South African asset management industry hits record high

The local Collective Investment Schemes (CIS) industry increased assets under management to R3.57 trillion in the first quarter of 2024, hitting a new record high.

This was revealed by the Association for Savings and Investment South Africa (ASISA) in its quarterly update on the local asset management industry. 

Its data also shows that participating asset management companies achieved total net inflows of R103 billion over the 12 months to the end of March 2024.

Senior ASISA policy adviser Sunette Mulder pointed out that the bulk of the net inflows was contributed by existing investors who reinvested income declarations (dividends and interest) worth R115 billion. 

Without the reinvestments, asset managers would have actually reported net outflows of R12 billion for the period.

This illustrates that South Africans remain under pressure, with many refusing to increase their contributions to their investment funds or cancelling them altogether.

The disappointing performance of the JSE All Share Index over the 12 months to end the of March 2024 also negatively impacted investor confidence and thus investment contributions. 

“We find ourselves in an uncertain investment climate due to the upcoming elections. Throw in poor returns from the local market, and we have an environment not conducive to strong inflows of new money,” Mulder said.

The local asset management industry has come under severe pressure over the past decade as the South African economy continues to underperform, resulting in poor returns from the stock market and a lack of investor confidence. 

Head of investment consulting at Alexforbes, Janina Slawski, said the industry has proven resilient despite the lacklustre economic growth in South Africa over the past few years by offering new products. 

Slawski did note that many South African investors are shifting significant portions of their investments offshore into dollar holdings to protect their savings from rand depreciation. 

This presents a risk to the local asset managers who do not offer offshore portfolios as they will effectively lose assets under management from investors taking their money out of the country. 

South Africa’s largest asset managers

In the 2023 Manager Watch Annual Survey released earlier this year, Alexforbes revealed which asset managers are the largest in South Africa. 

Ninety One continued to dominate the rankings, followed by Stanlib, Coronation, and Allan Gray.

Formerly Investec Asset Management, Ninety One consolidated its position in 2023, growing its assets under management by 6%. 

Allan Gray showed strong growth, leapfrogging both Sanlam Investment Managers and Old Mutual Investment Group to take third place behind Stanlib. 

The survey from Alexforbes does not include the Public Investment Corporation as it is a government entity. It has around R2.9 trillion in assets under management, making it the largest asset manager in the country. 

It must also be noted that the survey focuses on assets under management for South African clients only, so it does not include assets managed on behalf of clients from other countries. 

The top 20 largest asset managers are listed in the table below.