, although their share of the total estimated South African savings and investment pool is only 11percent.
The 27four Investment Managers BEE.conomics 2019 report released last week showed an increase from 48 to 50 black-owned asset managers across the public and private markets.
The proportion of private-market respondents has been increasing in recent years and now made up 30percent of the dataset, up from 18 percent in 2017.
The 18 percent jump in assets under management was largely as a result of Prescient Investment Management qualifying for participation following their recent broad-based black economic empowerment transaction.
Prescient and Aluwani Capital Partners represent the two companies managing assets of between R50bn and R100bn.
The size of the total savings and investment pool in South Africa, estimated at R8.1 trillion, is made up of three main sources: retirement funds, collective investment schemes and life company assets. Added to this are assets held by short-term insurers and medical schemes, which represent a small component of the overall pool.
The universe of black-owned asset managers comprises a small number of large firms and a long tail of mid-sized and small enterprises.
Private equity has historically been dominated by a few large firms, but spin-outs of teams from within these firms, as well as the formation of new teams from within banks and corporate finance houses, have seen many new managers come to market.
27four managing director Fatima Vawda said the lack of transformation in the asset management industry was due to a variety of factors, despite retirement funds such as the Government Employees Pension Fund largely being in the hands of black asset managers.
“The problem is that all state-owned enterprises and BRICS funds have taken into consideration black asset managers, but you don’t find this lower down the spectrum within the private sector and the man on the street,” Vawda said.
“Brokers that advise the man on the street do not put black asset managers upfront, and the man on the street seeking investment advice does not ask the right questions.”