Black Investment Platform

Beyond Incubation

The first stage in democratising the savings and retirement fund landscape following democracy was to grow the black asset manager universe in an effort to increase black skills and bring about balance to an unequal landscape. This led to the emergence of Black Asset Manager Incubation programmes first pioneered by 27four Investment Managers in 2007 that nurture start-up black managers, provide the necessary support and allow the managers to transition to compete against mainstream established managers.

Twenty one years following our democracy there are now in excess of 35 black asset managers that have emerged largely as a result of transformation initiatives driven by the large stand alone SOE and industry retirement funds. Whilst the industry has achieved many successes, a number of challenges continue to surface and plague successful transformation. These include but are not limited to:

  • Concentration of capital to the earlier entrants.
  • Too many managers managing a small amount of assets which prohibit sustainable growth.
  • Lack of product differentiation.
  • The overall responsibility of transformation lying in the hands of the large stand alone SOE and industry retirement funds leading to excessive competition within a limited asset pool.
  • Inability to access capital from sponsored Umbrella Funds and the retail market.
  • Poor coverage by consultants and advisors to retirement funds.

This dynamic has called for an evolvement of historic transformation programmes to that which promotes greater inclusivity and the successful integration of black asset managers within the broader industry, in so doing, overcoming the many challenges identified above. Therefore the next stage of transformation is one that allows managers to capture a client base outside of stand-alone funds, to become core components of industry offerings in both the institutional and retail market and build competitive and differentiated product lines.

Taking heed of the necessity to look beyond incubation and focus on the integration of black firms within the mainstream industry, 27four as leaders of transformation in South African asset management sought out a solution that achieves inclusivity. That solution being a distribution platform that houses South Africa’s top performing black asset manager products. Institutional and retail investors can now access black mangers’ flagship products through one single point of entry.

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