Alexforbes annual retirement fund survey

Alexforbes, a leading financial services provider, has released its latest annual retirement fund survey, shedding light on the key trends and insights shaping the industry for the year 2022. The 29th edition of the survey, considered a standard source of information in the sector, highlights several important developments that are influencing the retirement fund investment landscape. We had the opportunity to speak with Janina Slavsky, the head of investment consulting at Alexforbes, to delve into the key highlights and takeaways from this year's survey. The survey underscores a growing emphasis on Black Economic Empowerment (BEE) capabilities within the market. Clients are increasingly seeking advisors and multi-managers with capabilities managed by majority black owners, reflecting a significant shift in investment preferences. Additionally, the survey indicates a strong overall growth in the industry, with a notable focus on Environmental, Social, and Governance (ESG) considerations. Asset managers are increasingly channeling investments into ESG capabilities, underscoring a broader industry trend towards responsible investing. Despite the increased allowance for offshore investments by the Treasury, fund managers are opting to remain close to a 30% allocation for offshore investments, indicating a prevailing preference for local assets. According to Slavsky, the decision to maintain a significant allocation to local assets is driven by the perceived value and attractiveness of South African assets in the current market environment. While the average offshore allocation is expected to increase to 35-40%, there is anticipated to be a wide range of allocations among fund managers, leading to a significant dispersion in returns. As fund managers reallocate their investments offshore, there is a notable impact on transformed managers in South Africa, creating a ripple effect within the industry. The survey also delves into the adoption of ESG principles by asset managers, with a focus on the adoption of the CRISA principles and signatories to the UN Principles for Responsible Investment (UN PRI). While there has been a steady increase in the adoption of responsible investing principles, there remains variation in the extent to which managers engage with international standards such as UN PRI. The industry is abuzz with discussions around further enhancing ESG measures, with potential future developments including the evaluation of portfolios based on criteria such as carbon emissions. However, the lack of standardization in ESG metrics poses a challenge, necessitating a continued reliance on existing high-level indicators like CRISA and UN PRI. Despite the ongoing debate, there is optimism for significant advancements in the ESG space in the future, potentially revolutionizing the way investments are assessed and managed in the industry.