South African asset managers in ‘war for talent’ 

South African asset managers are in a war for talent. The industry is experiencing significant growth and a sharp increase in complexity, requiring more employees with greater skills which are in short supply. 

This is feedback from the 2023 Alexforbes Manager Watch Annual Survey, where the country’s largest asset managers were listed and investment trends outlined. 

The Alexforbes survey of retirement fund investment managers showcases the performance of institutional fund managers in South Africa.

It ranks the largest and best asset managers and gives other information, including their respective BBBEE ratings.

The Alexforbes Manager Watch has tracked the retirement fund investment management industry since the dawn of democracy in South Africa.

The survey provides a key reference point to all South African retirement funding industry stakeholders.

In a feature article, asset management expert at the Asset Management Research Institute, Muitheri Wahome, outlined why industry players are engaged in a war for talent. 

Wahome noted that 89% of asset managers participating in the survey were only founded after 1994, reflecting the strong growth the industry has experienced over the past few decades. 

While the industry has grown, increasing the need for skilled employees, it has become more complex and multi-layered with the advent of asset consultants, multi-managers, hedge funds, and discretionary fund managers. 

This has made it difficult for companies to attract, grow, and retain skilled staff. Emigration has only compounded this problem for the industry. 

It has proven increasingly challenging for educational institutions to keep up with this demand, and companies have also struggled to develop sufficient levels of new talent. 

One industry expert told Alexforbes, “Virtually every role is undersupplied except for entry-level equity analysts.” 

However, Wahome added that technology will continue to raise the productivity of existing employees and enable asset managers to reduce their headcount, potentially alleviating the talent shortage. 

Coronation CEO Anton Pillay
Coronation CEO Anton Pillay

In the company’s annual report released at the end of December, Coronation’s CEO Anton Pillay said it is currently engaged in a “talent war” with other financial services providers. 

Chairperson of Coronation, Alexandra Watson, echoed Pillay’s concerns. She raised concerns about a “skills exodus” from South Africa due to the country’s stagnant economy and better opportunities elsewhere. 

This echoed concerns from other financial service providers. 

Momentum Metropolitan warned that employing more people with the requisite skills is increasingly difficult, putting it at risk of failing to achieve transformation targets. 

“Sout Africa is facing an acute critical skills crisis, especially African, coloured and Indian skills, due to increased local and international competition and emigration,” the company said.

“We face the risk of skills shortages, particularly in critical skills such as actuarial, IT and technical talent. This has amplified in the evolving working environment.” 

“Talent retention, burnout and fatigue are all concerns, especially in specialist areas, and talent attraction remains challenging,” Momentum said. 

To attract and retain top talent, Coronation has implemented a unique ownership structure whereby employees own 29% of the group, and the rest is publicly traded. 

As incentives to stay at the company, Coronation gave 42% of its employees long-term incentives in the form of Coronation unit trusts and shares.

“In support of our long-term thinking and retention strategy, these recent allocations vest over 51 months,” it said in its integrated annual report.

“Generally, the company aims to defer a minimum of 40% of total incentives. This outcome very clearly aligns the interests of employees with both clients and shareholders.”

The unique ownership structure and incentives combine to ensure that employee turnover at Coronation sits below the industry average at 4.3%. 

The turnover is even lower at 2.5% for employees who receive long-term incentives.