Dynamic Dialogue – Contributors
As a recognised industry expert, I invite you to share your expertise and experience on the conversation unfolding in EBnet’s latest Dynamic Dialogue. Please submit your response to the topic below (200 words maximum) in the space provided. You’re also welcome to upload any files to support your views (being mindful of size).
I’ll share your thoughts with the EBnet community of service providers and decision makers on our website. You will receive a link to the article so you can follow the opinions of the other experts invited to comment and those subscribers who share their perspectives.
Feel free to reach out to me at burrowsn@ebnet.co.za or 082 339 2697 if you need any more context to this conversation.
Let’s get the industry talking more.
Topic: Umbrella funds – the unintended consequence no one is talking about
Not enough is being said about the unintended consequences of the current “push” towards umbrella funds. Let me be clear, I support a more professionalised and consolidated umbrella fund dominated environment in South Africa, but we are missing a few critical conversations that if not addressed could have a materially negative impact on members. Here’s one:
Just about all umbrella fund sponsors have their own “in-house” investment capability which controls the allocation of capital to asset managers (some of which are in-house). This does not bode well for the investment industry which is already highly concentrated and could become even more so. Boutique/new managers have a very limited chance of “breaking through” to create competition and become sustainable – this has a serious knock on impact on our publicly listed companies (i.e. the JSE) given the concentration of assets in our investment industry, capital will just keep being directed to large companies. Already our larger asset managers are limited in terms of which listed stocks they can buy without buying the whole company! Surely this will make matters worse?
What are your views?