FirstRand outfits toast Morgan Stanley deal

Ashburton, the asset management arm of FirstRand, and FNB Wealth and Investments have partnered with Morgan Stanley Investment Management (MSIM), as SA’s most valuable banking group ramps up its strategy to fine-tune its global capabilities.

“The collaboration will strengthen the international services offered to Ashburton’s and FNB Wealth and Investments’ South African clients [who] stand to gain from MSIM’s expertise in research and portfolio management within global equity markets. Additionally, the partnership provides MSIM with access to new markets in Sub-Saharan Africa, where FNB has an established presence,” the entities said on Monday in a joint statement.

Ashburton has about R140bn of assets under management, making it one of the smaller players in the SA context.

Last year, Ashburton CEO Duzi Ndlovu told Business Day the company planned to grow “exponentially” in the next three years. It said it would do so by scaling its equity, multi-asset, fixed income and global capabilities.

Ndlovu, who took the helm in 2022, said part of the growth blueprint was widening its distribution footprint and fine-tuning its global acumen.

Reflecting on the partnership with MSIM, which has about $1.4-trillion of assets under management, Ndlovu said both the company and FNB Wealth and Investments benefited from MSIM’s research and portfolio management in global equity markets.

“As a business, we have been preparing for a partnership of this magnitude for a while. We have strengthened our distribution capabilities and cemented a stable Ashburton investment team that is focused on investment excellence.

“Our investment team under Patrice Rassou’s guidance has established a credible local equity and multi-asset track record to add to our successful fixed income and credit range. This partnership is the next step in enhancing our solutions to better meet clients’ needs,” Ndlovu said.

His FNB Wealth and Investments counterpart, Bheki Mkhize, was equally elated at the partnership with the US-based firm.

“Through this strategic initiative the company will be able to enhance its sustainable investment solutions in the market. This partnership will not only help us to strengthen our global capabilities but also ensure that we provide our clients with sustainable solutions aligned to their long-term goals.”

Ashburton’s size means it is much smaller than rivals Stanlib, owned by Standard Bank, and Coronation, which each have more than R600bn assets in their custody.

Nedbank and Old Mutual too have sizeable asset management businesses.

The country’s two largest asset managers are Ninety One and the Public Investment Corporation, with assets under management north of R2.5-trillion.

Ashburton was acquired by FirstRand in 2013, filling the gap left by the unbundling of Momentum in 2009.

Local investors have been expanding their offshore exposure after the National Treasury’s decision to allow local pension funds to invest up to 45% overseas.

Ruairi O’Healai, MSIM’s co-global COO, said the agreement with Ashburton and FNB Wealth and Investments was a natural progression as the company had worked with Rand Merchant Bank, a FirstRand unit.

“We are, therefore, pleased to further expand our relationship with the broader FirstRand group through a new partnership between MSIM, Ashburton and FNB, which will provide local investors access to our market-leading investment solutions.”

Partnerships between local players and global asset management majors are nothing new.

Last month, Derrick Msibi, CEO at asset manager Stanlib, told Business Day the company’s partnership with JPMorgan Asset Management has provided competitive solutions for its clients wishing to invest offshore.

Msibi said that while the partnership, forged three years ago, was not transactional in nature, it had proved to be a strategic move that brought together JPMorgan’s global reach with Stanlib’s knowledge of Sub-Saharan Africa.

khumalok@businesslive.co.za