Picture: ISTOCK
Picture: ISTOCK

Business Day published an article on September 27 under the headline “Asisa will not back BEE targets for assets”.

The article confuses the concept of “prescribed asset” with  prescribed or compulsory allocation of assets to black asset managers. This misunderstanding — probably as a result of the sequence of responses to questions from the media — created the wrong impression that Asisa and the Financial Sector Transformation Council are opposed to giving black asset managers greater access to the market.

I would therefore like to set the record straight.

When the term “prescribed assets” is used, it is understood to refer to the government forcing the savings industry to buy government stock as well as bonds issued by state-owned enterprises (SOEs). Asisa will not back “prescribed assets” as this does not solve any problems for the country. It did not work when introduced by the apartheid government and would have equally devastating effects for the country should it be introduced now.

Asisa does, however, firmly support greater allocation of assets to black asset managers. The point needs to be made that a large proportion of the assets that can be allocated sits in the retirement fund industry and Asisa and its members have no influence over how and by whom these assets are managed.

The retirement fund industry holds assets of R3.6-trillion. The Public Investment Corporation alone manages R2-trillion of these assets on behalf of the Government Employees’ Pension Fund. Asisa is therefore in support of making the voluntary scorecard for retirement funds, which includes procurement targets, compulsory as this could result in greater allocation of assets to black-owned asset managers.

Also, Asisa’s large member companies are in a position to give black asset managers greater access to the market via their linked investment service provider platforms, umbrella funds and multimanagers. However, Asisa has no influence over this as it would be in violation of the Competition Commission rules. The decision to provide access to the market must therefore always be a business decision taken by individual companies.

Leon Campher
CEO of the Association for Savings and Investment SA (Asisa)