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Why asset managers are not in best of health
While there are varied reasons for the bloodbath asset management companies are no longer printing cash
You would have been better off buying Coronation’s shares than putting your money in its funds until a short while ago. The asset manager’s share price rose a staggering 1,216% between January 2010 and its peak in December 2014, delivering an annualised return above 67%. Coronation’s funds, on the other hand, have recently underperformed, which led to net outflows of R79bn over the year to September 2016. This reflects in its share price, which is down 41% since its 2014 peak, 8% lower over the past 12 months and 3% weaker in 2017. Coronation’s much smaller rivals have experienced a far more aggressive sell-off in their stocks. Sygnia is down a whopping 41% in 2017, taking its market capitalisation to R1.5bn, with Anchor Group down nearly 50%, pushing its market capitalisation below R1bn. Peregrine Holdings, with a market capitalisation of R6.4bn, is 5.6% weaker.While there are varied reasons for the bloodbath — for instance, Sygnia’s recent rights issue weighed on its share price —...
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