Welcome to our Asset Management Marketing Focus.

This week’s roundup brings you Africa-focused news and insight on topics ranging from private equity investment to fintech and AI.

Website Spotlight: Rezco Asset Management

South African asset manager Rezco Asset Management’s website is simple and striking, drawing investors in.

The homepage is well laid out with an interactive graph comparing Rezco’s performance since 2004 with industry benchmarks. Website visitors can move their mouse across the graph to get more information about the performance at any specific point in time.

Venturing further into the site, the fund pages are comprehensive without being overwhelming, with information presented in a digital format, rather than asking the investor to download a pdf factsheet.

The main Funds page gives a brief overview of each fund, with the ability to click through to view more detailed information on each fund as well as an interactive performance chart, similar to the one on the home page.

Within the detailed fund pages, all the information investors might need is organised under descriptive headings, like fees or risk, making it easy to find what you’re looking for. While all the information is presented digitally, investors can also download a pdf factsheet straight from this page should they wish to do so.

Fund in Focus: Goodwell IV

Goodwell Investments earlier this month launched Goodwell IV – a €20 million fund for investments in the inclusive economy in Sub-Saharan Africa.

According to the Goodwell Investments website, Goodwell IV will be invested in fast growing companies that offer products and services to the unserved and underserved. The fund will meet a growing demand for impact investments from private investors, family offices and foundations, and will fill the gap left by the successful closure of Goodwell III earlier this year.

“Goodwell’s extensive network in this sector and successful track record from predecessor funds makes it a trusted and insightful mentor within the impact investment space. The aim is to build a portfolio that will spread across impact sectors and regions in Sub-Saharan Africa,” the company said.

Half the fund will be invested in financial services, as the financial sector is the driving force behind a thriving local economy. The remainder will go to agriculture, health and sanitation, energy, and transport. There is a specific focus on technology-driven solutions because technology, especially on the vast African continent, enables businesses to reach more consumers faster and at a much lower cost.

Firm in Focus: Coronation Fund Managers

Cape Town based asset manager Coronation is turning 25 this year, and is celebrating its birthday by giving more South Africans the opportunity to become part of its investment community.

For the month of September, Coronation has dropped the minimum investment amount for the Coronation Market Plus Fund from R5 000 to R1. What’s more the asset manager will add 10% to every investment made into the fund this month, up to a maximum of R250.

The Coronation Market Plus Fund is ideal for longer-term investments, with a recommended investment time horizon of at least five years. The fund aims to maximise long-term investment growth, at lower levels of risk than a fund that is only invested in shares.

Industry Insights

Private Equity Investment in Southern Africa Doubles 

Private Equity Investment in South Africa increased by 102% in 2017 to a total of R31.3 billion the Southern African Venture Capital and Private Equity Association (SAVCA) 2018 Private Equity Industry Survey has shown. This is well above the total annual average of R14.7 billion over the previous 10 years.

According to the survey the total number of investments increased by 176 from 574 in 2016 to 750 in 2017. The overall average investment deal size increased to R41.7 million during 2017, from R27 million during 2016.

The retail sector saw the most investment during 2017, making up 25.9% of the total investment cost, followed by services (16.2%) and real estate (10.1%). 

AI, Automation and the Future of Work

AI is already disrupting many industries, but this is just the beginning. A recent report by McKinsey titled AI, Automation and the Future of Work states that even as AI and automation bring benefits to business and society, we will need to prepare for major disruptions to work.

McKinsey’s analysis of more than 2000 work activities across more than 800 occupations showed that certain categories of activities are more easily automatable than others. These include physical activities in highly predictable and structured environments, as well as data collection and data processing. These account for roughly half of the activities that people do across all sectors, which means that nearly all occupations will be affected by automation.

McKinsey has found that around 15% of the global workforce, or about 400 million workers, could be displaced by automation in the period 2016–2030. This is the midpoint scenario.

However, only about 5% of occupations could be fully automated by currently demonstrated technologies.

“Many more occupations have portions of their constituent activities that are automatable: we find that about 30% of the activities in 60% of all occupations could be automated. This means that most workers—from welders to mortgage brokers to CEOs—will work alongside rapidly evolving machines. The nature of these occupations will likely change as a result,” McKinsey states.

In the news

An easier way to compare umbrella fund fees

Comparing the costs of umbrella funds is set to become significantly easier from March 1 next year, when the new Association for Savings and Investment South Africa (Asisa) Retirement Savings Cost (RSC) Disclosure Standard comes into effect.

In an article on IOL Personal Finance, Michelle Acton, principal consultant at Old Mutual Corporate Consultants, says that this new disclosure standard will lead to a greater level of transparency across the industry, making it far easier for employers to select the most cost-effective umbrella retirement fund solution for their employees.

“Comparing costs of umbrella funds has always been challenging because the fees and charges of a particular scheme will be dependent on the number of members, salary profile and value of assets to be transferred,” Acton explained.

However, the new standard will ensure the cost of umbrella funds are displayed in the same manner, enabling employers to compare like with like.

Fintech and Africa’s GDP

The contribution of the fintech industry to Africa’s GDP is expected to increase by at least $40 billion by 2022, to reach a total contribution of at least $150 billion, Financial Sector Deepening Africa notes in an article published on BusinessTech.

The fintech industry currently employes about 3 million people, directly and indirectly, in Africa, with mobile phone companies leading the charge.