investor’s notebook
STEPHEN CRANSTON: Retaining momentum
It makes sense for life offices to keep some asset management capability
I don’t know a single independent fund manager who doesn’t dream about the demise of the tied houses. There is plenty of evidence that fund managers tied to life assurers do not have the same long-term returns as the independents — even ones as large and potentially lumbering as Coronation, Allan Gray and Investec. But it makes sense for life offices to keep some asset management capability: it still has to manage its own balance sheet and annuity book so why give away margin to some smug, self-important outside shop? I know that around 2000, Sanlam considered disbanding its perennially underperforming asset manager. It even sold the business to its third-tier banking operation and changed its name to Gensec, but it didn’t fool anyone. Few would have expected that Momentum would be the first major life office to move out of traditional asset management. It played the same trick as Sanlam, naming its asset manager RMB, even though it was never part of Rand Merchant Bank. But in RMB’s...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.