Investec unit in bid to shed ‘out of Africa’ image
The unit will compete with large global asset managers such as Blackrock and Vanguard
With only $141bn of assets under management, Investec Asset Management (IAM) says it will use its specialist active management capabilities to gain more global inflows.
The unit, which Investec announced in September would be split from the group and listed separately, will compete with large global asset managers such as Blackrock and Vanguard, who respectively manage $6.3-trillion and $5.1-trillion of assets on behalf of their clients.
Investec is viewed as a mid-sized manager that is trying to avoid being stereotyped as only an emerging-market specialist since it is domiciled in Africa.
"Clearly, we have a lot of expertise in emerging markets, but we also do a lot of other things. But looking at our asset growth outside SA, I think we are overcoming that," Richard Garland, MD of IAM’s US operations, said in Johannesburg.
Even local financial advisers still see Investec as a SA company, which makes it difficult to convince them to allocate their investments to the company’s international portfolios, he said. More than $100bn of the assets the company manages are outside SA.
Garland acknowledged that the planned listing will put a bigger spotlight on IAM, but said Investec has the advantage of being recognised as a specialist in active asset management.
"Many of our competitors try and do everything; they are a supermarket. We are not. We are active managers; 100% of our portfolio is actively managed," Garland said.
"And our African business is unique. No global manager has what we have here."
Philip Saunders, co-head of the group’s multi-asset growth business in the UK, said while Investec is well aware of criticism of active asset management, it is the future for multi-asset class funds.
"Choosing between active and passive management might not be the most important decision given the change that’s taking place around the world right now," he said.
"Asset allocation is probably the most important decision investors will have to make going forward, and you have to be more active at every level in multi-asset classes."
Unlike other active managers, 92% of Investec’s global franchise fund is not tracking the benchmark, Garland said. "You can’t replicate what we do passively. That’s how you survive. That’s how we’ll survive."