Publications
Partners
Cape Town - There are quite a number of South African investment managers, who are competent and have proven that they can invest money offshore successfully.
This was the message sent out at the RECM Global Perspectives conference.
"There is no need for South African investors to travel all the way to London or New York to have their money managed offshore," Jan van Niekerk, CEO of RECM told Fin24.
"There are many different ways of doing the right thing and what you do must resonate with your investment DNA."
He said these days investors often ask whether the current global market situation is the 2007 crisis all over again.
Global markets are looking pricey
"There seems to be a persistent worry about something going wrong in the global market. Global markets are looking pricey at the overall level," said Van Niekerk.
"On a market level it looks similar to 2007, but that is where it stops. We still find compelling opportunities in specific stocks, although we don't find enough ideas to be fully invested in."
At the same time he pointed out that one should not underestimate human ingenuity.
"Markets will put incentives where it is supposed to go," he said.
During a panel discussion Walter Aylett of Aylett & Co. Fund Managers, said the stock market in SA is influenced by fund managers.
'I would not invest in SA'
"I would not invest in SA. I would take everything offshore," he said.
Kokkie Kooyman, global fund manager at SIM Global, said he agrees with Aylett, but added that the big question remains where to invest offshore.
"We are in a very difficult environment globally. China is hovering on what could be a sharp decline, Japan is like a bug waiting for a windshield and then there is also the Russian conflict," said Kooyman.
"But the markets are not cheap and one must be very specific about finding good companies with good management, because they can overcome macro economic factors. Globally there are enough such opportunities."
For Piet Viljoen, founder and chair of RECM investors cannot expect to get much yield in the current global situation "by merely sitting in a comfortable situation".
Sitting on cash or not
During the panel discussion the topic of cash was raised.
"If my worst crime is to have cash, then I am happy," said Aylett.
"Cash can still be deployed quickly, while it is not easy to be without cash."
Kooyman pointed out that over the long term markets have shown that cash underperforms.
"But you must also have the discipline to say if the market gets stupid I don't participate," he explained.
In the view of Louis Stassen of Coronation Fund Managers central bankers around the world have succeeded in making cash unattractive.
"Yet, there are times in the cycle when cash is a valuable asset," said Stassen.
For Viljoen cash is valuable "when the proverbial...hits the fan".
Choosing a fund manager
When choosing a fund manager it is a case of "know your horse and know your jockey", according to Aylett.
"Do your homework. People tend to spend more time in researching their next car than their fund manager," he said.
Viljoen added that it is a financial adviser's role to match what a fund manager can do with what a client needs and then hold the client's hand through the process.
"A fund manager's track record is there forever," said Stassen and Kooyman added that it takes time to differentiate between a fund manager with skill and one who was simply lucky.
The rest of Africa
During question time the panel was asked about investing in the rest of Africa.
"I would hesitate to invest elsewhere in Africa. Africa is not an easy place to do business," said Viljoen.
For Kooyman the problem with the rest of Africa is the risk of not being able to get your money out when you need to.
Stassen pointed out that investing on the JSE already provides exposure to the rest of Africa, due to companies with dual listings.
African Bank
The panel discussion then moved to the issue of African Bank, which was placed under curatorship by the SA Reserve Bank (Sarb)
"The way to deal with uncertainty in investing is about scaling your bets, because every now and then an African Bank comes up," said Viljoen.
"There will always be incidents, and sometimes you get it wrong, but be careful of becoming over-emotional."
For Stassen it becomes a case of seeing what the size and impact of a mistake was and to see if a fund manager did what he said he would do.
- Fin24
