For the final column of the year, it makes sense to go back to my old stomping ground — the fund management industry. I wrote the story of the large independent managers earlier this year in a book that is still in the shops.
The growth of the CIA, as they were known — Coronation, Investec Asset Management (now Ninety One) and Allan Gray — is now history. They remain successful businesses, but their domestic market share has peaked and is in structural decline.
One day a sequel about the next generation will be written. But the book publishers I have spoken to don’t see the compelling personalities yet. There is no millennial equivalent of Allan Gray on investment theory, or of Hendrik du Toit in business management.
Mandy Wiener asked me on Radio 702 why I had written about the CIA when they were no longer the best performers — by implication, past their sell-by date. The answer has to be: where are the other full-service investment managers that are all things to all people?
The most prominent next-gen firm must be Truffle Asset Management — not that its leadership can be classified as millennials. It was looking as if it were in trouble last year, because it was underinvested in the US market, but has bounced back in 2025 thanks to the weak dollar and a broadly disappointing US equity market.
It has a coherent team primarily drawn from RMB Asset Management, who have known each other for many years. I would rate Iain Power and Saul Miller highly as investment managers — though I am not going to award them the cheesy title of star managers. Inevitably this is a curse. Just look at how international “stars“ such as Neil Woodford, Terry Smith and Nick Train proved to be emperors with no clothes over the past few years.
Not that I am suggesting it isn’t useful to read investment gurus such as Benjamin Graham and Peter Lynch. Their books are still widely available, though often at a heavy discount these days.
Another firm that is prominent nowadays is 36One. There is some key man risk around its powerful chief investment officer, Cy Jacobs, but the firm is building an impressive track record that can be accessed in the retail market through the PPS Managed Fund unit trust.
Jacobs went through the methodology of this fund in some detail at the Sun City Investment Forum in March, and the firm undoubtedly has skills in asset allocation and stock picking. But there are no guarantees in unit trusts.
Fairtree operates on a more federal model with strengths in all major asset classes. But often its asset base is skewed to one or two products. It has had a huge equity fund, for example. Other large portfolios have grown through strategic relationships with the best-of-breed distributors mushrooming countrywide.
Nedgroup was followed by Sanlam’s Amplify and more recently by Momentum’s Curate — nothing to do with the curate’s egg, which is good in parts — and Old Mutual’s Symmetry, which is only now rolling out a range. Second-tier institutions such as PPS and Hollard also use a best-of-breed approach.
Abax’s relationship with Nedgroup stands out as a highly successful distribution relationship, despite it losing one or two mandates along the way, most recently the Nedgroup Rainmaker Fund. This went to Ninety One of all places, which is already a huge competitor of Nedgroup, but such are the oddities of the South African unit trust industry.
Another gorilla along the lines of the CIA might not emerge over the next 10-20 years. There has been a trend towards niche firms.
I am not sure if the Public Investment Corporation (PIC) would still like to see a “black Coronation”. The PIC provides a lifeline to many black-owned asset managers — arguably too many, as South Africa has too many subscale firms. But thankfully it has not forced firms to merge. There are big egos in asset management. This is puzzling considering how often they fail in their main job: to make more for their clients than they would get putting their savings in index funds.
It should rather look for more niche firms run by people outside the usual fund management cliques. Most fund managers still belong to the same half a dozen cycling clubs in Cape Town.
It is good to see more females and people of colour who have different lifestyles. I have been a consistent supporter of a handful of niche firms that just happened to have diverse ownership, such as Perpetua and Aeon. I rated their chief investment officers in their previous lives at established firms.
Delphine Govender was a senior portfolio manager at Allan Gray before forming Perpetua (not to be confused with the British firm Perpetual, where fallen angel Woodford was the star manager), and Aeon founder Asief Mohamed was chief investment officer of Metropolitan Asset Managers. It was also a strange choice of name, as it is pronounced like the enormous global insurance broker Aon.
But colour/ethnicity is just one form of diversity. Maybe it is time to stop insisting that the chartered financial analyst (CFA) qualification is the compulsory union ticket to become a fund manager. It encourages groupthink. Years ago, fund managers and investment consultants weren’t necessarily even accountants or actuaries but engineers, even PhDs in English literature.
I certainly find there is very little for characters or eccentric types in today’s fund management industry.
• Cranston, a financial journalist, is the author of ‘The Mavericks’, a new book about South African fund management.
