Fund managers need to be more innovative

Johannesburg - Black fund managers need to be more innovative to get more business from the investment company of South Africa’s largest trade union, the National Union of Metalworkers of SA (Numsa).

So says Khandani Msibi, the CEO of the Numsa Investment Company (NIC), which has funds under management totalling about R1 billion.

Msibi went on to say the company wanted black fund managers to differentiate themselves from the pack.

“We are already giving significant business to black fund managers. The problem is, they are not innovative. They do the same things that their white counterparts are doing,” he said.

“Black fund managers have not come up with innovations to advance the interests of our members.

“It is not true that they not supported.”

Msibi said the company was, in fact, planning to increase its support to black fund managers by giving them the authority to manage more of its finances, but they needed to come to the party.

In another development, Msibi said the investment company had set its sights on acquiring a share of the more than R300 billion being held by sectoral and company retirement funds on behalf of Numsa members across various sectors.

Last year, Numsa’s investment arm managed to get R500 million moved from a General Motors fund in Port Elizabeth to its own fund.

The union has more than 350 000 members, who each pay a subscription equal to 1% of their salary. Part of that goes to the NIC.

Msibi said the NIC entered into a joint venture with financial services firm 10X Investments last year to attract more funds.

Although he could not disclose which sectoral retirement fund was being targeted next, the venture would recruit clients using a different strategy, which would include offering a 40% cheaper fee than the industry standard and eliminating numerous middlemen.

“Numsa members have about R300 billion in different funds in different sectors. We want them to bring that to us,” he said.

10X specialises in living and retirement annuities, preservation funds and unit trusts. It has no single black African face in its management team, according to the company website.

The NIC has 360 Financial Services Group, Numsa Industrial Holdings and Numsa Property Group as its main subsidiaries. All three are wholly owned by the NIC.

The subsidiaries have stakes in businesses across various sectors, including commercial property, mining, insurance and listed securities.

According to the NIC website, 360 Financial Services Group owns at least six companies, including some in the funeral services sector and one in life insurance; majority stakes in an IT firm and a medical solutions firm; and a minority stake in a health services company.

Numsa Industrial Holdings owns 10% of Trevali Mining as well as 30% of popular disc jockey Sbu Leope’s MoFaya beverage company.

Numsa Property Group is a partner in the 30 000m² Vusa Mall, located in the Vaal area.

It also owns the 1 100-unit Parsonsvlei Housing Development in Port Elizabeth, which has been put on hold because of lack of water supply from the municipality, Msibi said.

He said NIC’s board of trustees decided on how to use profits to benefit members.

So far, some had been used to help retrenched workers and for bursaries and fund cooperatives. A housing project was also on the cards.

In addition, a pilot project had been proposed for the building of a clinic in the Eastern Cape, where most of the NIC’s members were concentrated, aimed at decreasing medical costs.

It was hoped that the project would get the go-ahead before July, said Msibi.