Alexforbes unveils 2024 Manager Watch Survey

Alexforbes recently released the December 2024 edition of its Manager Watch Survey, offering key insights into the evolving South African asset management landscape. In an exclusive interview with CNBC Africa, Janina Slawski, the Head of Investment Consulting at Alexforbes, shed light on the notable shifts observed in the investment management sector, particularly the rise of multi-managers within retirement funds. This trend is fueled by a move towards umbrella funds, with trustees opting to appoint multi-managers for investment strategies. As a result, Alexforbes has witnessed a significant increase in assets managed under this model, reflecting a broader industry trend towards outsourcing decision-making to specialized managers. Slawski emphasized that this trend is likely to continue as more retirement funds gravitate towards the multi-manager approach, considering the complexity of the landscape. A key highlight of the survey pertains to the dominance of major players like 91 and Stanlib in terms of assets under management. While these industry giants remain pivotal in various investment strategies, the survey also spotlights emerging themes such as the growing preference for majority black-owned managers and passive investments. The dynamic nature of the industry is evident in shifts towards diverse asset allocations, underscoring the evolving preferences of retirement fund managers. Transformation remains a central theme in the investment industry, with a focus on Broad-Based Black Economic Empowerment (B-BBEE) ratings. The survey revealed that 52 out of 79 asset managers surveyed are now rated at level one triple BEE, indicating a positive trajectory in fostering diversity and inclusion. Slawski highlighted the ongoing efforts of managers to improve their BEE ratings, with many clients demanding higher ratings and a strong emphasis on majority black ownership as part of their investment strategies. Delving deeper into the challenges faced by managers seeking to elevate their BEE ratings, Slawski noted the need for extensive changes across organizational structures, procurement practices, and workforce composition. Achieving a higher BEE rating entails strategic shifts in expenditure towards transformed providers and a concerted focus on augmenting diversity at all levels of the organization. The journey from level two to level one necessitates significant transformations that encompass various facets of the asset management business. The survey also highlighted strategic insights into investment performance, particularly in the backdrop of global market volatility. A notable trend observed was the increased allocation towards offshore investments, driven by prudential guidelines allowing for higher exposure. Successful managers were those adept at navigating offshore allocations and strategically balancing local and offshore equity investments. Slawski emphasized the importance of active equity management in boosting overall investment returns, alongside prudent decision-making in selecting the right offshore counters amidst changing market dynamics. Looking ahead, Slawski hinted at the imminent challenges in capturing the current market landscape in the next survey cycle. Given the lag between data collection and publication, timely reflections of recent market shifts pose a significant hurdle. To address this, Alexforbes releases a broader suite of monthly surveys covering various asset classes to provide up-to-date insights on market trends. The volatile market conditions underscore the critical role of effective investment strategies in navigating uncertainty and capitalizing on emerging opportunities. In conclusion, the 2024 Manager Watch Survey by Alexforbes offers a comprehensive analysis of the South African asset management industry, highlighting key trends, challenges, and strategic imperatives for investment managers. The evolving landscape calls for adaptability, diversity, and astute decision-making to thrive in an increasingly competitive market environment.