South Africa: Can Large Asset Management Firms Channel Their Assets to Black and Emerging Firms?

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It's a non-starter, impossible, and goes against the objective of BEE that strives to not give handouts to emerging black firms but to empower them in a meaningful way, SA's private asset management industry has argued.

Is it possible for SA's private asset management conglomerates to directly allocate a portion of the retirement savings pool - worth R5.3-trillion - they manage to black-owned and managed firms in a Black Economic Empowerment (BEE) move?

It's a non-starter, impossible, and goes against the objective of BEE that strives to not give handouts to emerging black firms but to empower them in a meaningful way, SA's private asset management industry has argued.

As Khaya Gobodo, MD of Old Mutual Investment Group, which has more than R650-billion in assets under management (not just retirement assets), puts it: "What kind of country would we try to build when we say to competitors, 'We want you to stop competing and allocate half your hard-won assets to a competing firm.' It is not a real thing to ask."

"It's like going to Pick n Pay and asking the retailer to give up 30% of its stores to a new black-owned competitor. You can't ask that. People must...

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