Investing

South Africa’s R1.4 trillion asset manager going for the top spot

Following the incorporation of Liberty and the strong growth of its investing platforms, Standard Bank now has over R1.4 trillion in assets under management (AUM). 

Asset management in South Africa has been dominated in recent years by Ninety One, which was created out of Investec Asset Management. 

It has over R3 trillion in assets under management, benefitting greatly from its business unit based in the United Kingdom.

However, even without the benefit of a substantial sum of assets being managed in pounds, Ninety One is still the largest – managing over R800 billion for just its South African clients. 

Asset management has boomed in the past decade, with AlexForbes revealing it has more than doubled from R3.3 trillion AUM in 2012 to over R7.7 trillion at the end of 2023. 

The 2023 Alexforbes Manager Watch Annual Survey outlined the country’s largest asset managers, focusing on just their South African businesses. 

It revealed that Ninety One cemented its leadership as South Africa’s top asset manager, achieving a 6% growth in its assets under management.

Allan Gray demonstrated impressive growth, overtaking Sanlam Investment Managers and Old Mutual Investment Group to claim third place, following Stanlib.

The Alexforbes survey omits the Public Investment Corporation since it is a government entity. With about R2.9 trillion in assets under management, it is the largest asset manager in the nation.

However, Standard Bank has emerged as an asset management juggernaut following the reincorporation of Liberty into its business. 

Importantly for its aspirations to dominate investing in South Africa, this includes Stanlib, the country’s largest fixed-income and property investor, and its relatively new index-tracking business, 1nvest. 

Combining these businesses with Standard Bank’s existing investing platforms, such as Melville Douglas, makes it the second-largest private asset manager in the country with R1.4 trillion in AUM. 

The table below shows South Africa’s top 20 asset managers ranked by their AUM, with Standard Bank-owned Stanlib in second place. 

It must also be noted that this is for AUM from South African clients only, so it does not include assets managed on behalf of clients from other countries. 

Standard Bank aims to leverage Liberty to become the largest asset manager in Africa and cross-sell its insurance products on the continent. 

Duncan Wattam, head of investment solutions at Standard Bank South Africa, said this is part of the bank’s strategy to become a full-service financial institution. 

Since Standard Bank’s acquisition of Liberty’s minority shareholders, the bank has garnered over R5.7 billion in distributions, largely due to capital optimisation efforts.

In February 2022, Standard Bank, Africa’s largest bank by assets, bought out Liberty’s minority shareholders to streamline its operations and establish itself as a diversified financial services provider.

Liberty achieved R3 billion in new business value in 2023, reflecting a 13% growth, with life and short-term insurance increasing by 8%.

More importantly, it incorporated Stanlib into Standard Bank’s asset management operations. Wattam said this is vital as asset managers can no longer stand alone as businesses due to the rise of low-cost index funds. 

This forces them to find new distribution channels and, ultimately, be profitable as part of a full-service financial institution. 

Wattam also explained that Standard Bank wants to align its business with its global peers, which generate more than 20% of its earnings from asset and wealth management. 

Asset management is very attractive for banks. It enables them to reduce their reliance on net interest income from loans and increases their return on equity, making their businesses more capital efficient. 

Wattam emphasised that Standard Bank is making substantial investments in its investment platforms to compete with other asset managers and better integrate its products. The bank aims to launch its new investment platform within the next 18 months.

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