More intentional support is needed to develop a South African investment industry that better represents the demographics of our country. Over the last decade we have seen increased attention on developing black investment firms, however, currently only 10% of South Africa’s total savings is managed by black asset managers.
To effect real change, more work and collaboration is required
RisCura believes that developing black firms in the industry is vital, which is why we have actively backed start-up and emerging black asset managers for over two decades with the ultimate goal of supporting transformation and diversity in the industry. This support has evolved into a discretionary offering: the RisCura Manager Development Programme. The programme aims to ensure that black asset managers are equipped to attract clients, with investment solutions to match. As part of this process the programme aims to support women-owned and led investment firms, while also looking for opportunities to upskill black investment professionals. This includes investing in alternative asset classes, which RisCura believes is an important component of growing diversity and the economy.
At the heart of our approach is our promise to Invest with Care
RisCura was started by entrepreneurs and has grown into a global investment firm. That experience provides us with useful skills to draw on and share, and it is part of our vision to help other firms go through their own growth process.
Our Manager Development Programme seeks to graduate fully-fledged asset managers who can compete not just locally but also internationally. There are many successes from the programme thus far, but it’s time to take that progress to the next level. RisCura sees the diversity journey like an educational curriculum – starting at Diversity 1.0 through to Diversity 4.0. No doubt there will be further levels to master as the journey continues.
Below we briefly look at the investment industry’s diversity journey (and RisCura’s) in these terms:
Diversity 1.0 is the beginning where the industry allocated funds to BEE investment holding companies. Through this phase we saw many of the early BEE deals during the pre-2000s.
Diversity 2.0 is where we saw focused involvement with launching black asset managers and partnering with them. Some notable examples of managers who were supported by RisCura are 27four Investment Managers and Afena Capital.
Diversity 3.0 is where we find ourselves currently with a focus on manager development and support, including product diversification into alternative assets. This phase of the journey has seen several “incubation” programmes being put in place to allocate capital towards start-up black asset managers.
Diversity 4.0 is the phase we need to be in as it represents successfully building an inclusive investment industry. It goes beyond simply supporting black firms but also supporting black skillsets. We need to go beyond the start-up phase, even if there is a risk of upskilling and losing qualified market entrants to entrepreneurial ambitions. We need to be intentional about also supporting black skillsets that do not wish to follow the entrepreneurial journey. This phase continues to focus on alternative assets – an area where we have seen underrepresentation of transformation and diversity.
Alternative assets such as private equity are well-recognised in other parts of the world and are delivering strong returns. Investing in a private company can also produce immediate diversity results such as creating secure jobs.
We need to think beyond local
We recognise that the South African listed equity market is no longer simply “local”. A substantial amount of earnings of JSE listed companies comes from offshore investors. South African asset owners should be thinking globally, which naturally extends to greater diversity, and exposure to different assets and asset classes.
Arguably, an asset manager based in any part of the world, needs sufficient capacity to truly understand global markets. Sufficient capacity means you can spend time strategising and developing skills in new asset classes, while also understanding new markets. If you aren’t bolstering skills, you end up with a limited asset allocation and this pattern can spill over into limiting an asset manager’s lifecycle. This is the reason why having the right support makes such a big difference.
Through our Manager Development Programme, we want to support managers through their entire business cycle. We commit to a journey with them from start-up phase to emerging status and on, into the mainstream. Our support goes beyond just allocating capital but extends into all facets of building and running a sustainable business.
To showcase the stories within our Manager Development Programme, we have created a series of videos, which depict the individual journeys, challenges and successes from some of the managers within our programme.
Find out more about the RisCura Manager Development Programme here.