Discovery’s asset manager set to shake things up in 2025

Cogence, an asset manager wholly owned by Discovery, is well-positioned to ride the waves of a highly volatile 2025 as it grows its fund offering and attracts financial advisers to its platform. 

Founded in August 2022, Cogence is a discretionary fund manager that aims to provide financial advisers with the tools to help their clients with best-of-breed advice.

This is done largely by marrying BlackRock’s investment and risk technology platform, Aladdin Wealth, with RisCura’s local investment expertise. 

The partnership Cogence has with BlackRock also extends to global asset research and allocation insights. 

Where available, individual clients’ unique health and behavioural data, collected by Vitality, can be factored into perfecting individual portfolios.

CEO Jonel Matthee-Ferreira outlined the company’s strong growth in 2024 and its expectations for 2025 in an interview with Daily Investor. 

In her first full year as CEO, Cogence has grown its assets under management to R23 billion and has steadily attracted financial advisers to its platform. 

“There was some legacy money that we took over, but I think it is important to see the business scale when you are a discretionary fund management business,” Matthee-Ferreira explained. 

“On the product side, we have made sure that our range of solutions is enough for what the market wants. So, last year, we launched an income fund of fund and our model portfolios.”

Cogence now has fund offerings across all different risk profiles and is looking to expand further into alternative investments, such as funds that have exposure to private equity and private markets. 

The company also spent significant resources and time in building out its technology stack to give financial advisers access to its reporting and investment tools. 

“We are getting great feedback from that. It is also beneficial to incorporate the behavioural side of investing with data from Vitality, which can be integrated into one report for advisers.” 

Matthee-Ferreira explained how this works with Cogence’s different business model, whereby it partners with advisers to build solutions for their clients rather than go directly to customers. 

In particular, Cogence is looking to target the sweet spot of financial advisers that have funds of R250 million to R500 million to partner with the company. 

“So that is more our focus than the traditional asset managers that focus on advisors and direct clients. Our target market is not direct lines, but rather advisers, and they take our solutions through clients,” Matthee-Ferreira explained. 

This approach is set to stand the company in good stead in 2025 as its partnership with BlackRock and unique fund offering are well-designed to handle increased volatility. 

BlackRock’s Aladdin Wealth platform not only enables Cogence to stress test portfolios but also gives it access to insights from the world’s largest asset manager. 

This has enabled Cogence to position its funds to benefit immensely from the rapid buildout of the infrastructure needed for artificial intelligence (AI) models. 

Instead of trying to pick winners among OpenAI, Google, and Anthropic, among others, Cogence was able to quickly focus on companies guaranteed to benefit from the buildout of AI infrastructure. 

This includes energy companies and construction businesses and even extends right through to miners and resource companies. 

Another way in which Cogence is geared up to potentially benefit from a volatile 2025 is through its blend of active and passive investing. 

Matthee-Ferreira explained that the company’s funds hover around the 50-50 mark in relation to active versus passive investing. 

This enables them to offer investors broad-based diversification to limit any potential downside while freeing up active portfolio managers to pick winners to provide the upside. 

However, this relationship has to be closely monitored and managed, with Matthee-Ferreira explaining that active managers have to add value to any passive fund. 

If they do not contribute something different, Cogence will gladly choose the passive option, which is cheaper for investors. 

Over the coming years, Cogence plans to continue to build its brand and attract financial advisers to its offerings and tools. 

However, it also plans to expand into alternative investments through funds specifically designed to expose clients to private markets, private equity, and private credit. 

These will be intended to be used as part of a portfolio of funds, whereby alternative investments can provide additional upside or protect investor returns during market downturns. 

Because these kinds of investments do not have daily liquidity, they will not be included in traditional funds offered by Cogence.