R4 trillion asset manager wants to take Johannesburg from zero to hero

A R4 trillion global asset-management firm with South African origins will provide financial backing for infrastructure projects to reverse the decay of Johannesburg, the continent’s financial capital.  

“The major city in the country needs to be turned around,” Ninety One CEO Hendrik du Toit said in an interview on Bloomberg Television.

“It has been appallingly managed”, and his firm is “making plans to help — not just us, but within our ecosystem.”

Africa’s largest economy will hold municipal elections on 4 November to determine which parties will run areas like Johannesburg.

Years of political instability and mismanagement have left it owing hundreds of millions of dollars to service providers and unable to provide consistent services. 

A coalition led by the African National Congress, the biggest political party, currently runs the city, but polls identify veteran opposition politician Helen Zille as the front-runner to become the next mayor.

While a News 24/SABI Strategy Group survey published on 4 October showed her favoured by 36% of voters — ahead of the 27% backing an ANC candidate — that’s below the 50% threshold required to govern outright.

“If that city doesn’t turn around, the retention of executive talent would be an issue because people don’t want to live in places where the water is just cut off and where the roads have too many potholes,” Du Toit said.

“I think it could be turned around relatively quickly, although it’ll be a huge job.”

A legacy of corruption and mismanagement under President Cyril Ramaphosa’s predecessor, Jacob Zuma, still dogs an economy that has expanded by less than 1% annually for more than a decade.

Companies have consequently been reluctant to invest and are “hoarding cash on their balance sheets,” according to Du Toit, who sees signs that corporate spending is starting to recover. 

The central bank’s most recent Quarterly Bulletin showed that private-sector fixed investment fell in the three months through June, even as corporate bank deposits grew. 

Initiatives such as a private-sector boom in renewable energy and a corporate partner modernising Pier 2 at the port of Durban can serve as models for involving “the best in the world” in other infrastructure projects. 

“The investment dollars will start following the results,” Du Toit said.

“There’s a lot of opportunity to deploy money, as long as we can do it at the right price, and we are going to move domestic dollars first, and then bring in international dollars once the proof points are there.”

Du Toit helped found Investec’s asset-management unit in 1991. The business eventually became Ninety One, which the lender spun off in 2020, making it an independently listed company.