Asset Manager Survey Listed Investments – October 2022
12 Dec, 2022

A Game changing programme – Interest free Empowerment Loan Funding of up to R6 million to black fund managers.

This is a game changing programme targeted at black fund managers in the asset management industry. The initiative driven by Motswedi, is making available interest free loans of up to R6 million to qualifying black fund managers – at the same time allowing companies to claim bonus BEE points and positively impact the growth of black businesses, a true win-win situation.

This programme is an industry first, was conceptualised by Motswedi and is funded from company Enterprise and Supplier Development (ESD) allocations and is allowing black fund managers the latitude to carefully consider their expansion plans as they attract new clients and grow. Motswedi Head of Investment Strategy Mark Davids says: “This programme has the potential to accelerate a number of black fund managers into the mainstream of the asset management industry within a short period of time”.

What is the funding used for?

Many asset allocators frequently use the excuse of “Lack-of-capacity” in black fund managers for not wanting to risk allocating asset to these managers – this programme solves this problem. Black fund managers can now carefully deployed loan funding into areas of their business which enhances their capacity – they can now afford a Bloomberg terminal, a pre-post trade compliance system or to employ a specialist business development person. All of which, in the eyes of many asset allocators, is needed by the black fund managers to position their businesses shoulder-to-shoulder with the established asset manager players.

Disciplined growth of black fund managers

Having overcome the high hurdles to start a fund management business, black fund managers are acutely aware of the asset and liability management they are required to demonstrate in managing their balance sheets to optimise the loan funding as they grow their businesses. Motswedi Head of Investment Strategy Mark Davids explained: “The businesses have to demonstrate a clear and systematic business plan along with prudent business management practises in finances, HR among others, in order to qualify for the loan funding.”

Who qualifies for funding?

BEE Legislation refers to Enterprise and Supplier Development (ESD) of Exempt Micro Enterprises (EME) and Qualifying Small Enterprises (QSE). The table below categorises the key characteristics of both EME and QSE entities.

8% to 16%

Organically grown black fund managers manage less than 8% of the available assets in the long-term savings and investment industry. This programme is a stepping stone for black fund managers to get to 16% of the asset management industry within a shorter period of time relative to the current trajectory.

Download a copy of the survey – click below…

ENDS

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