Aug 12, 2020
The local asset management industry has experienced a growing number of emigrations and retirements recently and clients are understandably concerned about who will be managing their hard-earned savings in future. In my opinion, the war for talent will likely accelerate in the years ahead and thus the ability to attract and retain talented investment professionals will be a real competitive advantage. Ninety One is in a fortunate position, being a globally integrated business, which provides its staff with global career development opportunities without the need to emigrate, where that emigration is based purely on a lack of local career development opportunities. Clyde Rossouw, who co-heads our Quality capability, is resident in Cape Town yet manages a market-leading global equity fund, the Ninety One Global Franchise Fund. This is thanks to extensive and ongoing investment in technology to enable collaboration with his colleagues based in London, New York, Hong Kong and Singapore, and a culture which prizes and facilitates such teamwork, given the extraordinary results it delivers for our clients. Similarly, Charlie Dutton successfully manages Asian equities from Cape Town, having spent much of his life to date in London and Singapore. Their uncommon perspectives and experience are highly valued by their colleagues. A vastly enriched work environment is the result, including those just starting in their careers, who would otherwise wait for years for such exposure. Most importantly, the overall quality of investment debate and decision-making is improved, which ultimately benefits clients.
At Ninety One, we recognise that our people are our biggest asset, and we realise the importance of ensuring we continue to invest in their growth and development. Our purpose is to build a better firm for our people, our clients and our communities. As a leader, it is hence my responsibility to ensure that every member of my team is exposed to the development and mentorship opportunities which will not only lead to their personal growth as investors, but will also result in better outcomes for clients. I am encouraged by the depth and breadth of talent within the organisation and the successes of our internal development programmes, including those that see team members travel to global centres of finance for experience they would otherwise not be afforded. Personally, I spent nine months immersed in our team in London challenging my home bias, as I was evaluating South African shares against their global counterparts in real time and making decisions with a fresh set of eyes. Having returned to South Africa, my experience has proved invaluable as I continue to analyse both local and offshore-listed stocks, deploying and transferring my knowledge within my immediate team.
Recently, I have been encouraged by the increase in résumés hitting my inbox from talented investors looking to join our business, attracted by the globally integrated model at Ninety One. I am confident that we will continue to build a bench of talent for the future. This also means embracing diversity and inclusion; our aim is to ensure that people of different backgrounds, cultures, beliefs and perspectives feel welcome at Ninety One.
South Africa is small in the context of the global investment universe, representing less than 1% of respective global equity, property and bond indices. Today, more than 50% of earnings from businesses listed on the JSE are generated from outside SA. In the volatile world in which we find ourselves, it has become increasingly apparent that one needs to have a global perspective to navigate the choppy waters of investment markets. The reality is that global trends have a material influence on domestic markets, and one needs to have a more balanced perspective when evaluating the attractiveness of investment opportunities – both locally and abroad. It is no surprise that in an industry which has largely outsourced its global capabilities, investors who are only focusing on the South African market are feeling increasingly frustrated by the lack of local investment opportunities and inability to compete on a global scale. Fortunately, this does not include those who choose to work at and invest with Ninety One.
Being part of Ninety One has not only provided me with the opportunity to grow as an investor given my involvement in the global business, but it has also helped me deliver better outcomes for my South African clients. It has been my experience that an increasingly global mindset has allowed me to guard against any home biases and focus on the best investment opportunities, irrespective of their location. For both the Ninety One Cautious Managed and Ninety One Opportunity strategies, the best driver of growth in the portfolios remains high-quality global businesses with limited sensitivity to the global economic cycle. We favour those businesses that generate high and sustainable returns on invested capital which will continue to grow and compound over the long term. In a local market where growth opportunities are scarce, being able to deploy capital in leading global businesses which are trading at reasonable valuations, remains one of our highest conviction views.
As a business, I believe we are in a strong position to be able to provide long-term solutions and stability to our clients despite the increased levels of uncertainty we face as a country. The opportunity to continue to invest in talent does not only excite me but should provide clients with a sense of comfort when it comes to our biggest competitive edge, our people.
Ninety One, was born during times of great change. So, we understand change. We have learnt how to respond and adapt to it – to be inventive, stay determined and retain our focus. So, whatever is happening now and whatever changes come next, we will do everything possible to manage the outcomes for our clients, our people and for the world in which we live.